Gross state product, 1977-91.

Beemiller, Richard M. ; Dunbar, Ann E.

THIS ARTICLE presents new current-dollar estimates of gross state product (GSP) for 1991 and revised estimates for 1977--90 (see table 1, which follows the text). The estimates incorporate new source data and methodology. These estimates update and extend those published in the December 1993 SURVEY OF CURRENT BUSINESS.(1) This article also presents constantdollar estimates of GSP by industry for selected years in 1977--91 (see table 2).(2) The current- and constant-dollar GSP estimates are consistent with the estimates of gross product by industry for the Nation that were published in the November 1993 SURVEY.(3)

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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. 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 (appendix A). For each industry, GSPO is composed of four components: (1) Compensation of employees (hereafter termed "compensation"); (2) proprietors' income with inventory valuation adjustment (IVA) and capital consumption allowances ("proprietors' income"); (3) indirect business tax and nontax liability ("IBT"); and (4) other, mainly capital-related, charges ("capital charges"). The compensation and proprietors' income components are mostly derived from BEA's estimates of earnings by place of work, an aggregate in the State personal income series. (Appendix B shows in detail how GSP corresponds to earnings and GDP.) The IBT component reflects the liabilities charged to business expense, most of which are sales and property taxes levied by State and local governments.(4) The capital charges component comprises corporate profits with IVA, corporate capital consumption allowances, business transfer payments, net interest, rental income of persons, and subsidies less current surplus of government enterprises.

The first section of this article discusses growth rates in real GSP for selected State economies in 1987--91 and the relative size of the State economies in 1991. The second section summarizes the major sources of revisions to the current-dollar estimates for 1977--90.

Changes in GSP, 1987--91

GSP growth rates

Comparisons of constant-dollar GSP growth rates with the U.S. average growth rate can be used to gauge the performance over time of States and industries. From 1987 to 1991, real GSP for the United States increased at an annual rate of 1.8 percent (table A). GSPO in goods-producing industries (agriculture, mining, construction, and manufacturing) increased 0.6 percent, GSPO in private service-type industries (trade, the finance-insurance-real estate group, the transportation-public utilities group, and services) increased 2.3 percent, and GSPO in government increased 1.8 percent.(5)

[TABULAR DATA OMITTED] Fastest growing States.--In 10 States, increases in total real GSP were at least 1.0 percentage point above the U.S. average of 1.8 percent (chart 1). Most of these States had above-average increases in GSPO in all major goods-producing industries except nondurables manufacturing. According to the estimates in 61-industry detail, increases in durables manufacturing GSPO were above average in electronic and other electric equipment in Idaho, New Mexico, and Utah; in industrial machinery and equipment in Idaho, Nebraska, and South Carolina; in transportation equipment in Washington and Utah; and in both primary and fabricated metals in Utah. In addition, increases in mining GSPO were above average in metal mining in Nevada and in oil and gas extraction in New Mexico and Utah.

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Most of the 10 States had above-average increases in GSPO in all major private service-type industries and in government. The above-average increases were mainly in communications, in depository institutions, in real estate, in business services, and in State and local government. In addition, increases in GSPO were above average in hotels and lodging places in Nevada and Hawaii.

Slowest growing States.--In seven States, increases in total real GSP were at least 1.0 percentage point below the U.S. average (chart 1). Most of these States had declines or below-average increases in GSPO in agriculture, in nondurables manufacturing, in construction, and in mining. In addition, Missouri, Michigan, and Rhode Island had declines or below-average increases in GSPO in durables manufacturing; the weaknesses were mainly in motor vehicles and equipment in Missouri and Michigan, in other transportation equipment and in electronic and other electric equipment in Missouri and Rhode Island, and in both primary and fabricated metals in Rhode Island and Michigan.

Most of the seven States had declines or belowaverage increases in GSPO in all major private service-type industries and in government. The weaknesses were mainly in communications, in electric, gas, and sanitary services, in depository institutions, in real estate, in business services, and in State and local government.

GSP shares

Current-dollar GSP shares can be 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 1991. Fourteen States that have relatively large GSP--California, Texas, three Great Lakes States, eight East Coast States, and Washington--accounted for two-thirds of the U.S. total. Twenty States that have relatively small GSP--mainly States in the West and in New England--accounted for only 10 percent of the U.S. total.

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Sources of the Revisions

The revisions to the previously published estimates of current-dollar GSP for 1977--90 are shown in table B. The revisions largely reflect five sources. For 1990, State estimates of GSPO for all industries and components now use as "control totals" the revised estimates of GPO for the Nation that were released in November 1993.(6) For 1983--90, the estimates of government GSPO reflect new source data that are used to exclude the wages and salaries of Federal civilian and military personnel stationed abroad; government GPO for the Nation includes such wages and salaries. Summing these new State estimates of government GSPO resulted in revisions to total GSP for the Nation; the new estimates accounted for all of the revisions to total GSP for the Nation for 1983--89 and for the rest of the national revision for 1990. For 1984--90, the State estimates of nonfarm proprietors' income are based on new source data.(7) For 1977--79 and 1981--89, the estimates of GSPO for the nonfarm housing component of real estate were extrapolated back from 1980 and interpolated between 1980 and 1990 using State nonfarm personal income; previously, State personal income--which is affected by fluctuations in farm income--was used for the extrapolation and interpolation.(8) For 1977--90, the estimates of GSPO for "other" real estate reflect the incorporation of improved estimates of the rental income of nonoperator landlords.

