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32. 1997 Economic Census





888. Net Stock of Fixed Private Capital, by Industry

[In billions of dollars (12,760 represents $12,760,000,000,000) except quantity indexes, 1992=100] Standard Industrial Classification. For description of methodology, see below table]

 
Industry 1990 1991 1992 1993 1994 1995 1996 1997 1998
 
      Fixed private capital 12760 13022 13583 14318 15204 15908 16723 17573 18643
 
  Agriculture, forestry, and fishing 481 485 494 510 535 551 569 589 614
    Farms 447 448 454 467 486 498 511 525 544
      Housing 161 162 167 173 182 187 192 198 206
      Other 285 286 287 294 304 311 319 327 338
    Agricultural services, forestry, and fishing 35 37 40 44 49 53 59 63 70
 
  Mining 431 404 406 418 433 455 483 501 530
    Metal mining 29 29 30 31 33 34 36 36 37
    Coal mining 32 32 32 34 36 39 41 44 47
    Oil and gas extraction 350 324 325 334 344 360 384 397 420
    Nonmetallic minerals, except fuels 19 19 19 19 20 21 22 24 26
 
  Construction 82 82 83 87 93 101 109 118 129
 
  Manufacturing 1217 1248 1286 1327 1387 1457 1521 1590 1660
 
    Durable goods 636 646 661 678 709 747 782 821 861
      Lumber and wood products 25 25 25 26 27 29 31 32 33
      Furniture and fixtures 11 11 11 12 13 13 14 14 15
      Stone, clay, and glass products 40 40 40 41 42 44 46 50 55
      Primary metal industries 116 116 117 118 122 126 129 131 134
      Fabricated metal products 70 70 72 74 77 81 84 87 91
      Industrial machinery and equipment 110 112 115 117 121 126 130 137 143
      Electronic and other electric equipment 92 94 96 100 108 120 133 143 153
      Motor vehicles and equipment 64 66 68 73 78 85 90 96 102
      Other transportation equipment 51 52 53 54 54 55 55 57 60
      Instruments and related products 45 47 50 51 53 54 56 59 59
      Miscellaneous manufacturing industries 12 12 12 13 13 14 15 15 15
 
    Nondurable goods 581 602 626 648 679 711 738 769 800
      Food and kindred products 119 122 127 132 138 146 151 159 166
      Tobacco products 9 9 9 9 9 9 10 10 10
      Textile mill products 34 34 34 35 37 38 39 40 41
      Apparel and other textile products 11 11 12 12 13 13 14 14 14
      Paper and allied products 84 87 89 91 94 98 101 104 108
      Printing and publishing 52 54 55 56 58 59 61 63 66
      Chemicals and allied products 157 165 173 181 190 200 210 221 229
      Petroleum and coal products 75 78 82 86 90 93 95 96 96
      Rubber and miscellaneous plastics products 38 40 42 44 48 52 55 60 65
      Leather and leather products 3 3 3 3 3 3 3 3 3
 
  Transportation and public utilities 1855 1894 1955 2055 2140 2232 2313 2398 2477
 
    Transportation 582 586 601 634 661 692 721 748 776
      Railroad transportation 304 303 307 324 329 337 349 353 349
      Local and interurban passenger transit 21 21 22 23 24 25 27 27 28
      Trucking and warehousing 71 71 72 77 89 99 104 114 126
      Water transportation 35 35 35 36 37 37 38 39 40
      Transportation by air 85 91 99 104 108 115 122 131 147
      Pipelines, except natural gas 38 39 40 42 44 44 45 47 47
      Transportation services 26 27 27 28 30 34 36 37 40
 
    Communications 436 450 469 494 519 549 587 618 660
      Telephone and telegraph 377 386 401 420 439 458 484 505 534
      Radio and television 59 64 69 74 80 91 103 113 126
 
    Electric, gas, and sanitary services 837 857 885 927 959 991 1005 1033 1041
      Electric services 609 618 632 656 675 696 701 715 721
      Gas services 165 171 180 192 200 205 212 222 223
      Sanitary services 63 68 73 78 84 89 92 95 97
 
