Chapter 7.pdf

The following provides an overview of the contribution of the service sectors to the economy and the use of transportation by the sectors.

There are six service sectors: (1) information; (2) financial services; (3) professional and business services; (4) education and health services; (5) leisure and hospitality; and (6) other services.

The information sector consists of establishments engaging in the production and distribution of information and cultural products and the processing of data.

The financial services sector consists of services related to finance and insurance activities as well as real estate, rental, and leasing. With regards to finance and insurance, the sector includes establishments engaging in financial transactions (transactions involving the creation, liquidation, or change in ownership of financial assets) and/or facilitating financial transactions. With regards to real estate, rental, and leasing, the sector includes establishments engaging in the rental or leasing of tangible (e.g., real estate, equipment, etc.) or intangible (e.g., patents) assets and establishments providing related services.

The professional and business services sector consists of professional, scientific, and technical services; management of companies and enterprises; and administrative and support and waste management and remediation services. It includes logistics consulting services used in moving goods from point of origin to point of consumption.

The education and health services sector consists of establishments that provide instruction and training (e.g., schools, universities, training centers, etc.) and establishments that provide health care and social assistance for individuals.

The leisure and hospitality sector consists of establishments providing art, entertainment, and recreation services as well as establishments providing accommodation and food services.

Other services consists of establishments providing services not captured elsewhere, such as equipment and machinery repair, religious activities, grant making, advocacy, personal care services, etc. ¹

Figure 7-1

Table 7-1

The service sectors collectively use the second largest dollar amount of transportation services. However, per dollar of output, each service sector requires less transportation than most other sectors. The service sectors collectively rely heavily on truck transportation, primarily in-house truck transportation, and employ a large number in a variety of transportation occupations such as bus drivers, light truck/delivery services drivers, commercial pilots, parking lot attendants, etc.

The contribution of the service sectors to the national economy has grown. In 1997 the service sector contributed 46.3 percent, 49.8 percent in 2007, and 51.8 percent in 2015. In 2015 the service sectors collectively contributed $9,291.7 billion (51.8 percent) to the national economy, as measured by Gross Domestic Product (GDP). The financial services sector contributed more than all other service sectors.

The largest amount of service sector activity occurred in California ($1,381.5 billion), followed by New York ($970.8 billion), Texas ($651.0 billion), Florida ($510.0 billion), Illinois ($420.4 billion), and Pennsylvania ($376.7 billion)— each of which accounted for 4 percent or more of national activity in the services sectors (figure 7-2, table 7-2).

California, New York, Texas, Florida, Illinois, and Pennsylvania contributed the most to national economy related to services and the most to national activity overall (they also have the largest gross state product (GSP)). Texas contributed more to the national economy than New York in 2015, but New York contributed more in terms of service sector activity to the national economy due to significantly higher activity in information, financial services, and education and health services (Appendix A).

Computing the percent of service sector activity as a percent of GSP, rather than as a share of GDP, also provides useful insights to U.S. production. Nationally, California lead in service sector activity in 2015. However, service sector activity accounted for a smaller share of GSP in California (56.2 percent) than in Delaware (68.1 percent, or $46.3 billion) and New York (67.4 percent, or $970.8 billion)— the two States where service sector activity accounted for more than two-thirds of GSP in 2015 (see Appendix A).

The service sectors combined were the second largest user of transportation services in 2014 ($264.8 billion). Looking at the use of air, rail, truck, and water transportation services, the combined service sectors used more in-house operations ($114.1 billion) than for-hire air, rail, truck, and water services ($79.7 billion) (figure 7-3).

The service sectors collectively used $264.8 billion of transportation services in 2014 (figure 7-3). In 2014, the service sectors collectively used:

• Primarily truck transportation services (e.g., for transporting linens and other products to hotels), which accounted for 48.4 percent of all transportation services used by the sector.
• About 3.7 times more in-house truck operations ($100,732 million) than for-hire truck transportation services ($27,372 million). In-house truck transportation operations accounted for slightly more than one-third (38.0 percent) of all transportation services used by the service sectors.
• A relatively large amount of other transportation and support activities (sightseeing, parcel delivery, courier, and messenger services excluding U.S. Postal Service, transportation support activities such as freight loading, etc.). Other transportation and support services (e.g., sightseeing by bus or boat and vehicle cleaning services) accounted for 16.0 percent ($42,308 million) of the transportation services used by the service sectors.
• A modest amount of for-hire transit and ground passenger transportation (e.g., bus transportation purchased for workers) totaling 6.9 percent ($18,176 million) of the transportation services used by the service sectors.
• Warehousing (e.g., storage for medical records, etc.) summing to 3.8 percent ($10,179) of all transportation services used by the service sectors (figure 7-4).

While the service sectors collectively were the second largest user of transportation services, they individually did not depend as heavily on transportation as other sectors in 2014. The leisure and hospitality sector required the most transportation services to produce one dollar of output (requiring 3.2¢) among services sectors but much less than the wholesale and retail trade, which required the most transportation services (9.9¢) to produce one dollar of output.

Among service sectors, the other services sector (e.g., grant-making, dry cleaning, machinery repair, etc.) required the second largest amount of transportation services to produce one dollar of output (2.9¢) in 2014 followed by professional and business services (2.8¢), education and health services (1.6¢), information (1.5¢), and the financial services sector (0.8¢) (figure 7-5).

All of the service sectors relied less on transportation services than other commodities in producing output in 2014. Each service sector required 3.2¢ worth of transportation services or less to produce one dollar of output (figure 7-5). The leisure and hospitality service sector required the most transportation services (3.2¢) to produce one dollar of output among the service sectors but required substantially more of other commodities. For example, manufactured products (e.g., food and beverage and tobacco products) were the most important input to the leisure and hospitality services sector, with the sector requiring 12.7¢ worth to produce one dollar of output (figure 7-6).

Among the service sectors, the professional and business services sector employed the largest number in transportation and material moving occupations (1.2 million), accounting for 6.2 percent of its work force in 2015. The education and health services sector employed the second largest in transportation and material moving occupations (388,080) in 2015, followed by the other services sector (387,470), the leisure and hospitality sector (299,480), the financial services sector (135,250), and the information sector (46,110) (figure 7-7). Transportation workers include motor vehicle operators, ship engineers, aircraft pilots and flight engineers, etc. Material moving workers support transportation activities and include occupations such as cleaners of vehicles and ship loaders.

Transportation and material moving workers in the all service sectors earned a lower median than workers of all occupations in the same service sector except in the arts, entertainment, and recreation sector in 2015. In the arts, entertainment, and recreation sector, transportation and material moving workers earned a median wage of $25,840, while workers of all occupations in the arts, entertainment, and recreation industry earned a lower median wage ($24,940) (figure 7-8).

Each service sector contains several industries. Each industry employed different types of transportation workers. Most industries employed the largest number of transportation workers as motor vehicle operators, ranging from heavy and tractor-trailer truck drivers to taxi drivers and chauffeurs. Of the motor vehicle workers, driver/sales workers earned the lowest median wage. Across industries, driver/sales workers earned the lowest median wage in the accommodation and food services industry ($18,990). The arts, entertainment, and recreation industry as well as the other services industry employed the largest number of transportation workers as parking lot attendants, who earned a relatively low median wage (roughly $20,000) (figure 7-8).

The 2002 Vehicle Inventory and Use Survey (VIUS) is the most recent survey of vehicle ownership and use by industry. According to the 2002 VIUS, the service industries collectively operated, at 3.7 million, the second largest number of trucks next to the construction industry. The service industries also collectively accumulated the second largest number of truck miles (59.7 billion).