BEA's mid-decade strategic plan: a progress report

Survey of Current Business, June, 1996

Finally, BEA has begun work with BLS and with other researchers to develop improved measures of output and prices that incorporate the effects of quality change on computer software, telecommunications equipment, and health services.

Better measures of investment, saving, and wealth

As part of the recent comprehensive revision of the NIPA'S, BEA implemented the following improvements to the measures of investment and saving:

* A more comprehensive and consistent treatment of investment and capital by treating government purchases of structures and equipment symmetrically with the treatment for private purchases; and

* A new methodology for calculating depreciation that improves the empirical basis of the estimates. (Estimates of capital stock that reflect the improved estimates of depreciation will be released later this year.)

Improved coverage of international transactions

BEA has also moved ahead on implementing the following improvements in the coverage of international transactions involving new products and services.

* BEA conducted, and is currently processing and analyzing the results of, its first benchmark survey of international trade in financial services; the results will introduced into the annual revision of the international transaction accounts to be released on June 20, 1996. (See "Looking Ahead" on page 11 of this issue.)

* BEA has redesigned its surveys of U.S. direct investment abroad, thus completing the first phase of the collection of detailed data on the growing volume of international trade in services by U.S. multinational companies with their affiliates outside of the United States.

* With the assistance of the Census Bureau, the Customs Bureau, and the International Trade Commission, the classification system for U.S. foreign imports was revised to provide for separate categories of computer software as a first step in developing estimates of the full market value of imports of computer software.

Future Work Plans

The completion of the strategic plan by the year 2000 will require additional resources. As an initial step, BEA has reallocated resources from existing programs and has requested additional funds in the budget for fiscal year 1997. In 1995, BEA transferred the business cycle indicators (which includes the index of leading indicators) program to a private organization, the Conference Board. In 1996, BEA has scaled back its work in the areas of regional projections, pollution abatement and control expenditures, and foreign direct investment. The regional projections program and the pollution abatement and control program are being phased out, and the preparation of establishment-level data on foreign direct investment, which is a joint BEA-Census Bureau project, will be done on a 5-year cycle rather than on an annual cycle.(3)

BEA is moving to implement more of the improvements proposed in the strategic plan. The highest priority is being given to the following projects, which are grouped by the three major areas of the plan.