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At the BEA Advisory Committee meeting today, Tom Howells (National Economic Accounts) indicated that Congress provided FY2023 appropriations to BEA to construct a new supply chain statistics unit. BEA's proposal OK'd by Congress [p. 28 of https://www.commerce.gov/sites/default/files/2022-03/FY2023-BEA-Congressional-Budget-Submission.pdf]:

New Data to Track American Competitiveness in Global Supply Chains (+$5,221,000, 11 FTE/15 Positions) - The global economy is becoming increasingly interconnected as more and more businesses leverage highly complex and global networks to produce and distribute their products and other services around the world. U.S. businesses and consumers are reliant on the resiliency of these complex global supply chains to deliver the goods and services that they need. As the Administration and the Congress evaluate economic and regulatory policies to promote economic growth and higher-wage jobs at home while aiming to mitigate supply chain risks, it is increasingly important to understand the role of U.S. businesses in global supply chains.
 
To meet this need, this initiative will enable BEA to establish a Global Supply and Value Chain Unit that will develop analytical tools and industry data and analysis that track and describe the composition of products sold both domestically and abroad; capture the share of those sales accounted for by American firms, and provide a clear picture of the makeup of the supply chains delivering goods and services to U.S. businesses and consumers—including how U.S. businesses rely on each other and on foreign suppliers to produce their output while mapping an understanding of these supply chains across the United States and the rest of the word. These tools will complement efforts of the International Trade Administration to address international supply chain imbalances in both manufacturing and service industries. The Global Supply and Value Chain unit will also assess supply-chain vulnerabilities for key information-technology and knowledge-intensive industries, such as the semiconductor and pharmaceutical industries, while addressing supply chain resilience across the U.S. economy. Finally, this initiative will also provide expanded detail on cross-border flows of digital content; show how domestic goods and services production, international trade in goods and services, and the delivery of goods and services through commercial presence abroad contribute to the operation of complex supply chains and support highpaying U.S. jobs.
  
In the context of the new unit, Tom Howells and Paul Farello (International Economic Accounts) described the current status of global supply chains data development, laid out options for future work, and invite feedback on those options.

1) Options presented by Howells:
a) Increased Timeliness:
• Accelerate production of quarterly Gross Output by Industry statistics to be released concurrently with the second estimate of GDP
  – Release at 60 days after the end of the reference period (versus current 90 days)
  – A prerequisite for a similar acceleration of GDP by Industry statistics
• Begin publication of quarterly supply-use tables
  – Unpublished tables used in production of GDP by industry statistics
  – Additional resources needed for methodology and system improvements and regular prerelease review
  – Foundation for quarterly TiVA statistic
 
 b) Increased Granularity:
• Expanded industry detail
  – Expand annual 140-industry tables to include full suite of input-output products
  – Produce annual 400-industry input-output products (including TiVA)
  – New 400-industry tables set stage for possibility of GDP by industry statistics at this level of detail
• Expanded country detail
  – Expand TiVA statistics beyond the seven regions currently covered (Canada, China, Europe, Japan, Mexico, Rest of Asia and Pacific, Rest of World)
  – Looking for feedback on where to expand…
 
c) Special Projects:
• Integrate the supply-use framework with the industry level production account (ILPA)
  – Decomposition of value added into capital and labor services
  – Decomposition of capital services by type of asset
• Constant-dollar supply-use tables
  – Provides a foundation for real TiVA statistics
• Hybrid TiVA model
  – Expand regional SUT beyond US and Canada
  – Incorporate data from OECD-WTO TiVA database
• Begin producing separate prices for imported intermediate inputs and domestically produced intermediate inputs

2) Options presented by Farello:
a) Potential priorities targeted for 2023
• Publish “Profile of Services Traders” annually
-- Expanded detail by industry
-- By end of calendar year
• Publish improved statistics on employment of newly acquired foreign-owned firms by state
-- Use link with BLS QCEW data to allocate employment to states more accurately
-- July
• Develop statistics on direct investment by ultimate host economy
-- Identifies where U.S. MNE investment abroad ends up rather than the first country in the foreign ownership chain
-- Scoping paper and October ACM presentation in 2023 followed by additional research in 2024
 
b) Potential priorities targeted for 2024 and beyond
• Digital trade in goods and services -- Digitally ordered, digitally delivered, digital intermediary platforms
• Trade in services by industry -- Expand statistics to cover the full value of services by product in BEA’s international transactions accounts
• Manufacturing services -- Removes goods sent abroad for processing without change in ownership from trade in goods; adds processing fees to trade in services
• Annual publication of employment by foreign-owned firms in the US by occupation at the county level -- Joint release with BLS
• Expand direct investment by country and industry statistics to include U.S.-headquartered dimension -- Identify U.S. parent companies that are ultimately U.S.-owned and those that are ultimately foreign-owned
• Publish periodic “Supply Chain Spotlights” in the Survey of Current Business -- Identify potential topic areas and data needs by end of 2023; Conduct analysis and develop prototype content early 2024; Determine frequency and begin publication 2024-2025
• Accelerate release of statistics on activities of multinational enterprises -- Feasibility study in 2024; implement in 2025
• Research to exploit new links between BEA surveys and Census surveys -- Research potential data products in 2024; publish in 2025

Tom Howells, Global Supply Chains: New Resources and the Path Forward https://www.bea.gov/system/files/2023-05/Howells.pdf
Paul Farello, Global Supply Chains: Potential Priorities for International Economic Statistics https://www.bea.gov/system/files/2023-05/Farello.pdf
 
Discussant: Jeff Werling, formerly of CBO https://www.bea.gov/system/files/2023-05/Werling.pdf
 
Contact:
Tom Howells thomas.howells@bea.gov
Paul Farello Paul.Farello@bea.gov

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