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SALESINTOANDOUTOFSELECTEDINDUSTRIES REPORT June22,1992 Submittedto: AT&TCAPITALCORPORATION Submittedby: INPUT TheAtriumatGlenpointe 400FrankW.BurrBoulevard Teaneck,NewJersey 07666 201-801-0050 Fax: 201-801-0441 Publishedby INPUT 1280VillaStreet MountainView,CA94041-1194 U.S.A. SalesIntoandOutOfSelectedIndustries PrintedintheUnitedStatesofAmerica. INPUTexercisesitsbesteffortsinpreparationofthe information providedinthis reportandbelievesthe informationcontainedhereintobeaccurate. However, INPUTshallhavenoliabilityforanylossorexpensethat mayresultfromincompletenessorinaccuracyofthe informationprovided. YNAT9*100*1992 BACKGROUNDANDMETHODOLOGY I. A. Background AT&TCapitalCorporationrequestedonJune5,1992thatINPUTsupplyinput- outputdiagramssimilartooneforthegroceryindustrywhichappearsinINPUTs ElectronicCommerceprogram. Theindustriesselectedareshownbelow,along withtheSICnumbersusedtodefinetheindustrygroup. Industrysegment SICNumber 1. Paperincludingforms 26and2761 2. Chemicalsexcludingdrugs 28 3. Drugs 283 4. Electricalequipment 36 5. Computers&officeequipment 357 6. Fabricatedmetalproducts 34 7. Instruments 381,382 8. Rubberandplastics 30 9. Woodcontainers 244 Theseindustriesareallmanufacturinggroupsorsubgroups. AdraftreportwassenttoAT&TonJune15,1992. Thisreportisanexpanded versionofthatdraft; themainmodificationwasaddingestimatesofsalesinthe merchantwholesalesector. YNAT9R 1 INPUT B. Methodology INPUTutilizedwhereverpossibleU.S.DepartmentofCommerceindustrydata. Thegeneralmethodologyisasfollows: The1987nationalinput-outputtableswereusedtoestablishtheoverall ratiosofdollarsinandoutofanindustry. (Note: The"1987"tableswere onlyreleasedinJune1992.) Asnotedinourproposal,INPUTidentifiedindustriesbySICcodesand translatedtheseintothesimilarsetofcodesintheinput-outputtables. Thesenumberswereadjustedaccordingtothemostrecentindustrynumbers asshownintheU.S.IndustrialOutlook,generallyeither1990or1991, dependingontheindustry(giventherecentrecession,yeartoyear differencesarelessimportantthantheymighthavebeeninotherperiods). INPUTmadeafewotheradjustments,mainlyintheComputersection. Therewerefurtheradjustmentsmadeforthesakeofconsistency-the numbersdonotalwaysexactlytieinbetweenthedifferentCommerce Departmentsources,asCommerceitselfnotes. Factoringintheflowsthroughwholesalerspresentedspecialchallenges: Forthepurposesofthisanalysis,theflowsthroughmanufacturer-controlled distributionwasexcluded. Onlytheindependent,so-called"merchant wholesalers"wereincluded. DepartmentofCommerceinput-outputanalysislooksonlyatfinaluse(e.g., byanindustry,governmentorconsumers). "Pass-throughs"arenottracked. OtherDepartmentofCommercesurveystrackthesalesofwholesalersby producttype(producttypesgenerallymapclosetoSICgroups). However, thereisnotrackingofwhichindustrieswholesalerssellto. Forsomeproductflows,e.g.,infood-grocerywholesalers-supermarkets, flowsarefairlyeasilytrackedwithrelativelylittle"leakage"intooroutof otherproducerorwholesalertypes. However,someotherindustryproducinggroups,suchasfabricatedmetal, selltosomanydifferentwholesalertypesundersomanydifferentproduct typesthattrackingbecomesquitecloudy. Forotherwholesalergroups,suchasautoparts,thereistheopposite problem: TheydrawfromanumberofdifferentSICcodes(thereisnoSIC industryproducinggroupfor"autoparts"). Consequently,INPUTsfiguresforthemerchantwholesalerpartofproduct flowsshouldbetakenasorderofmagnitudeestimatesonly. Theseshould still,however,proveusefulinunderstandingoveralltradeflows. YNAT9R 2 INPUT H. SALESINTOANDOUTOFSELECTEDINDUSTRIES Theninediagramsthatfollow(Exhibits1-1to1-9)showtheflowofsalesintoand outofselectedindustrygroups. Thediagramsfollowasimilarformatwhichvaries becauseofthenatureoftheindustryorbecauseofspacereasons. Allsalesshowninthebodyofthediagramarethevaluetotheproducer,i.e.,what theypaidforaninputorwhattheyrealizedasanoutput. Wholesalemarkupsare notincludedforsuchareasas"consumers"; thisapproachmakesthefiguresmore comparable. Thefootnoteformerchantwholesalersestimatesthevalueoftheirsalestotheir customers(generallyanindustryoraretailer). Thediagramsgenerallyaccountforover90%ofthesalesofanindustry(including intra-industryflowsaswellasexports). Thefiguresshownforrubberanddrugs accountforabout80%oftheseflowsandforabouttwo-thirdsofthetradefor fabricatedmetals. Intheselattercases,thediversityofthetrademeantthatthere wereanumberofotherindustrypartnerswhichdidnotmeetthe2%hurdle. INPUTbelievesthatalldiagramsgiveagoodpictureofsignificanttradeflows. Forpaper,chemicalsandelectricalgoodstheintra-industryflowsaresignificant. Theseflowsgenerallyinvolveintermediateproductsbeingexchangedatdifferent levelsofproduction. Theseflowsarenotedinthediagrams. However,INPUT believesthattheseflowswouldhavetobeunderstoodfurtherbeforeactionwas takeninanindustry. YNAT9R 3 INPUT