| Issue of the Day Posts Tagged ‘Imports’ |
Manufacturing’s Slip in Contributions to GDP in 2008
Published Friday, May 8th, 2009 by Lacey Loftin
According the Bureau of Economic Analysis, Real GDP (a macroeconomic measure of the size of the economy adjusted for price changes and inflation) decreased 6.1% between January and March of this year. This follows a decrease of 6.3% in fourth quarter 2008. The slightly smaller decrease in GDP reflected the upturn in consumer spending for goods and a larger decrease in imports. These were offset by larger decreases in inventory investment and in nonresidential structures as well as a downturn in federal government spending. Manufacturing saw a decrease in non-durable inventories, as well as non-motor-vehicle merchant wholesale and retail inventories. Given the timing of the passage of American Recovery and Reinvestment Act of 2009 (ARRA) and the Troubled Asset Relief Program (TARP), it is likely that the effect on the GDP was small, if any, for the first 3 months of 2009.
The contribution by Manufacturing to the GDP has increased at a steady pace since 1991 with only a sharp decrease in 2000-2001. The sector did not resume its rise until 2004; from there it increased slower and rockier than before the 2000 dip. By 2006-2007, while not as sharp as the 2000 decrease, manufacturing began to slow and has decreased from $1618.6 in 2007 to $1574.3 billion in 2008.