BEA's surveys of international services - Bureau of Economic Analysis

Business Economics, April, 1998 by Robert P. Parker, C. Brian Grove

In recent years, the Bureau of Economic Analysis (BEA) has greatly improved the source data used to prepare the estimates of U. S. international transactions in private services. These transactions are an increasingly important and rapidly growing area of economic activity. As shown in Table 1, from 1986 to 1996, U.S. exports of private services have increased from $77.2 billion to $221.2 billion, or an average of 11.1 percent a year. U.S. imports of private services have increased from $66.4 billion to $143.1 billion, or an average of 8.0 percent a year.

Table 1

U.S. Trade in Private Services, 1986-96

(Billions of dollars or average annual percent change)

                                 Exports              Imports
                           1986    1996     %    1986    1996     %
                                          Chg.                  Chg.

Total                      77.2   221.2   11.1   66.4   143.1    8.0
Travel                     20.4    69.9   13.1   25.9    48.7    6.5
Passenger fares             5.6    20.6   13.9    6.5    15.8    9.3
Other transportation       15.8    27.2    5.6   17.8    28.5    4.8
Royalties & license fees    8.1    30.0   14.0    1.4     7.3   18.0
Other private services     27.3    73.6   10.4   14.8    42.8   11.2

Many of BEA's improvements to the data on private services date from the mid-1980s, when the legislation under which data on international investment had been collected - the International Investment Survey Act of 1976 - was amended to authorize the collection of data on trade in services and in the process was redesignated as the International Investment and Trade in Services Survey Act.

The improvements have taken multiple forms: Surveys that had been voluntary became mandatory; survey coverage of financial services and other business, professional, and technical services was improved through the institution of new surveys; data collected by other government agencies or by trade associations were used to develop or to improve the estimates of several services, such as travel, educational, and medical services; definitions were revised to conform more closely to international guidelines; and estimating methodologies were developed to provide estimates of trade in services on a monthly basis.

In addition to these improvements in data on cross-border services transactions, BEA also developed new information on services delivered to U.S. and foreign markets through locally established affiliates. Many of the improvements have been possible due to new or improved surveys of transactions with "unaffiliated foreigners," i.e., with foreigners that neither own nor are owned by the U.S. party to the transaction.(1)

To provide more detailed information on these surveys, BEA has just published U.S. International Transactions in Private Services: A Guide to the Surveys Conducted by the Bureau of Economic Analysis, a comprehensive methodology that presents information on all eleven surveys. The Guide presents general information about the classification, definitions, and release schedules of all of the surveys. It also provides details for each survey on the transactions covered, the frequency of the surveys, the numbers of respondents, and the methods that BEA uses to prepare the estimates.

The Guide presents information about each survey in three sections: (1) surveys of selected services, (2) specialized surveys of services, and (3) surveys of transportation services. BEA conducts two surveys of selected services - a benchmark survey (essentially a census) and an annual sample survey - that cover mainly business, professional, and technical services, such as advertising, computer-related services, information services, legal services, telecommunications services, and management, consulting, and public relations services. The initial survey of selected services transactions, which was conducted for the year 1986, represented the first major improvement to BEA's data on international services under the new legislation. The initial survey covered eighteen types of services. As BEA has become aware of additional services that have become important in international trade, the coverage of the selected services surveys has been expanded. The latest benchmark survey, for 1996, collected data on thirty-two services, twenty-eight of which are also covered by the annual sample survey.

BEA conducts several specialized surveys that cover each of the following services: (1) construction, engineering, architectural, and mining services; (2) reinsurance and other insurance transactions; (3) financial services; and (4) royalties, license fees, and other receipts and payments for intangible rights, such as patents, copyrights, and trademarks. Among these services, survey coverage was most recently added for financial services. The first benchmark survey of the transactions in financial services was conducted for 1994, and an annual sample survey has since been conducted. Before these surveys were instituted, the financial services in the U.S. international accounts were covered through the use of indirect estimates prepared by BEA.