Wednesday, July 27, 2011
Yesterday, I did a simple rough calculation about General Motors to try to get at how much manufacturing job loss one could attribute to foreign competition versus automation and productivity increases. Various commenters objected that my assumptions were too simplistic, particularly in neglecting the domestic content in foreign autos and the importance of shifts in the supply chain over time.
To try to address these concerns, I'm going to repeat the exercise using national statistics for the components of GDP and employment by industry. The GDP statistics are supposed to keep track of the value-added via supply chains and correctly account for foreign versus domestic components of production. For time reasons I'm going to have to spread this out over a couple of posts. Today, I look at autos as a fraction of GDP from 1967 to 2010. In particular from BEA Table 1.5.5 I took the total US GDP and also US consumption of "Motor Vehicles and Parts". Then from Table 4.2.5 I took imports and exports of "Automotive vehicles, engines, and parts" which I can also divide by US GDP. Then, by adding the exports to the consumption and subtracting the imports, I can get an estimate of domestic manufacture.
All of these are shown in this graph:
You can see the rise in imports from much less than 1% in the 1960s to about 2% of US GDP in the mid 2000s (until the great recession hit). The other interesting factor is that consumption of autos (as a fraction of the economy) started a serious decline in the early 2000s. That's going to complicate the analysis which I will take up again in the next post.
But it seems an interesting observation in its own right - the triple combination of the early 2000s recession, the oil shock of the mid 2000s, and then the great recession, have combined to lower the share of auto consumption in the US economy by about a third over the last decade.