The sources of revision that contributed the most to the revisions to the State estimates varied. For 1977--83, the major contributor was the revisions to the real estate estimates; for 1984--89, the revisions to the proprietors' income estimates; and for 1990, the revisions to both the proprietors' income estimates and the national GPO estimates.

Appendixes A and B and tables 1 and 2 follow.

Data Availability

Detailed estimates of GSP in current and constant dollars for 1977--91 for 61 industries for States, BEA regions, and the United States are available on a 3 1/2-inch, high-density diskette for $20. (Other types of diskettes are available on request.) The diskette includes either a DOS or a Windows program so that selected records from the data files can be imported into computer spreadsheets.

When ordering, please specify the BEA Accession Number--61--94--40--421 for GSP with DOS or 61--94--40--423 for GSP with Windows. Send your order, along with a check or money order payable to "Bureau of Economic Analysis," to Public Information Office, Order Desk, BE-53, Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230. For further information or to order using MasterCard or VISA, call (202) 606--3700.

Appendix A.--Industries for Which GSPO Estimates Are Available

 1987
 SIC
 code
Agriculture, forestry, and fisheries A
 Farms 01-02
 Agricultural services, forestry, and fisheries 07-09
Mining B
 Metal mining 10
 Coal mining 12
 Oil and gas extraction 13
 Nonmetallic minerals, except fuels 14
Construction C
Manufacturing D
 Durable goods
 Lumber and wood products 24
 Furniture and fixtures 25
 Stone, clay, and glass products 32
 Primary metal industries 33
 Fabricated metal products 34
 Industrial machinery and equipment 35
 Electronic and other electric equipment 36
 Motor vehicles and equipment 371
 Other transportation equipment 372-79
 Instruments and related products 38
 Miscellaneous manufacturing industries 39
 Nondurable goods
 Food and kindred products 20
 Tobacco manufactures 21
 Textile mill products 22
 Apparel and other textile products 23
 Paper and allied products 26
 Printing and publishing 27
 Chemicals and allied products 28
 Petroleum and coal products 29
 Rubber and miscellaneous plastics products 30
 Leather and leather products 31
Transportation and public utilities E
 Railroad transportation 40
 Local and interuban passenger transit 41
 Trucking and warehousing 42
 Water transportation 44
 Transportation by air 45
 Pipelines, except natural gas 46
 Transportation services 47
 Communications 48
 Electric, gas, and sanitary services 49
Wholesale trade F
Retail trade G
Finance, insurance, and real estate H
 Depository institutions 60
 Nondepository institutions 61
 Holding offices and investment services 62,67
 Insurance carriers 63
 Insurance agents, brokers, and service 64
 Real estate 65
Services I
 Hotels and other lodging places 70
 Personal services 72
 Business services 73
 Auto repair, services, and parking 75
 Miscellaneous repair services 76
 Motion pictures 78
 Amusement and recreation services 79
 Health services 80
 Legal services 81
 Educational services 82
 Social services and membership organizations 83,86
 Other services 84,87,89
 Private households 88
Government J
 Federal civilian government 91-96
 Federal military government 97
 State and local government 91-96

GSPO Gross state product originating

SIC Standard Industrial Classification

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(1.)Richard M. Beemiller and Ann E. Dunbar, "Gross State Product, 1977--90," SURVEY 73 (December 1993): 28--49.

(2.)The constant-dollar estimates are derived by deflating new and revised current-dollar estimates for 61 industries with implicit price deflators computed from the estimates of national gross product originating. Detailed estimates of GSP in current and constant dollars for 1977--91 for 61 industries are available on diskette. (See the box "Data Availability" on page 85.)

(3.)See tables 6 and 8 in Robert E. Yuskavage, "Gross Product by Industry, 1988--91," SURVEY 73 (November 1993): 38,40.

(4.)These taxes include property taxes on owner-occupied housing because owner-occupied housing is treated as a business in the national income and product accounts.

(5.)In this article, the discussion of constant-dollar growth rates is limited to 1987--91, and the changes in total real GSP and in GSPO in all industries are calculated using fixed-1987-weighted measures. Because of substantial changes in the relative price structure in manufacturing--changes that were largely traceable to the rapidly declining prices of computers and peripheral equipment--the fixed-weighted measure with 1987 price weights is appropriate for only a fairly short period of years around 1987. See Robert P. Parker, "Gross Product by Industry, 1977--90," SURVEY 73 (May 1993): 36--37.

(6.)When the State estimates are summed, the initial total of the State estimates for an industry may differ from the national total for that industry; in such cases, the difference is allocated to States so that the State total is "controlled," that is, conforms to the national total.

(7.)See "Local Area Personal Income: Estimates for 1990--92 and Revisions to the Estimates for 1981--91," SURVEY 74 (April 1994): 127--50.

(8.)See "Gross State Product, 1977--90."