BEA Benchmark & The New 546 Industry Scheme

INTRODUCTION

IMPLAN’s Industry scheme is based largely on the US Bureau of Economic Analysis’s (BEA’s) benchmark. Since every five years the BEA updates their input-output accounts, it means that on those years, IMPLAN data sets also undergo important updates as well.  What does this mean for you? A new 546 IMPLAN Industry Scheme!

Not only will most of the Industry numbers change from our beloved 536 scheme, but there are other changes as well.  Some industries are split into further detail, while a few are being aggregated into less detail.  

BEA BENCHMARK

In late 2018, the BEA released its 2012 industry statistics and benchmark make-use tables (also known as I-O tables) which include methodological improvements to more accurately reflect the ever-changing national economy.  The benchmarks are prepared approximately once every five years based on detailed data from the Census Bureau’s Economic Census. They provide detailed statistics on economic processes and relationships and essential information for other economic accounts. They are used to set the level of GDP in the National Income and Product Accounts (NIPA) and commodity detail on the composition of the final-use categories. In addition, they provide information on what industries use to produce their output and on what commodities are produced by each industry. The benchmark I-O accounts consist of make tables, use tables, and direct and total requirements tables. 

The economy is constantly changing and with new BEA benchmarks come changes to the industrial makeup of the nation. When the BEA releases a new benchmark, IMPLAN follows suit and introduces those new underlying sets of industry production functions. Say goodbye to 536 Industries and hello to 546 Industries!

CENSUS OF AGRICULTURE

Also new with the 2018 data is the inclusion of the new 2017 Census of Agriculture data from the National Agricultural Statistics Service of USDA.  The Census of Agriculture, released every five years, is a complete count of all farms across the U.S. and their operators.  

IMPLAN uses this data in a few ways:

• To estimate proprietor employment as the BEA Benchmark doesn’t provide these employment estimates.  Specifically, IMPLAN takes the BEA REA Farm proprietor employment for the year of the benchmark and distributes it among the 14 IMPLAN farm Industries using proprietor farm count per proprietor farm Industry data from the census of agriculture. These benchmark-year proprietor employment estimates by farm Industry are then combined with the BEA Benchmark output data by farm Industry to calculate output-per-proprietor ratios by farm Industry. 
• To estimate crop production for states not reported in the annual Economic Research Service (ERS) or National Agricultural Statistics Service (NASS) data.  IMPLAN supplements gaps in ERS and NASS state level crop production data with estimates derived from the Census of Agriculture.
• Distribute state level farm Industry production to counties.  IMPLAN does this by distributing state values to counties using the ratio of county physical production to state physical production from the Census of Agriculture. For example, if County A has 10% of the state’s corn sales (or acres if sales is not available, and farms if acreages is not available), then it gets 10% of the state’s Annual Cash Receipts value for corn.

Phew.  Aren’t you glad our economists do the heavy lifting for you?

CHANGES FROM 536 TO 546

There are three cases where two Industries in the 536 Industry scheme are becoming one Industry in the 546 scheme.  This is due to loss of NAICS codes for these Industries. Without a NAICS code for these Industries, there will be no employment or wages data for these Industries in the Bureau of Labor Statistics' annual Census of Employment and Wages data sets; therefore, there will be no other raw data for these Industries going forward.

• Industries 20 (Extraction of natural gas and crude petroleum) and 21 (Extraction of natural gas liquids) in the 536 Industry scheme will now be a single Industries (20).  
• Industries 26 (Lead and zinc ore mining) and 27 (Copper ore mining) in the 536 Industry scheme will now be a single Industry (22).  
• Industries 287 (Pump and pumping equipment manufacturing) and 289 (Measuring and dispensing pump manufacturing) in the 536 scheme will now be a single Industry (285).  

The good news is that there are more instances of further disaggregation from the old 536 scheme into the new 546 scheme.

• Industry 395 (Wholesale trade) will be split into 10 Industries in the new 546 scheme: Industries 392-401.  
• Wholesale - Motor vehicle and motor vehicle parts and supplier
• Wholesale - Professional and commercial equipment and supplies
• Wholesale - Household appliances and electrical and electronic goods
• Wholesale - Machinery, equipment, and supplies
• Wholesale - Other durable goods merchant wholesalers
• Wholesale - Drugs and druggists’ sundries
• Wholesale - Grocery and related product wholesalers
• Wholesale - Petroleum and petroleum products
• Wholesale - Other nondurable goods merchant wholesalers
• Wholesale - Wholesale electronic markets and agents and brokers
• Industry 437 (Insurance carriers) will be split into 2 Industries in the new 546 scheme: Industries 443 and 444.  
• Insurance carriers, except direct life
• Insurance agencies, brokerages, and related activities
• Previous Industry 440 (Real estate) will be split into 2 Industries in the new 546 scheme: Industries 447 and 448.  
• Other real estate
• Tenant-occupied housing
• New State and Local Government institution: Whereas there were 2 State and Local Government institutions in the old 536 scheme, the new 546 scheme will have 3 State and 3 Local Government institutions:  State and Local Government Education, State and Local Government Hospitals and Health Services, and State and Local Government Other Services. As such, previous state government payroll 531 will be split into 2 Industries (Industries 540 and 541) and previous local government payroll 533 will be split into 2 Industries (Industries 543 and 544) in the new 546 scheme.  
• Employment and payroll of state govt, hospitals and health services
• Employment and payroll of state govt, other services
• Employment and payroll of local govt, hospitals and health services
• Employment and payroll of local govt, other services 2

HOW IMPLAN COMPARES TO BEA

You may notice that the new BEA benchmark has only 405 Industries.  However, IMPLAN now has 546. Where do the other 141 Industries come from? Well, there are a few places.

Using input from industry experts, IMPLAN provides production functions for Industries that the BEA has never provided.  Also, IMPLAN uses earlier benchmarks to split the absorption coefficients, byproduct coefficients, and institutional spending into previously-existing detail.  So you may notice a few places where the BEA data is less aggregated than the IMPLAN data.  

COMPARING DATA ACROSS TIME

Sometimes you may want to compare data across time using IMPLAN. However, when there are significant changes to the underlying data, there is no longer an apples to apples comparison. Therefore, you will not be able to compare the 536 scheme with the new 546 scheme with previous projects or Event Templates. You also won't be able to quickly switch back and forth between the 2018 data and previous years due to this change.

In fact, you may see cases where an Industry will seem smaller in 2018 than it was in 2017 even though this is not what the economy really looks like. This is due to the changes in the methodology, Industry scheme, and ratios that are used in IMPLAN.

Do not worry!  IMPLAN has two options to smooth the transition. First, we have a bridge across the schemes that should help in most instances. Second, IMPLAN also has panel data available that allows for a more detailed analysis.  

DOWNLOADS

GOVERNMENT RESOURCES

BEA Input-Output Accounts

USDA Census of Agriculture

Comprehensive Update of Industry Accounts Now Available

Measuring the Nation's Economy: An Industry Perspective | A Primer on BEA's Industry Accounts

1 https://www.bea.gov/sites/default/files/methodologies/industry_primer.pdf#page=5
2 In our legacy desktop software, IMPLAN Pro, there are only 544 Industries. These four Industries in IMPLAN Pro are not split between “hospitals and health services” and “other services.” 

Written August 30, 2023