- The Washington Times - Monday, September 13, 2004

U.S. companies that provide services, such as advertising and software publishing, saw revenue grow in the second quarter of the year, the Census Bureau said yesterday.

The service-sector data is the first new economic indicator from the U.S. Census Bureau in almost 40 years. It measures revenue from companies that produce the bulk of the nation’s output, but had been poorly covered in previous government economic data.

The survey, which is not seasonally adjusted, breaks the service sector into three broad categories.

Information-sector revenue increased 4.4 percent from the first quarter of 2004; professional, scientific, and technical services revenue increased 6.3 percent; and administrative and support and waste management and remediation services revenue increased 5.6 percent.

The information and professional categories saw revenue declines in the first quarter.

Yesterday’s figures cover only the last quarter of 2003 and the first two quarters of this year, so they are not a meaningful measure for companies, policy-makers or economists.

“It’s almost impossible to say anything about this yet,” said Ahmed Haseeb, an economist with Economy.com.

Without more historical information, it is impossible to tell whether ups and downs are tied to typical economic cycles during the year or are part of longer-term economic trends.

Government data had been more focused on traditional industry, such as manufacturers, leaving an unclear picture for service companies that create about 55 percent of U.S. economic output.

“Over time, this [survey] will help fill that gap,” Mr. Haseeb said.

Information services include older technologies, such as book and newspaper publishing, as well as cutting-edge businesses such as wireless telecommunications and software publishing. Revenue in information services was $230.1 billion for the second quarter of the year, the census reported.

Professional, scientific and technical services include accountants, architects, computer system design and advertising. Revenue was $241.6 billion.

Administrative and support and waste management and remediation includes employment services, travel reservations and garbage haulers. Revenue was $121.9 billion.

The bureau plans to expand the survey, now covering about 5,000 companies, over time. Hospitals and nursing homes, for example, will be incorporated beginning next year.

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