Once a year, the Bureau of Economic Analysis (BEA) reports on sector rates of return for domestic nonfinancial corporations, for nonfinancial industries, and for 14 major nonfinancial industry sectors, including mining, utilities, construction, manufacturing, wholesale trade, and retail trade. These broad measures of profitability, based on returns on produced assets, may be useful to economists and policymakers. Industry sector and corporate business rates of return are available through 2017; these rates of return reflect revised statistics from both the 2018 comprehensive update of the National Income and Product Accounts (NIPAs) and the 2018 comprehensive update of the Industry Economic Accounts (IEAs). (1) Various Tobin's Q ratios, which compare the financial market value of assets with the replacement-cost value of produced assets, are also presented in this article.

The after-tax profitability of domestic nonfinancial corporations increased in 2017 following a decrease in 2016, according to updated statistics from BEA. The rate of return--a similar but broader measure of profitability for nonfinancial industries, which includes proprietors' income--edged up slightly, growing for the first time since 2013.

The rates of return presented in this article are calculated as the ratio of the net operating surplus to the net stock of produced assets. (2) The net operating surplus reflects the return to capital and is presented in table A. Produced assets are presented in table B. For nonfinancial corporations, the net operating surplus reflects statistics from the NIPAs and is defined as the sum of corporate profits from current production, net interest payments, and net business current transfer payments. (3) The net operating surplus for nonfinancial industries reflects statistics from the IEAs and is a broader concept that includes proprietors' income. For both nonfinancial corporations and nonfinancial industries, the statistics on net stock of produced assets are from BEA's fixed assets accounts. To calculate the Q ratios, additional statistics on financial market values are drawn from the Federal Reserve Board's financial accounts of the United States.

Corporate Returns

Nonfinancial corporate rates of return increased on an after-tax basis and decreased on a before-tax basis in 2017. The after-tax rate of return was 7.4 percent in 2017, an increase of 0.1 percentage point from 2016 (chart 1 and table C). The before-tax rate of return was 8.7 percent in 2017, a decrease of 0.1 percentage point. Since 1970, before-tax rates of return have ranged from 6.9 percent in both 1982 and 2001 to 10.0 percent in 2006. In the 1960s, average rates of return were higher, peaking at 13.6 percent in 1965 and 1966. Net operating surplus as a share of net value added increased on an after-tax basis and decreased on a before-tax basis (table D) in 2017.

Other measures of profitability--such as BEA's measure of corporate profits from current production--increased in 2017. The measures presented in this article exclude the volatile financial sector and compare returns of nonfinancial corporations with their assets rather than with gross domestic product.

Industry Returns

Rates of return can also be calculated for industry sectors using statistics from the IEAs, which provide annual statistics for 71 industries that together account for all U.S. economic activity. Similar to the method used to calculate the rates for nonfinancial corporations, the rates of return for industry sectors are calculated as the net operating surplus divided by the net stock of produced assets. For nonfinancial industries, net operating surplus as a share of net value added is calculated as net operating surplus divided by net value added. The balance for each published sector represents the share of net value added attributable to compensation of employees and taxes on production and imports less subsidies.

Similar to the net operating surplus of nonfinancial corporations, the net operating surplus of nonfinancial industries reflects corporate profits from current production, net business transfer payments, and net interest payments. However, as noted, it also reflects proprietors' income, which includes the income of sole proprietorships and partnerships. For this article, the housing component of the real estate sector, which includes owner-occupied housing, is excluded from the nonfinancial industry statistics to allow for a better comparison with the nonfinancial corporate returns data, which do not reflect home ownership.

Much of the difference between the sum of the nonfinancial industries rates of return and the corresponding corporate rates of return can be attributed to the inclusion of proprietors' income in the industry net operating surplus. However, several statistical differences between the IEAs and the NIPAs also affect the estimates. Notably, all IEA statistics are presented on an establishment basis, whereas the NIPA measure of corporate nonfinancial net operating surplus is presented on a company basis. As a result, the nonfinancial industry measures reflect adjustments that (1) exclude the financial services-producing establishments of primarily nonfinancial corporations and (2) include the nonfinancial services-producing establishments of primarily financial corporations. In addition, the IEA net operating statistics also include a share of the NIPA statistical discrepancy. Despite the differences between the IEA nonfinancial industries aggregate rate of return and the NIPA nonfinancial corporate rate of return, the annual patterns of change of each are similar (chart 2).

The overall rate of return for nonfinancial industries in 2017 was 12.6 percent, increasing slightly from the 2016 rate (table C), which was the lowest level since 2009. Net operating surplus as a share of net value added increased 0.4 percentage point after 3 consecutive years of decline (table D).

Specific Industry Groups

This article presents a disaggregation of the rates of return for several industry groups--for example, manufacturing, transportation and warehousing, information, and professional and business services, among others (table C).

The statistics show the majority of the industry groups, 9 of 14 groups, had lower rates of return in 2017; two groups remained at the same level; and three had higher rates of return. The largest decreases were in real estate and rental and leasing, construction, and wholesale trade. (4) The remaining decreases in the rates of return, however, were relatively small, 0.3 percentage point or less.

