Biggest Economic Drivers Are Most Poised To Come Back
Which sectors are the big drivers of economic output? As we’ve seen in the past, some of the highest profile industries (movie theaters, concerts, professional sports) are actually not all that important to total economic output.
First, by “output” we mean Gross Output, the statistic which takes into account not just GDP (which focuses on the last phase or two of the economic process) but also adds in all the stages before.
When we break that more inclusive number down into various sectors, we can get a rough idea just which sectors are the heavy hitters and which sectors are not.
Finance is a biggie. So is manufacturing and professional business services.
In a separate analysis we’ve shown how rapidly manufacturing is rebounding, but what about the other big ticket items in the list?
Turns out that they are among those whose employees are most able to work from home, and generally among those who have already suffered lower rates of lay-offs than the rest. For example, roughly 80% of finance and information employees can work from home. Roughly 70% of professional services employees can as well.
We’re clearly not out of the woods yet, but if we can focus on the big picture, i.e. not lose the forest for the trees, we can see the case for a substantial share of macro-economic recovery with dark patches at the edges and not the other way around.
U.S. Bureau of Economic Analysis, average annualized global output 2016 – 2019 for the U.S.
“Why Working From Home Shouldn’t Be Taken For Granted,” July 2020, Statista
Originally published on Townhall Finance.
Jerry Bowyer is a Forbes contributor, contributing editor of AffluentInvestor.com, and Senior Fellow in Business Economics at The Center for Cultural Leadership.
Jerry has compiled an impressive record as a leading thinker in finance and economics. He worked as an auditor and a tax consultant with Arthur Anderson, as Vice President of the Beechwood Company which is the family office associated with Federated Investors, and has consulted in various privatization efforts for Allegheny County, Pennsylvania. He founded the influential economic think tank, the Allegheny Institute, and has lectured extensively at universities, businesses and civic groups.
Jerry has been a member of three investment committees, among which is Benchmark Financial, Pittsburgh’s largest financial services firm. Jerry had been a regular commentator on Fox Business News and Fox News. He was formerly a CNBC Contributor, has guest-hosted “The Kudlow Report”, and has written for CNBC.com, National Review Online, and The Wall Street Journal, as well as many other publications. He is the author of The Bush Boom and more recently The Free Market Capitalist’s Survival Guide, published by HarperCollins. Jerry is the President of Bowyer Research.
Jerry consulted extensively with the Bush White House on matters pertaining to the recent economic crisis. He has been quoted in the New York Times, The Wall Street Journal, Forbes Magazine, The International Herald Tribune and various local newspapers. He has been a contributing editor of National Review Online, The New York Sun and Townhall Magazine. Jerry has hosted daily radio and TV programs and was one of the founding members of WQED’s On-Q Friday Roundtable. He has guest-hosted the Bill Bennett radio program as well as radio programs in Chicago, Dallas and Los Angeles.
Jerry is the former host of WorldView, a nationally syndicated Sunday-morning political talk show created on the model of Meet The Press. On WorldView, Jerry interviewed distinguished guests including the Vice President, Treasury Secretary, HUD Secretary, former Secretary of Sate Condoleezza Rice, former Presidential Advisor Carl Rove, former Attorney General Edwin Meese and publisher Steve Forbes.
Jerry has taught social ethics at Ottawa Theological Hall, public policy at Saint Vincent’s College, and guest lectured at Carnegie Mellon’s graduate Heinz School of Public Policy. In 1997 Jerry gave the commencement address at his alma mater, Robert Morris University. He was the youngest speaker in the history of the school, and the school received more requests for transcripts of Jerry’s speech than at any other time in its 120-year history.
Jerry lives in Pennsylvania with his wife, Susan, and the youngest three of their seven children.
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