  Wholesale trade 286 291 301 322 351 379 405 433 463
 
  Retail trade 391 404 423 449 482 514 550 583 617
 
  Finance, insurance, and real estate 7466 7639 8029 8505 9088 9481 9986 10518 11239
    Depository institutions 236 242 255 260 266 268 275 285 301
    Nondepository institutions 114 118 117 130 151 166 192 208 239
    Security and commodity brokers 40 43 44 53 59 63 69 75 84
    Insurance carriers 89 95 103 111 124 139 146 155 165
    Insurance agents, brokers, and service 8 9 9 10 12 13 14 16 17
    Real estate 1 6944 7097 7463 7900 8429 8779 9232 9714 10359
      Owner-occupied housing 4337 4445 4718 5053 5459 5718 6050 6394 6843
      Tenant-occupied housing 1640 1655 1711 1765 1831 1880 1953 2026 2145
      Other 967 997 1034 1082 1139 1182 1229 1293 1372
    Holding and other investment offices 35 36 38 42 46 52 59 65 73
 
  Services 552 575 606 646 695 739 786 843 913
    Hotels and other lodging places 105 108 110 115 121 125 136 148 161
    Personal services 27 26 25 25 26 27 27 29 31
    Business services 99 103 107 115 122 131 139 147 161
    Auto repair, services, and parking 62 70 78 87 101 111 119 125 131
    Miscellaneous repair services 9 10 10 10 11 12 13 14 16
    Motion pictures 16 17 18 21 24 28 31 35 39
    Amusement and recreation services 34 35 36 39 43 47 50 55 59
 
    Other services 200 208 221 233 246 257 272 291 314
      Health services 98 103 111 120 128 135 143 153 165
      Legal services 18 18 18 19 19 19 20 20 21
      Educational services 11 11 12 13 13 14 15 16 17
      Other 1 73 75 79 82 86 90 94 102 111



1 Consists of social services, membership organizations, and miscellaneous professional services.

Source: U.S. Bureau of Economic Analysis, Fixed Reproducible Tangible Wealth, 1925-95; and Survey of Current Business, April 2000.

http://www.bea.doc.gov/bea/dn2.htm

Methodology for Net Stocks and Depreciation

The primary measure of the value of fixed reproducible tangible wealth is the net stock, that is, the value of the stock adjusted for depreciation. Depreciation is the decline in value due to wear and tear, obsolescence, accidental damage, and aging. For business and government, in addition to its use in calculating net stocks, the same depreciationconsumption of fixed capitalis presented as part of the NIPA's. Consumption of fixed capital is a charge for the using up of fixed capital, and as such, it is, along with compensation of employees and other components of gross domestic income and gross national income, one of the costs incurred and the profits earned in the production of gross domestic product (GDP) and gross national product (GNP). Consumption of fixed capital is deducted from GDP and GNP to derive net domestic product and net national product. In addition, government consumption of fixed capital is a component of government consumption expenditures (and GDP) as a measure of the value of the services of government fixed assets.

The net stock estimates in this article are presented in terms of two valuationscurrent cost and real cost. Current-cost (or "replacement-cost") valuation expresses all assets in the net stock in terms of the prices that prevailed in the period to which the stock estimates refer. For example, the yearend 1995 net stock estimate in current-cost valuation shows the assets that were in the stock at yearend 1995 expressed at the market prices prevailing for those assets at yearend 1995. The real-cost estimates are expressed either as quantity indexes or in "real" dollars, with 1992 as the base period.

Overview of methodology

Estimates of net stock and depreciationunder both the new and old methodologiesare derived using the perpetual inventory method, which is based on the accumulation of investment flows. With this method, both the net stock and depreciation of any given type of asset is a weighted average of past investment in that asset. Specifically, the net stock is calculated as the cumulative value of past gross investment less the cumulative value of past depreciation. The initial calculations are performed in real terms; current-dollar values are estimated by reflation.

Calculations of net stocks and depreciation are based on real investment data at the type-of-asset level of detail, which generally is the same level of detail as that presented in NIPA tables 5.7, 5.9, and 5.15, and real consumer purchases of durable goods, which generally is the same level of detail presented in NIPA table 2.7. At this detailed level, real investment in a given type of asset is obtained by dividing current-dollar investment in that type by the price index for new assets of that type, expressed as 1992=100, multiplied by 100. (Real investment for higher levels of detail shown in the NIPA tables is calculated using BEA's chain-type annual-weighted indexes.)