For other industry groups, rates of return increased in 2017. For the mining sector, the rate of return increased 2.3 percentage points. Returns for nondurable-goods manufacturing increased 0.7 percentage point in 2017, while returns for professional services increased 0.3 percentage point. Highlights include the following (chart 3):

* The mining industry, which includes oil and gas extraction, has had a negative net operating surplus and a negative rate of return for 3 consecutive years. The rate of return in 2017 (-0.4 percent) is an improvement over 2016 (-2.7 percent) and 2015 (-2.1 percent).

* Rates of return for agriculture, forestry, fishing, and hunting declined for the fourth consecutive year. They are at their lowest level since 1998, when this series started.

* Returns to durable-goods manufacturing, which rebounded sharply after the last business cycle, declined slightly. (5) Rates of return more than doubled from a trough of 5.0 percent in 2009 to 10.2 percent in 2015, declining 0.4 percentage point in 2016 and less than 0.1 percentage point in 2017.

* Returns to nondurable-goods manufacturing, which includes petroleum refineries, have remained elevated and less volatile than returns to durable-goods manufacturing. The nondurable-goods rate of return decreased sharply in 2016, by 2.5 percentage points, and recovered 0.7 percentage point in 2017, to a level of 15.8 percent.

* Returns to retail trade are consistent, ranging from 7.1 percent to 7.7 percent since 2009.

* Returns to wholesale trade were lower in 2017, the second year of decline after 5 years of increased rates of return.

Q Ratios

Tobin's Q or simply "Q" is the ratio of financial-market valuation of corporate assets to the current-cost value of the assets. A Q ratio above 1 indicates that financial markets value corporate assets above their replacement cost; as a Q ratio rises above 1, companies may be more inclined to make direct investments in plant and equipment. A value of Q below 1 indicates that the financial markets value corporate assets below the replacement cost; as Q falls below 1, companies may be more inclined to buy other companies for their capacity rather than make direct investments.

The three Q-type ratios for domestic nonfinancial corporations presented here are defined as follows:

* Q1 is calculated as the market value of outstanding equity divided by the net stock of produced assets.

* Q2 adds the book value of outstanding corporate bonds to the numerator used in Q1. The inclusion of bonds makes Q2 a more complete measure of invested capital, but including them at historical cost is clearly inconsistent with the underlying rationale for Q which is to provide a comparison of market valuation with replacement cost.

* Q3 adds an estimate of the market value of outstanding corporate bonds and net liquid assets to the numerator used in Q1. (6)

All three Q ratios increased in 2016 and 2017 (chart 4 and table E) and remain above their decade lows reached in 2008, when they fell below 1, partly reflecting recession-related stock market declines.

By Sarah Osborne and Bonnie A. Retus

(1.) See Pamela A. Kelly, Stephanie H. McCulla, and David B. Wasshausen, "Improved Estimates of the National Income and Product Accounts: Results of the 2018 Comprehensive Update," Survey of Current Business 98 (September 2018) and Thomas F. Howells III, Edward T. Morgan, and Casey W. Ross, "Improved Estimates of the Industry Economic Accounts: Results of the 2018 Comprehensive Update," Survey 98 (December 2018).

(2.) Produced assets refer to the net stock of capital plus inventories valued at current (replacement) cost.

(3.) Corporate profits and net interest are based on tabulations of "company" data rather than "establishment" data. As a result, net operating surplus of nonfinancial corporations includes the income earned by the corporation's financial services-producing establishments, and it excludes income earned by the nonfinancial establishments of financial corporations.

(4). Measuring rates of return for the construction sector presents unique challenges. For example, the classification of produced assets is based on the owning industry rather than on the using industry. It is highly likely that the construction sector leases a significant amount of capital that is not reflected in their produced assets, which may overstate the sector's rates of return.

(5). The National Bureau of Economic Research (NBER) Business Cycle Dating Committee has determined the peak to trough of the last three business cycles: December 2007-June 2009, March 2001-November 2001, and July 1990-March 1991. The NBER business cycle reference dates are available on NBER's website.

(6). The market value of bonds outstanding is approximated by a procedure developed by James Tobin and Dan Sommers. In brief, the process begins with published book values of bonds outstanding and the assumption that a bond matures in 10 years and carries a coupon rate equal to the Baa rate that prevailed in the year the bond was issued. Net liquid assets are estimated as financial assets less liabilities other than municipal securities, corporate bonds, and mortgages. The data are from the Board of Governors of the Federal Reserve System, Flow of Funds Accounts of the United States, statistical release Z.1 and Moody's Seasoned Baa Corporate Bond Yield [BAA], retrieved from FRED, Federal Reserve Bank of St. Louis.

