Gross state product, 1991-92.

Beemiller, Richard M.

This article presents new current- and constant-dollar estimates of gross state product (GSP) for 1992 and revised estimates for 1991 (see tables 1 and 2, which follow the text).(1) These estimates update and extend those published in the August 1994 Survey of Current Business.(2)

The new and revised GSP estimates are consistent with the estimates of gross product by industry for the Nation for 1991-92 that were published in the October 1994 Survey.(3) The revisions to the 1991 GSP estimates largely resulted from the incorporation of the national estimates; they also reflect the incorporation of improved estimates of proprietors' income (see appendix A).(4)

GSP is the market value of the goods and services produced by the labor and property located in a State. GSP for a State is measured as the sum of gross state product originating (GSPO) in all industries in the State. As such, it is the State counterpart of the Nation's gross domestic product (GDP) measured as the sum of gross product originating (GPO) in all industries.(5) An industry's GSPO, referred to as its "value added," is equivalent to its gross output (sales or receipts and other operating income, plus inventory change) minus its intermediate inputs (consumption of goods and services purchased from other industries or imported).

BEA prepares GSPO estimates for 61 industries. For each industry, GSPO is composed of four components: Compensation of employees, proprietors' income, capital charges, and indirect business taxes. Appendix B shows how these components correspond to the components of State earnings and of GDP.(6)

The remainder of this article summarizes the growth rates in real GSP for selected States in 1991-92 and the share of total GSP accounted for by selected States in 1992.

GSP growth rates

The growth rate of real GSP for the United States can be compared with the growth rate of real GSP for a State to gauge the relative economic performance of the State. In 1992, real GSP for the United States increased 2.5 percent (table A). GSPO in goods-producing industries (agriculture, mining, construction, and manufacturing) increased 2.2 percent, GSPO in private service-type industries (trade, the finance, insurance, and real estate group, the transportation and public utilities group, and services) increased 2.9 percent, and GSPO in government increased 0.4 percent.

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In the following discussion, an increase in an industry's GSPO in a State is "above average" ("below average") if it is more than (less than) the increase in total GSP in the State.

Fastest growing States. - In 10 States, increases in real GSP were more than 2.0 percentage points above the U.S. average of 2.5 percent (chart 1). In most of these States, GSPO had above-average increases in agriculture, in construction, in durable goods manufacturing, and in both wholesale and retail trade. Within durable goods manufacturing, increases were above average in industrial machinery in most of the 10 States; in fabricated metal products in Kentucky, Tennessee, and North Carolina; in motor vehicles and equipment in the preceding three States and in Wisconsin; in instruments and related products in Wisconsin and South Dakota; in electronic and other electric equipment in Idaho and Tennessee; and in furniture and fixtures in North Carolina. In addition, in mining, increases in GSPO were above average in metal mining in South Dakota and in coal mining in Kentucky.

Slowest growing States. - In seven States, increases in real GSP were at least 1.0 percentage point below the U.S. average of 2.5 percent; in three States - California, Louisiana, and Alaska - real GSP declined. In California, Massachusetts, Maine, Rhode Island, Maryland, and Connecticut, GSPO declined or had below-average increases in durable goods manufacturing, particularly in defense-related industries, such as electronic and other electric equipment and transportation equipment excluding motor vehicles. In addition, in most of these States, GSPO declined or had below-average increases in construction, in nondurable goods manufacturing, and in government.

In Oklahoma, Louisiana, and Alaska, GSPO declined in mining, particularly in oil and gas extraction. In addition, in these States, GSPO declined or had below-average increases in durable goods manufacturing and in the finance, insurance, and real estate group. In Wyoming, GSPO declined in oil and gas extraction, in nondurable goods manufacturing, in the transportation and public utilities group, and in the finance, insurance, and real estate group.

GSP shares

Current-dollar GSP shares are used to measure the relative size of the various State economies at a given point in time. Chart 2 shows each State's current-dollar GSP as a share of the U.S. total in 1992. The 14 States with the largest GSP accounted for two-thirds of the U.S. total. The District of Columbia and the 20 States with the smallest GSP accounted for only one-tenth of the U.S. total.

Appendixes A and B and tables 1 and 2 follow. 2

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(1) The constant-dollar estimates are derived by deflating new and revised current-dollar estimates for 6i industries with implicit price deflators computed from the estimates of national gross product originating. For a discussion of issues related to the measurement of constant-dollar gross product by industry for the Nation, see Robert P. Parker, "Gross Product by Industry, 1977-90," Survey 73 (May 1993): 36-37. Detailed estimates of GSP in current and constant dollars for 1977-92 for 61 industries are available electronically and on diskette (see the box "Data Availability" on page 50). (2.) Richard M. Beemiller and Ann E. Dunbar, "Gross State Product, 1977-91," Survey 74 (August 1994): 80-97. (3.) See Robert E. Yuskavage, "Gross Product by Industry, 1991-92," Survey 74 (October 1994): 30-34. (4.) Improved estimates of proprietors' income have also been incorporated into the GSP estimates for 1982-90; for those years, the average revision to GSP amounted to only - 0.01 percent. (5.) For differences between GDP and total GSP, see appendix B. (6.) For earnings by industry and earnings by component for States, regions, and the United States, see "State Personal Income, Revised Estimates for 1991-93," Survey 74 (August 1994): 64-79.