Comparison of 1997 TSAs to the 1992 TSAs

Introduction

The 1997 TSAs cannot be compared to prior TSAs because of the change in the method for estimating in-house transportation and in the industrial classification system for the I-O accounts, as previously mentioned. To allow for comparison, the 1992 TSAs were re-estimated using the 1997 TSAs procedure. The re-estimation procedure does not remove the contribution of in-house bus transportation services from the measure of in-house transportation but, rather, corrects for the effects of significant changes in the industrial classification system. The following presents the results from the re-estimation at the major group level.²² Comparisons at levels more detailed than the sector level cannot be made with confidence because of the change in the industrial classification system.

Even at the sector level, the change in the industrial classification system has some effect on the comparisons presented below. In particular, the 1997 classification system classifies scenic and sightseeing transportation as transportation, but the 1992 classification identifies only a portion of this industry as transportation (spread across several transportation industries, including air, rail, water, and transportation services) and the remainder as amusement and recreation. Additionally, the 1997 classification system classifies couriers and messengers as a separate transportation industry, while the 1992 classification system includes these services (except those provided by air) in the for-hire truck transportation industry. As such, the 1992 for-hire truck transportation sector is larger than the 1997 for-hire truck transportation sector as it includes a larger number of industries. The pipeline transportation sector in 1992 also is larger than that in 1997, as it includes the natural gas transportation industry, which was classified under the utility sector in 1992. Finally, the 1997 classification system classifies broadcasting and telecommunications as information (and, hence, under the service sector), while the 1992 classification system classifies this industry as communications. Table 13 provides a summary of these changes and indicates where an adjustment was made to the 1992 TSAs based on the 1997 TSAs procedure. The 1996 TSAs were not re-estimated using the 1997 TSAs procedure due to a lack of detailed information for the year.

Findings From the 1997 and 1992 TSAs

Changes in the Contribution of Transportation to GDP

The previously published 1992 TSAs showed that for-hire transportation services and in-house trucking contributed $374.6 billion (in 1997 dollars), or 5.0 percent, to GDP. Based on the 1997 procedure for estimating the in-house portion of transportation, these same services contributed $409.1 billion (in 1997 dollars), or 5.5 percent, to GDP in 1992. The $26.9 billion difference between these two estimates for 1992 results primarily from the larger value of in-house truck transportation estimated under the procedure for the 1997 TSAs.

Under the 1997 TSAs' procedure, the value added by for-hire truck transportation services and in-house trucking collectively declined, in real 1997 dollars, by $67.2 billion between 1992 and 1997. This decline is a result of a decline in the contribution of for-hire and in-house truck transportation to GDP. Between 1992 and 1997, the value added by for-hire truck transportation declined, in real 1997 dollars, from $93.1 billion to $81.4 billion. The value added by in-house truck transportation also declined, in real 1997 dollars, from $172.3 billion to $116.7 billion.

Although the contribution of for-hire and in-house truck transportation decreased by $67.2 billion (in 1997 dollars) between 1992 and 1997, the value added by all transportation services fell only by $41.2 billion (in 1997 dollars). This smaller decline results from a real growth in the value added by other for-hire transportation services and from the inclusion of the value added by other in-house transportation services in 1997. In 1997, the value added by other in-house transportation services (air, rail, and water) was $6.0 billion (see table 14).

Changes in the Use of Transportation Services by Industry

Based on the 1997 TSAs procedure, the manufacturing sector used the most transportation services ($134.0 billion in 1997 dollars) followed by the services sector ($113.5 billion in 1997 dollars) in 1992. In 1997 this relationship reversed, with the services sector using more transportation services than the manufacturing sector ($166.0 billion and $148.9 billion respectively in 1997 dollars). In both years the manufacturing sector was the largest user of for-hire truck transportation, and the construction sector was the largest user of in-house truck transportation.

Across all sectors except natural resources and mining and utilities and communications, the use of in-house truck transportation increased in real dollars between 1992 and 1997. For several sectors, the increased use of in-house truck transportation follows from a decline in the use of for-hire truck transportation. In the services sector, in-house truck transportation grew in real 1997 dollars from $67.7 billion in 1992 to $93.1 billion in 1997, while for-hire truck transportation declined in real 1997 dollars from $17.7 billion in 1992 to $11.3 billion in 1997. For-hire truck transportation use also declined, in real dollars, in the trade (wholesale and retail) and construction sectors, while in-house truck transportation use increased (see table 15).

Looking at the use of transportation as a share of a sector's total output (or in I-O terms, at the direct requirements coefficient), it can be seen that transportation became more important in producing a dollar of output in several sectors between 1992 and 1997. For all nontransportation sectors, the use of all transportation relative to all other commodities grew slightly, with the largest growth occurring in the construction sector. Based on the 1997 procedure and 1997 classification, total transportation services required per dollar of construction output grew from 11.1 in 1992 to 14.5 in 1997. In both 1992 and 1997, the construction sector was the largest user of all transportation services among nontransportation sectors (see table 16).

Changes in the Direct Cost of Transportation Services by Commodity

Among nontransportation commodities, the transportation content increased the most among those produced primarily in the sectors using significantly more transportation services in 1997 than in 1992. In particular, the total for-hire and in-house truck transportation content of trade (retail and wholesale) commodities increased, after accounting for the change in methodology and the classification system, from 6.4 percent in 1992 to 8.2 percent in 1997. This increase results almost entirely from a real increase in the use of for-hire transportation and inhouse trucking in the trade sector (see table 17).

The in-house truck transportation content of construction commodities increased most significantly, which, after accounting for methodology and classification system changes, grew from 9.1 percent in 1992 to 12.4 percent in 1997. The use of in-house trucking in the manufacturing sector grew more quickly than that in the construction sector between 1992 and 1997; however, the in-house truck transportation content of manufacturing commodities grew only marginally. The transportation content of construction commodities increased more significantly than that of manufacturing commodities because transportation accounts for a larger share of total output in the construction sector than in the manufacturing sector (the sectors in which each commodity is produced primarily).

Changes in the Total Cost of Transportation Services

In both 1992 and 1997, an increase in the final demand for construction had the largest effect on total transportation output (both before and after accounting for the methodology and classification system changes). Across all sectors, a dollar increase in final demand for the services provided by the sector had a larger effect on in-house truck transportation than for-hire truck transportation. This strong reliance on in-house truck transportation relative to for-hire truck transportation to produce a dollar of output can be seen, for each sector, in table 18.

With regards to the indirect effect of transportation (the second component of the total cost of transportation services), it can be seen in table 19 that the total industry output multiplier (derived using the 1997 procedure and the 1997 classification system) for for-hire air, truck, and water and in-house truck transportation grew between 1992 and 1997. This growth indicates that an investment in any of these modes has a greater economic impact in 1997 than in 1992. In contrast, the total industry output multiplier for for-hire rail and for warehousing declined and the total industry output multiplier for for-hire pipelines remained nearly constant. The decline in the output multiplier for for-hire rail may be due to the fact that for-hire rail includes scenic and sightseeing rail transportation in 1992 but not in 1997, rather than to a decline in the responsiveness of the economy to a change in the demand for transportation services.

²² Major groups differ from the sectors used in the TSAs in that they classify all service sectors into a single service group. Additionally, the utilities and communications sectors are classified as a single group. The major groups are: natural resources and mining, construction, manufacturing, trade (retail and wholesale), utilities and communications, services, for-hire transportation, and in-house truck transportation.