Table A. Net Operating Surplus of Domestic Nonfinancial Corporations
and Nonfinancial Industries, 1998-2017--Continues
[Billions of dollars]

                           1998      1999      2000      2001      2002

Nonfinancial               742.5     756.1     728.0     660.7     728.8
corporations
Total nonfinancial       1,375.6   1,417.3   1,422.5   1,394.2   1,512.8
industries
Agriculture,                52.9      51.0      57.3      57.4      43.0
forestry, fishing, and
hunting
Mining                      -9.6      -4.8      16.5      20.8       7.0
Utilities                   46.8      57.6      51.9      55.1      41.1
Construction               103.7     113.2     125.0     131.4     135.6
Manufacturing              318.6     325.6     320.4     268.2     292.4
  Durable-goods            139.0     124.9     123.5      56.9      83.8
  manufacturing
  Nondurable-goods         179.6     200.6     196.9     211.3     208.6
  manufacturing
Wholesale trade            107.9     108.3     115.2     105.8     104.7
Retail trade               119.5     116.8     113.7     116.0     121.4
Transportation and          32.7      28.3      29.0      30.6      24.5
warehousing
Information                111.7     118.8      60.1      73.0     134.3
Real estate and            148.4     131.2     154.4     159.2     183.1
rental and leasing (1)
Professional and           162.8     174.4     162.3     182.0     211.6
business services (2)
Educational                 53.5      58.1      62.3      70.7      72.1
services, health
care, and social
assistance
Arts, entertainment,        55.7      64.2      75.2      65.6      77.7
recreation,
accommodation,
and food services
Other services,             70.9      74.7      79.3      58.4      64.5
except government

                           2003      2004      2005      2006      2007

Nonfinancial               822.3     980.0   1,144.4   1,281.4   1,237.4
corporations
Total nonfinancial       1,717.5   1,959.3   2,106.0   2,256.0   2,295.1
industries
Agriculture,                63.4      84.3      77.5      61.0      70.7
forestry, fishing, and
hunting
Mining                      26.6      40.0      70.3      83.7     104.9
Utilities                   46.3      54.2      46.8      63.2      58.5
Construction               157.4     192.4     226.7     235.3     232.2
Manufacturing              344.5     393.8     442.9     499.6     510.7
  Durable-goods            117.6     133.1     160.4     174.7     176.7
  manufacturing
  Nondurable-goods         226.8     260.7     282.5     324.9     333.9
  manufacturing
Wholesale trade            118.9     142.9     163.6     181.6     200.9
Retail trade               130.2     126.0     134.1     132.9     111.6
Transportation and          40.3      53.7      63.7      85.0      68.0
warehousing
Information                145.7     188.6     199.5     193.5     228.5
Real estate and            205.2     214.4     200.6     222.3     204.0
rental and leasing (1)
Professional and           229.5     246.1     255.5     260.0     287.7
business services (2)
Educational                 76.0      82.5      75.9      80.5      74.4
services, health
care, and social
assistance
Arts, entertainment,        78.9      84.7      86.0      92.4      87.4
recreation,
accommodation,
and food services
Other services,             54.5      55.7      63.0      65.0      55.5
except government

(1). The housing component of real estate and rental and leasing is
excluded from these estimates to allow for better comparison with
nonfinancial corporate returns.
(2). To preserve the nonfinancial focus of this article, management of
companies and enterprises is excluded from this sector.

Table A. Net Operating Surplus of Domestic Nonfinancial Corporations
and Nonfinancial Industries, 1998-2017--Table Ends
[Billions of dollars]

                           2008      2009      2010      2011      2012

Nonfinancial             1,180.0   1,050.4   1,318.6   1,402.4   1,525.1
corporations
Total nonfinancial       2,400.0   2,270.7   2,518.8   2,618.4   2,648.9
industries
Agriculture,                70.8      52.4      68.8      99.5      88.2
forestry, fishing, and
hunting
Mining                     151.6      62.7      83.7     109.4      82.8
Utilities                   57.1      69.1      84.4      84.6      73.6
Construction               170.2     153.9     140.1     135.8     144.6
Manufacturing              456.0     438.2     516.9     537.1     547.6
  Durable-goods            144.7      99.9     177.0     188.4     200.7
  manufacturing
  Nondurable-goods         311.3     338.3     339.9     348.8     346.9
  manufacturing
Wholesale trade            220.7     215.5     252.0     257.2     287.6
Retail trade                96.2     114.5     122.8     114.8     125.4
Transportation and          78.4      70.2      96.2      96.6      98.6
warehousing
Information                264.2     247.6     275.2     257.1     235.5
Real estate and            253.5     257.7     242.4     272.9     299.0
rental and leasing (1)
Professional and           348.4     324.0     345.2     355.1     361.8
business services (2)
Educational                105.2     133.1     141.0     142.7     136.6
services, health
care, and social
assistance
Arts, entertainment,        83.3      86.5      99.7     109.4     119.7
recreation,
accommodation,
and food services
Other services,             44.3      45.3      50.1      46.2      47.9
except government

                           2013      2014      2015      2016      2017

Nonfinancial             1,584.3   1,639.3   1,659.6   1,592.2   1,629.7
corporations
Total nonfinancial       2,842.9   2,884.2   2,885.0   2,904.6   3,057.7
industries
Agriculture,               119.8      96.5      76.2      59.1      59.0
forestry, fishing, and
hunting
Mining                      99.7      95.2     -48.5     -60.9      -9.7
Utilities                   74.3      80.0      75.5      72.0      71.1
Construction               154.6     166.7     186.4     205.8     208.6
Manufacturing              580.5     580.0     608.1     558.4     589.5
  Durable-goods            223.6     217.4     237.6     232.0     235.4
  manufacturing
  Nondurable-goods         356.9     362.6     370.5     326.4     354.1
  manufacturing
Wholesale trade            308.8     326.9     353.9     343.4     349.9
Retail trade               136.4     130.4     139.9     148.4     152.6
Transportation and         103.3     113.6     124.4     119.9     124.7
warehousing
Information                278.3     257.4     304.4     365.6     379.6
Real estate and            330.9     365.1     361.3     361.4     372.5
rental and leasing (1)
Professional and           349.5     358.5     373.0     390.2     409.9
business services (2)
Educational                133.1     131.2     131.4     141.5     145.7
services, health
care, and social
assistance
Arts, entertainment,       126.2     131.9     147.6     149.7     153.5
recreation,
accommodation,
and food services
Other services,             47.4      50.6      51.5      49.8      50.8
except government

