US Services Sector Finally Makes the Cut
New Census Bureau economic indicator is the first in 40 years
WASHINGTON, DC - 09/14/04 - The first data from a new economic indicator series on the economic impact of the nation's $2 trillion service industry has been released by the US Census Bureau (USCB) in a move aimed at "helping close a critical measurement gap" in the US economy.
Until now, no economic indicator existed for the services sector "despite its importance and increasing share of total economic activity," said Frederick Knickerbocker, the Census Bureau's Associate Director for Economic Programs.
According to the most recent figures,?excluding the retail and wholesale trades, service industries currently account for nearly 55% of the nation's $11 trillion in annual economic activity.
The new Quarterly Services Survey (QSS) survey, he said, "will initially provide new data for three sectors that account for about 15 percent of the country's total GDP [gross domestic product]."
Service industry output indicators previously were available only from the five-year economic census and on an annual basis from the Service Annual Survey (SAS).
The new economic indicator is the first for the Bureau in more than 40 years bringing to 13 the number the agency produces.
The first estimates from the new QSS were made public yesterday morning with initial data for the fourth quarter of calendar year 2003 and the first and second quarters of 2004.
The QSS, the USCB said, will produce statistics on total operating revenue and percentage change using the North American Industry Classification System.
The first survey data includes growth areas and industries sensitive to changes in the business cycle such as the information sector, ranging from newspapers to movies and data processing, that saw revenue grow 4.4% in the three months that ended June 30, compared to the previous three months and professional, scientific, and technical services, which had revenue growth of 6.3% in the quarter ending in June, after a drop of 0.3% in the year's first quarter.
In addition, it covers administrative, support, and waste-management services, which posted revenue growth of 5.6% after growing 1.2% in the first quarter of this year.
Those three categories of services alone combine to account for a full 15% of total US GDP, Census said, adding the survey will be enhanced next year to include hospitals and nursing, and residential care facilities.
Prior to implementation of the Quarterly Services Survey, BEA had relied on its Quinquennial Economic Census, the USCB's Annual Services Survey, and a complicated array of monthly and quarterly public and private indicators that were used to estimate quarterly estimates of services activity, as well as estimates for some of the country's largest and most volatile service industries.
Data will be released 75 days after the end of each calendar quarter. The next release is scheduled for December 14 and will cover the statistics for the third quarter of 2004.
The new'survey "is an extremely important step in a much-needed, ongoing effort to get a clearer picture of the role services play in the US economy," said Bob Vastine, president of the Washington, DC-based Coalition of Service Industries, in reaction to the new survey.
"We need to know much more about how services are contributing to our economic life, and the [new QSS] will help do that."
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