Under the new methodology, most assets are assumed to have depreciation patterns that decline geometrically over time. For a given year, the depreciation charges on existing assets are obtained by multiplying the prior year's charge by one minus the annual depreciation rate. For each type of asset, depreciation is cumulated over all vintages, and net stocks are estimated by subtracting cumulative depreciation from cumulative gross investment.

As is the case for real investment, year-to-year growth rates for both depreciation and net stocks on a real-cost basis for higher level aggregates are then computed using the annual-weighted Fisher index. These rates are chained together to obtain cumulative growth rates, which in turn are used to obtain estimates of levels expressed as indexes (1992=100) and as chained (1992) dollars.

Current-cost estimates (in dollars) are obtained by "reflating" real estimates at the type-of-asset level. Depreciation is reflated to current cost using indexes that reflect average prices of new assets for the year; net stock is reflated to current cost using indexes of prices of new assets for the current yearend. Current-cost aggregates are obtained by directly summing current-cost estimates for the various types of assets. Finally, estimates by type of asset are adjusted for the net value of assets destroyed in wars and natural disasters.

Investment flows

The investment flows in new equipment and structures by type and the transfers of used assets used to implement the perpetual inventory method come from the revised NIPA's. For privately owned assets, investment by type of asset is distributed by industry and by legal form of organization, primarily through the use of data from BEA's benchmark input-output accounts for 1982 and 1987 and from the 1987 and 1992 Economic Censuses. These flows are modified to account for transfers of used assets between sectors of the economy. (Because of the lack of information, transfers of used assets within sectors are not accounted for in the wealth estimates.)

Depreciation patterns and depreciation profiles

In the perpetual inventory method, the pattern of depreciation charges for a given asset is determined by its "depreciation profile." The new methodology for estimating depreciation uses depreciation profiles that reflect a geometric pattern and that replace the previously used profiles, which were based on straight-line depreciation and on assumed patterns of retirements. The depreciation profile for a given type of asset describes the pattern of how, in the absence of inflation, the price of an asset of that type declines as it ages. Although the profile for a given type of asset is assumed to be constant over time, different vintages of a given type of asset may have profiles that differ from those of other vintages of the same type of asset.

The new net stock and depreciation methodology uses depreciation profiles that are based on empirical evidence on used asset prices. Ideally, the profiles for each type of asset should be estimated using prices for used assets in resale markets, but such studies have only been conducted for some types of assets. However, the available studies suggest that, in general, depreciation profiles are more closely approximated by a geometric pattern of price declines than by a straight-line pattern. Consequently, in the revised estimates, the depreciation profiles for most assets were assumed to be strictly geometric, and the appropriate rate of declining-balance depreciation was taken from empirical studies of similar classes of assets. The depreciation rates for specific types of assets were then determined by dividing the appropriate declining-balance rate for each asset by the asset's assumed service life. For autos and for computers and computer peripheral equipment, two classes of assets for which information on used asset prices makes it possible to estimate the underlying depreciation profiles, the actual empirical profiles were used. For computers and peripheral equipment, the profiles were taken from studies by Stephen Oliner. For missiles and nuclear fuel rods, depreciation was estimated using a straight-line pattern and a Winfrey retirement pattern, which is essentially a bell-shaped curve.

The new geometric depreciation rates and the associated declining-balance depreciation rates and service lives used by BEA to derive the new estimates of net stocks and depreciation are shown in table A. Except as previously noted, BEA's depreciation rate equals the declining-balance rate divided by the service life. The rate of declining-balance depreciation is the multiple of the comparable straight-line rate used to calculate the geometric rate of depreciation. For example, a 1.65 declining-balance depreciation rate refers to a geometric rate of depreciation of 1.65/L, where L is the service life of the asset in years and 1/L is the straight-line rate. Separate service lives are used for each type of asset and for the estimates of fixed private capital; separate service lives are also used in different industries for certain types of assets. Most of the service lives are held constant over time because the information necessary to estimate changes in them is not available. The lives themselves are based on a wide variety of sources and for most types of assets, are the same as those used for the previously published estimates.



https://allcountries.org/uscensus/888_net_stock_of_fixed_private_capital.html

These tables are based on figures supplied by the United States Census Bureau, U.S. Department of Commerce and are subject to revision by the Census Bureau.

Copyright © 2006 Photius Coutsoukis and Information Technology Associates, all rights reserved.