(1). The housing component of real estate and rental and leasing is
excluded from these estimates to allow for better comparison with
nonfinancial corporate returns.
(2). To preserve the nonfinancial focus of this article, management of
companies and enterprises is excluded from this sector.

Table B. Produced Assets of Domestic Nonfinancial Corporations and
Nonfinancial Industries, 1998-2017--Continues
[Billions of dollars]

                               1998       1999       2000       2001

Nonfinancial corporations     8,136.6    8,579.0    9,132.3    9,603.2
Total nonfinancial           10,623.6   11,260.3   12,034.1   12,500.5
industries
Agriculture, forestry,          443.4      453.6      470.3      473.7
fishing, and hunting
Mining                          546.1      541.4      588.2      666.3
Utilities                       968.7    1,001.2    1,059.6    1,113.2
Construction                    152.4      170.9      183.8      190.9
Manufacturing                 2,540.0    2,665.7    2,791.1    2,823.8
  Durable-goods               1,435.7    1,506.5    1,581.2    1,600.8
  manufacturing
  Nondurable-goods            1,104.3    1,159.1    1,209.9    1,223.0
  manufacturing
Wholesale trade                 627.4      665.2      705.4      688.0
Retail trade                    915.8      984.3    1,057.8    1,088.4
Transportation and              751.4      780.9      820.7      853.1
warehousing
Information                   1,003.7    1,084.5    1,201.0    1,268.3
Real estate and rental and      779.4      857.5      928.3      965.0
leasing (1)
Professional and business       361.6      412.4      464.2      493.6
services (2)
Educational services,           800.2      853.0      911.4      969.0
health care, and social
assistance
Arts, entertainment,            432.9      467.5      505.6      537.6
recreation,
accommodation, and
food services
Other services, except          300.7      322.3      346.7      369.5
government

                                2002       2003       2004       2005

Nonfinancial corporations     9,921.3   10,237.6   10,834.2   11,769.0
Total nonfinancial           12,944.0   13,403.4   14,557.4   15,877.2
industries
Agriculture, forestry,          492.3      520.5      556.5      596.4
fishing, and hunting
Mining                          739.4      793.6      947.3    1,242.3
Utilities                     1,152.7    1,202.7    1,332.7    1,425.3
Construction                    200.6      206.6      229.2      252.6
Manufacturing                 2,861.1    2,908.7    3,059.7    3,242.5
  Durable-goods               1,601.3    1,608.8    1,679.3    1,768.6
  manufacturing
  Nondurable-goods            1,259.8    1,299.8    1,380.4    1,473.9
  manufacturing
Wholesale trade                 698.8      719.1      784.6      864.8
Retail trade                  1,152.6    1,212.7    1,338.0    1,432.2
Transportation and              859.5      867.8      917.2      957.4
warehousing
Information                   1,289.2    1,303.2    1,380.0    1,470.8
Real estate and rental and      995.8    1,023.5    1,122.1    1,231.2
leasing (1)
Professional and business       519.9      551.9      597.2      648.4
services (2)
Educational services,         1,032.0    1,093.4    1,203.2    1,324.2
health care, and social
assistance
Arts, entertainment,            562.4      588.4      639.3      696.1
recreation,
accommodation, and
food services
Other services, except          387.7      411.3      450.4      492.9
government

                                2006       2007

Nonfinancial corporations    12,752.5   13,623.8
Total nonfinancial           17,162.7   18,198.6
industries
Agriculture, forestry,          622.0      661.8
fishing, and hunting
Mining                        1,441.3    1,532.3
Utilities                     1,524.8    1,648.2
Construction                    276.4      290.0
Manufacturing                 3,414.6    3,648.4
  Durable-goods               1,858.9    1,951.7
  manufacturing
  Nondurable-goods            1,555.6    1,696.7
  manufacturing
Wholesale trade                 940.4      998.6
Retail trade                  1,536.4    1,617.3
Transportation and            1,005.6    1,036.8
warehousing
Information                   1,603.8    1,656.3
Real estate and rental and    1,350.2    1,435.4
leasing (1)
Professional and business       700.6      742.7
services (2)
Educational services,         1,456.3    1,559.7
health care, and social
assistance
Arts, entertainment,            756.4      809.5
recreation,
accommodation, and
food services
Other services, except          533.9      561.6
government

(1). The housing component of real estate and rental and leasing is
excluded from these estimates to allow for better comparison with
nonfinancial corporate returns.
(2). To preserve the nonfinancial focus of this article, management of
companies and enterprises is excluded from this sector.

