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Services and Goods Sectors Both Strong Despite Slowdown in 2005
Advance Estimates of Gross Domestic Product (GDP) by Industry

In 2005, both the services-producing and goods-producing sectors continued their expansion, although each sector experienced a slowdown from its pace of growth in 2004. Newly-available data on the industry distribution of real GDP growth, released today by the U.S. Bureau of Economic Analysis, showed that the services-producing sector grew 4.1 percent and continued to be led by the information and professional and business services industry groups. The goods-producing sector increased 2.6 percent reflecting growth in manufacturing and construction that more than offset declines in mining and agriculture.

Despite slower growth in 2005, the manufacturing industry group continued to show strong growth, increasing 4.0 percent after increasing 4.8 percent in 2004. Durable-goods manufacturing increased 5.7 percent and continued to lead growth for the goods-producing sector due, in part, to the continued strength of computer and electronic products.

Price growth in both the goods-producing and services-producing sectors accelerated slightly in 2005, and growth was widespread as value-added prices increased in 19 of 22 industry groups. Overall, however, price growth in both sectors remained modest by historical standards.

Strong energy price growth impacted both goods-producing and services-producing industries in 2005. In the goods-producing sector, value-added prices increased 3.4 percent above 3 percent for the third consecutive year partly reflecting continued strong price growth in mining. In addition, manufacturing prices increased for the first time since 1995 due, in part, to accelerations in petroleum-related products. Price growth accelerated to 2.6 percent in the services-producing sector and was led by transportation and warehousing at 5.0 percent.

Other highlights of the advance industry estimates for 2005 include the following:

• Information-communications-technology-producing industries experienced double-digit growth of 11.9 percent in 2005, down slightly from 12.9 percent growth in 2004. Despite comprising just 3.9 percent of current-dollar GDP in 2005, these industries accounted for 12.8 percent of real GDP growth.
• Growth in accommodation and food services accelerated to 4.8 percent in 2005, exceeding its average annual growth of 3.9 percent over the period 1995-2000. For the second consecutive year, professional, scientific, and technical services growth (7.0 percent) exceeded its average annual growth of 6.9 percent over the period 1995-2000.
• The finance, insurance, real estate, rental, and leasing (FIRE) industry group continued to contribute more than any other industry group to real GDP growth 24 percent in 2005. Overall, growth remained steady at 4.1 percent compared with 3.8 percent in 2004. Within FIRE, growth of real estate and rental and leasing slowed to 2.5 percent in 2005, down from 5.6 percent in 2004. This deceleration was more than offset by faster growth in finance and insurance of 6.7 percent in 2005, up from 1.0 percent in 2004.

Additional Information:

• The advance GDP-by-industry estimates are prepared for broad industry groups based on the 1997 North American Industry Classification System and use a methodology developed for summary source data.

BEAs national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEAs Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.