Table B. Produced Assets of Domestic Nonfinancial Corporations and
Nonfinancial Industries, 1998-2017--Table Ends
[Billions of dollars]

                              2008       2009       2010       2011

Nonfinancial corporations   14,388.5   14,536.0   14,551.8   15,191.9
Total nonfinancial          19,197.2   18,604.0   19,249.9   20,233.2
industries
Agriculture, forestry,         676.0      646.7      680.0      731.9
fishing, and hunting
Mining                       1,669.4    1,513.9    1,599.1    1,779.4
Utilities                    1,803.2    1,789.1    1,918.3    2,039.3
Construction                   304.2      279.9      272.8      277.3
Manufacturing                3,800.8    3,756.5    3,872.5    4,053.3
  Durable-goods              2,046.3    1,985.0    2,031.5    2,127.4
  manufacturing
  Nondurable-goods           1,754.5    1,771.5    1,841.1    1,925.8
  manufacturing
Wholesale trade              1,033.6      969.6    1,036.1    1,112.7
Retail trade                 1,668.3    1,571.2    1,602.6    1,669.0
Transportation and           1,098.4    1,072.5    1,095.2    1,136.4
warehousing
Information                  1,722.2    1,722.9    1,829.8    1,908.3
Real estate and rental       1,518.0    1,442.5    1,444.4    1,489.7
and leasing (1)
Professional and               787.8      795.3      820.9      853.9
business services (2)
Educational services,        1,669.1    1,650.8    1,689.9    1,765.4
health care, and social
assistance
Arts, entertainment,           862.4      835.6      831.0      848.4
recreation,
accommodation,
and food services
Other services, except         583.8      557.5      557.3      568.2
government

                               2012       2013       2014       2015

Nonfinancial corporations   15,882.3   16,506.6   17,219.0   17,754.9
Total nonfinancial          20,506.6   21,861.3   22,840.5   23,233.8
industries
Agriculture, forestry,         752.1      797.7      860.5      830.5
fishing, and hunting
Mining                       1,915.1    2,079.5    2,335.2    2,274.8
Utilities                    2,129.0    2,184.0    2,281.9    2,323.3
Construction                   284.5      295.6      307.8      321.2
Manufacturing                4,168.5    4,324.6    4,421.9    4,467.8
  Durable-goods              2,191.6    2,269.7    2,329.7    2,349.7
  manufacturing
  Nondurable-goods           1,976.9    2,054.8    2,092.1    2,118.1
  manufacturing
Wholesale trade              1,174.1    1,206.3    1,258.2    1,282.1
Retail trade                 1,731.0    1,799.3    1,848.4    1,899.5
Transportation and           1,170.2    1,209.0    1,275.2    1,321.5
warehousing
Information                  1,948.4    2,007.6    2,071.1    2,121.3
Real estate and rental       1,541.1    1,604.9    1,671.3    1,740.5
and leasing (1)
Professional and               882.2      860.0      940.6      968.2
business services (2)
Educational services,        1,820.8    1,913.4    1,974.6    2,033.6
health care, and social
assistance
Arts, entertainment,           871.8      920.4      969.4    1,008.9
recreation,
accommodation,
and food services
Other services, except         578.4      601.1      624.4      640.5
government

                              2016       2017

Nonfinancial corporations   18,112.2   18,688.8
Total nonfinancial          23,811.2   24,765.9
industries
Agriculture, forestry,         828.1      846.6
fishing, and hunting
Mining                       2,168.0    2,190.0
Utilities                    2,418.1    2,505.7
Construction                   339.1      341.4
Manufacturing                4,567.3    4,756.4
  Durable-goods              2,374.8    2,455.3
  manufacturing
  Nondurable-goods           2,192.5    2,301.1
  manufacturing
Wholesale trade              1,323.7    1,391.8
Retail trade                 1,958.6    2,031.4
Transportation and           1,368.1    1,427.0
warehousing
Information                  2,201.9    2,336.0
Real estate and rental       1,808.9    1,888.8
and leasing (1)
Professional and             1,003.2    1,051.8
business services (2)
Educational services,        2,084.2    2,171.1
health care, and social
assistance
Arts, entertainment,         1,072.9    1,133.8
recreation,
accommodation,
and food services
Other services, except         669.1      694.1
government

(1). The housing component of real estate and rental and leasing is
excluded from these estimates to allow for better comparison with
nonfinancial corporate returns.
(2). To preserve the nonfinancial focus of this article, management of
companies and enterprises is excluded from this sector.

Table C. Rates of Return for Domestic Nonfinancial Corporations and
Nonfinancial Industries, 1998-2017--Continues
[Percent]

                         1998   1999   2000   2001   2002   2003   2004

Nonfinancial              7.2    6.9    6.2    5.8    6.4    6.8    7.4
corporations--after
tax
Nonfinancial              9.1    8.8    8.0    6.9    7.3    8.0    9.0
corporations--before
tax
Total nonfinancial       13.3   13.0   12.2   11.4   11.9   13.0   14.0
industries
Agriculture, forestry,   11.9   11.4   12.4   12.2    8.9   12.5   15.7
fishing, and hunting
Mining                   -1.8   -0.9    2.9    3.3    1.0    3.5    4.6
Utilities                 4.9    5.9    5.0    5.1    3.6    3.9    4.3
Construction             72.0   70.0   70.5   70.1   69.3   77.3   88.3
Manufacturing            12.8   12.5   11.7    9.6   10.3   11.9   13.2
  Durable-goods           9.9    8.5    8.0    3.6    5.2    7.3    8.1
  manufacturing
  Nondurable-goods       16.5   17.7   16.6   17.4   16.8   17.7   19.5
  manufacturing
Wholesale trade          17.6   16.8   16.8   15.2   15.1   16.8   19.0
Retail trade             13.5   12.3   11.1   10.8   10.8   11.0    9.9
Transportation and        4.4    3.7    3.6    3.7    2.9    4.7    6.0
warehousing
Information              11.4   11.4    5.3    5.9   10.5   11.2   14.1
Real estate and rental   19.8   16.0   17.3   16.8   18.7   20.3   20.0
and leasing (1)
Professional and         47.2   45.1   37.0   38.0   41.8   42.8   42.8
business services (2)
Educational services,
health care, and
social assistance
                          6.9    7.0    7.1    7.5    7.2    7.2    7.2
Arts, entertainment,     13.3   14.3   15.5   12.6   14.1   13.7   13.8
recreation,
accommodation,
and food services
Other services,          24.4   24.0   23.7   16.3   17.4   13.7   12.9
except government

                         2005   2006   2007

Nonfinancial              7.5    7.7    7.0
corporations--after
tax
Nonfinancial              9.7   10.0    9.1
corporations--before
tax
Total nonfinancial       13.8   13.7   13.0
industries
Agriculture, forestry,   13.4   10.0   11.0
fishing, and hunting
Mining                    6.4    6.2    7.1
Utilities                 3.4    4.3    3.7
Construction             94.1   89.0   82.0
Manufacturing            14.1   15.0   14.5
  Durable-goods           9.3    9.6    9.3
  manufacturing
  Nondurable-goods       19.8   21.5   20.5
  manufacturing
Wholesale trade          19.8   20.1   20.7
Retail trade              9.7    9.0    7.1
Transportation and        6.8    8.7    6.7
warehousing
Information              14.0   12.6   14.0
Real estate and rental   17.0   17.2   14.6
and leasing (1)
Professional and         41.0   38.5   39.9
business services (2)
Educational services,
health care, and
social assistance
                          6.0    5.8    4.9
Arts, entertainment,     12.9   12.7   11.2
recreation,
accommodation,
and food services
Other services,          13.3   12.7   10.1
except government

(1). The housing component of real estate and rental and leasing is
excluded from these estimates to allow for better comparison with
nonfinancial corporate returns.
(2). To preserve the nonfinancial focus of this article, management of
companies and enterprises is excluded from this sector.

Table C. Rates of Return for Domestic Nonfinancial Corporations and
Nonfinancial Industries, 1998-2017--Table Ends
[Percent]

                          2008   2009   2010   2011   2012   2013   2014

Nonfinancial               6.8    6.1    7.7    7.9    8.1    8.0    7.8
corporations--after tax
Nonfinancial               8.2    7.2    9.1    9.2    9.6    9.6    9.5
corporations--before
tax
Total nonfinancial        12.8   12.0   13.3   13.3   12.9   13.3   12.9
industries
Agriculture, forestry,    10.6    7.9   10.4   14.1   11.9   15.5   11.6
fishing, and hunting
Mining                     9.5    3.9    5.4    6.5    4.5    5.0    4.3
Utilities                  3.3    3.8    4.6    4.3    3.5    3.4    3.6
Construction              57.3   52.7   50.7   49.4   65.5   53.3   55.3
Manufacturing             12.2   11.6   13.6   13.6   13.3   13.7   13.3
  Durable-goods            7.2    5.0    8.8    9.1    9.3   10.0    9.5
  manufacturing
  Nondurable-goods        18.0   19.2   18.8   18.5   17.8   17.7   17.5
  manufacturing
Wholesale trade           21.7   21.5   25.1   23.9   25.2   25.9   26.5
Retail trade               5.9    7.1    7.7    7.0    7.4    7.7    7.1
Transportation and         7.3    6.5    8.9    8.7    8.5    8.7    9.1
warehousing
Information               15.6   14.4   15.5   13.8   12.2   14.1   12.6
Real estate and           17.2   17.4   16.8   18.6   19.7   21.0   22.3
rental and leasing (1)
Professional and          45.5   40.9   42.7   42.4   41.7   38.8   38.6
business services (2)
Educational services,
health care, and social
assistance                 6.5    8.0    8.4    8.3    7.6    7.1    6.7
Arts, entertainment,      10.0   10.2   12.0   13.0   13.9   14.1   14.0
recreation,
accommodation,
and food services
Other services,            7.7    7.9    9.0    8.2    8.4    8.0    8.3
except government

                          2015   2016   2017

Nonfinancial               7.7    7.3    7.4
corporations--after tax
Nonfinancial               9.3    8.8    8.7
corporations--before
tax
Total nonfinancial        12.5   12.3   12.6
industries
Agriculture, forestry,     9.0    7.1    7.0
fishing, and hunting
Mining                    -2.1   -2.7   -0.4
Utilities                  3.3    3.0    2.9
Construction              59.3   62.3   61.3
Manufacturing             13.7   12.4   12.6
  Durable-goods           10.2    9.8    9.7
  manufacturing
  Nondurable-goods        17.6   15.1   15.8
  manufacturing
Wholesale trade           27.9   26.4   25.8
Retail trade               7.5    7.7    7.7
Transportation and         9.6    8.9    8.9
warehousing
Information               14.5   16.9   16.7
Real estate and           21.2   20.4   20.1
rental and leasing (1)
Professional and          39.1   39.6   39.9
business services (2)
Educational services,
health care, and social
assistance                 6.6    6.9    6.8
Arts, entertainment,      14.9   14.4   13.9
recreation,
accommodation,
and food services
Other services,            8.1    7.6    7.5
except government

(1). The housing component of real estate and rental and leasing is
excluded from these estimates to allow for better comparison with
nonfinancial corporate returns.
(2). To preserve the nonfinancial focus of this article, management of
companies and enterprises is excluded from this sector.

Table D. Net Operating Surplus Share of Net Value Added for Domestic
Nonfinancial Corporations and Nonfinancial Industries,
1998-2017--Continues
[Percent]

                        1998    1999    2000   2001   2002   2003   2004

Nonfinancial             13.8    13.1   11.8   11.8   13.5   14.2   15.2
corporations--after
tax
Nonfinancial             17.5    16.8   15.2   14.1   15.4   16.8   18.6
corporations--before
tax
Total nonfinancial       25.3    24.1   22.3   20.1   21.0   23.0   24.8
industries
Agriculture, forestry,   62.3    67.8   84.9   78.6   58.0   91.2   96.9
fishing, and hunting
Mining                  -17.4   -12.6   39.3   31.1    9.4   46.4   49.5
Utilities                36.0    47.2   37.5   40.1   30.0   35.0   39.3
Construction             32.1    31.3   31.5   30.0   29.3   33.6   38.5
Manufacturing            27.4    27.2   25.8   20.9   24.4   28.9   31.6
  Durable-goods          20.2    17.7   17.2    7.5   12.7   17.9   19.3
  manufacturing
  Nondurable-goods       38.0    40.9   37.8   40.1   38.6   42.5   46.8
  manufacturing
Wholesale trade          22.0    20.6   21.2   18.3   18.4   20.9   23.9
Retail trade             21.8    19.7   18.4   18.0   18.2   19.0   17.5
Transportation and       15.5    12.2   12.1   12.0    9.7   16.1   20.1
warehousing
Information              37.4    35.6   16.0   21.2   36.9   35.8   44.8
Real estate and          66.8    61.8   63.7   63.8   66.5   67.5   67.4
rental and leasing (1)
Professional and         23.4    23.2   19.8   20.3   22.5   23.6   24.2
business services (2)
Educational services,     9.8    10.2   10.3   11.0   10.4   10.2   10.3
health care, and
social assistance
Arts, entertainment,     19.6    21.2   22.5   17.9   21.0   20.1   20.6
recreation,
accommodation,
and food services
Other services,          32.6    31.8   32.2   22.2   26.0   20.5   21.1
except government

                         2005   2006   2007

Nonfinancial             15.6   16.4   15.5
corporations--after
tax
Nonfinancial             20.3   21.3   20.0
corporations--before
tax
Total nonfinancial       24.6   24.2   22.9
industries
Agriculture, forestry,   67.7   62.5   76.4
fishing, and hunting
Mining                   69.0   58.2   61.4
Utilities                31.0   43.0   34.0
Construction             40.7   37.8   34.9
Manufacturing            33.5   35.7   34.4
  Durable-goods          22.0   22.6   21.7
  manufacturing
  Nondurable-goods       47.4   52.0   49.7
  manufacturing
Wholesale trade          25.1   25.8   26.5
Retail trade             18.1   17.0   13.9
Transportation and       21.4   26.7   19.5
warehousing
Information              42.2   39.5   46.6
Real estate and          63.5   64.1   60.4
rental and leasing (1)
Professional and         23.5   22.1   22.9
business services (2)
Educational services,     8.8    9.0    7.8
health care, and
social assistance
Arts, entertainment,     19.6   20.2   18.0
recreation,
accommodation,
and food services
Other services,          22.8   22.6   18.5
except government

(1). The housing component of real estate and rental and leasing is
excluded from these estimates to allow for better comparison with
nonfinancial corporate returns.
(2). To preserve the nonfinancial focus of this article, management of
companies and enterprises is excluded from this sector.

Table D. Net Operating Surplus Share of Net Value Added for Domestic
Nonfinancial Corporations and Nonfinancial Industries, 1998-2017--Table
Ends
[Percent]

                         2008   2009   2010   2011   2012   2013   2014

Nonfinancial             15.7   15.4   18.2   18.5   18.7   18.6   18.1
corporations--after
tax
Nonfinancial             19.1   18.3   21.5   21.8   22.3   22.3   22.1
corporations--before
tax
Total nonfinancial       22.7   21.2   24.2   24.1   23.2   23.6   23.0
industries
Agriculture, forestry,   64.3   47.1   74.0   91.5   62.4   87.2   56.8
fishing, and hunting
Mining                   75.3   23.5   53.3   58.8   36.4   46.6   40.5
Utilities                33.0   39.1   44.2   40.5   34.4   36.7   38.8
Construction             25.0   25.1   26.5   27.6   29.5   29.8   30.3
Manufacturing            30.0   30.2   38.3   37.3   36.5   37.6   36.3
  Durable-goods          17.4   12.7   26.6   25.2   25.3   26.9   25.2
  manufacturing
  Nondurable-goods       45.2   50.7   49.7   50.4   49.1   50.1   49.5
  manufacturing
Wholesale trade          27.5   26.0   32.4   30.8   32.7   32.9   33.4
Retail trade             12.0   14.8   16.3   14.7   15.7   16.4   15.0
Transportation and       22.4   19.5   28.5   26.3   25.7   25.7   27.2
warehousing
Information              49.2   43.7   50.7   45.2   41.9   50.4   42.1
Real estate and          65.0   66.5   66.4   68.2   69.3   69.9   71.2
rental and leasing (1)
Professional and         25.8   22.3   25.1   24.9   24.0   22.0   22.1
business services (2)
Educational services,    10.5   12.2   12.1   11.8   11.0   10.3    9.9
health care, and
social assistance
Arts, entertainment,     16.5   16.9   19.8   20.8   21.7   21.4   21.3
recreation,
accommodation,
and food services
Other services,          14.6   15.0   16.8   15.4   15.8   14.9   15.5
except government

                          2015    2016    2017

Nonfinancial              17.8    16.9    17.0
corporations--after
tax
Nonfinancial              21.5    20.4    20.0
corporations--before
tax
Total nonfinancial        21.8    21.0    21.4
industries
Agriculture, forestry,    50.4    45.9    52.8
fishing, and hunting
Mining                   -20.2   -76.8   -20.3
Utilities                 35.0    33.7    33.0
Construction              31.2    31.5    29.7
Manufacturing             37.1    32.8    35.6
  Durable-goods           26.8    25.0    25.4
  manufacturing
  Nondurable-goods        49.2    42.4    48.5
  manufacturing
Wholesale trade           34.5    31.9    32.7
Retail trade              15.7    15.9    15.9
Transportation and        28.0    25.0    25.5
warehousing
Information               49.8    54.4    50.9
Real estate and           69.6    67.7    67.8
rental and leasing (1)
Professional and          21.9    21.6    21.9
business services (2)
Educational services,      9.6     9.9     9.7
health care, and
social assistance
Arts, entertainment,      22.5    21.3    20.9
recreation,
accommodation,
and food services
Other services,           15.0    13.9    13.9
except government

(1). The housing component of real estate and rental and leasing is
excluded from these estimates to allow for better comparison with
nonfinancial corporate returns.
(2). To preserve the nonfinancial focus of this article, management of
companies and enterprises is excluded from this sector.

Table E. Q-type Ratios, 1960-2017

       Q1 (1)   Q2 (2)   Q3 (3)

1960   0.79     0.95     0.79
1961   0.86     1.01     0.87
1962   0.80     0.96     0.83
1963   0.85     1.01     0.89
1964   0.95     1.11     1.01
1965   1.02     1.18     1.09
1966   0.82     0.98     0.90
1967   0.97     1.14     1.06
1968   1.05     1.22     1.14
1969   0.80     0.97     0.90
1970   0.73     0.90     0.82
1971   0.79     0.96     0.87
1972   0.91     1.08     0.98
1973   0.64     0.80     0.71
1974   0.37     0.52     0.39
1975   0.44     0.58     0.54
1976   0.49     0.63     0.60
1977   0.39     0.53     0.50
1978   0.36     0.50     0.48
1979   0.38     0.50     0.50
1980   0.43     0.55     0.55
1981   0.35     0.46     0.46
1982   0.36     0.47     0.48
1983   0.41     0.52     0.52
1984   0.37     0.49     0.48
1985   0.43     0.56     0.56
1986   0.49     0.64     0.62
1987   0.48     0.64     0.60
1988   0.50     0.68     0.62
1989   0.58     0.76     0.72
1990   0.52     0.70     0.66
1991   0.68     0.86     0.81
1992   0.72     0.91     0.88
1993   0.77     0.99     0.90
1994   0.73     0.94     0.83
1995   0.92     1.13     1.00
1996   0.98     1.19     1.03
1997   1.18     1.40     1.22
1998   1.41     1.65     1.43
1999   1.77     2.02     1.73
2000   1.44     1.69     1.34
2001   1.21     1.48     1.12
2002   0.90     1.17     0.82
2003   1.13     1.40     1.04
2004   1.20     1.45     1.08
2005   1.15     1.38     1.01
2006   1.18     1.40     1.03
2007   1.20     1.41     1.04
2008   0.73     0.94     0.65
2009   0.90     1.12     0.78
2010   1.02     1.25     0.89
2011   0.97     1.20     0.86
2012   1.04     1.28     0.96
2013   1.31     1.56     1.20
2014   1.38     1.63     1.29
2015   1.27     1.55     1.17
2016   1.34     1.62     1.22
2017   1.52     1.80     1.38

(1). Q1 is the market value of outstanding equity divided by the net
stock of produced assets valued at current cost.
(2). Q2 is the market value of outstanding equity plus book value of
outstanding corporate bonds divided by the net stock of produced assets
valued at current cost.
(3). Q3 is the market value of outstanding equity plus market value of
outstanding corporate bonds plus net liquid assets divided by the net
stock of produced assets valued at current cost.