Maine's Production Rises Six Percent

MAINE'S PRODUCTION RISES SIX PERCENT

by Carl E. Veazie, Retired Editor, Maine Business Indicators

Although the commonest measure of change in the economy of any state is employment, production figures are also released from time to time. For example, Maine's gross state product jumped from 19.0 billion in 1987 to 20.1 billion constant (1987) dollars in 1992. This represented an overall rise of about 5.9%, in spite of a recession in the latter years.

As shown in Table 1, the state's largest industry groups are manufacturing; finance, insurance, and real estate; and services. During the five-year period between 1987 and 1992, the most rapid growth took place in the production of transportation and utilities, state and local government, and services. Construction and the military registered the biggest declines, followed by manufacturing. (All these figures have been adjusted to eliminate overlapping.)

As Table 1 indicates, manufacturing is still Maine's most significant industry group, although it suffered a 1.8% drop in constant dollars between 1987 and 1992. Table 2 shows the details by industry, which the U.S. Bureau of the Census estimated from returns by individual firms. Unfortunately, the Census Bureau delayed the release of this material until recently. These figures show the value added by manufacture (value of shipments less cost of materials), which have been adjusted to eliminate inter-industry duplication.

As Table 2 shows, the state's primary manufacturing industry is still paper (principally the production of paper and pulp mills), although its value added by manufacture declined since 1987. The next largest industry is transportation equipment (mainly ship- and boat-building), which rose significantly during the five-year period. It was followed by lumber (primarily logging and saw mills) and electric equipment (chiefly electronic components, communications equipment, and electric lighting).

Between 1987 and 1992, increases occurred (after adjustment for price inflation) in value added by manufacture of chemicals (including pharmaceuticals), transportation equipment, primary and fabricated metals, rubber and plastics, textiles (principally broad-woven fabrics of fiber, silks, and wool), lumber, printing, and food (baked goods, meat, dairy, beverages, and seafoods). All other industries fell with respect to constant dollars. The biggest declines were registered by apparel, electric equipment, and leather products.

Wholesale sales in Maine, as tabulated by the U.S. Department of Commerce's Census of Wholesale Trade, reached $6.5 billion in both 1987 and 1992. Nondurable goods accounted for $4.0 billion or 62% of the total in 1992, while durable goods sales represented the balance. Merchant wholesalers sold $5.1 billion in 1992, while manufacturers' sales branches and offices sold $891 million, and agents, brokers, and commission merchants sold $536 million collectively.

Retail sales, according to the Census of Retail Trade, jumped from $8.7 billion in 1987 to $10.3 billion in 1992 -- a rise of some 19% in current dollars or about 6% in constant dollars. As shown in Table 3, the biggest components of retail trade comprise food, automotive, general merchandise, and miscellaneous businesses (among which are nonstore retailers and fuel dealers). Within the five-year period, those stores selling apparel and accessories, drugs and proprietary goods, general merchandise (such as department stores), and miscellaneous businesses, as well as foodstores, and eating and drinking establishments, experienced the most dramatic increases in retail sales. Only automotive dealers and building materials stores had to endure a decline in sales (that is, in current dollars).

Receipts of services in Maine rose from $2.3 billion in 1987 to $3.6 billion in 1992 -- in current dollars, a jump of 55%. By far the biggest business, as shown in Table 4, is health services, followed by business services, engineering and accounting, hotels and other lodgings, and legal services. Health services, business services, engineering and accounting, legal services, amusements, and lodgings registered the fastest increases.

Tourism, represented by eating and drinking places (listed under "retail trade"), hotels and other lodgings and amusement and recreation services (classified under "service industries"), had total sales of $1.5 billion in 1992. This was an increase of 32% in current dollars since 1987, when sales totaled $1.1 billion.

According to the Census of Agriculture, the market value of agricultural products sold in Maine reached $430 million in 1992. This represented a rise of 6.1% in current dollars since 1987, when total sales were $405 million. Crops constituted half of the 1992 total, and livestock products the other half. During the five years, sales of crops (such as potatoes, apples, blueberries) rose 37%, while livestock sales (dairy, eggs) dropped 14% in current dollars.

The Construction Reports (Series C40) of the U.S. Bureau of the Census indicate that new housing units authorized in Maine fell from 9,800 in 1987 to 4,327 in 1992, and only 3,899 in 1994. Concurrently, the total valuation of these units dropped from $584 million in 1987 to $334 million in 1992 and $331 million in 1994.

According to Government Finances (Series GF, No. 5) of the U.S. Bureau of the Census, direct general expenditures by state and local governments in Maine reached $5.2 billion in 1992 -- a jump of 78% in current dollars since 1987, when the total was $2.9 billion. State government expenditures rose faster (91%), while local government outlays increased 63%.

Since many of the various industries listed in this article showed declines because of the last economic recession, let us hope that the results for the 1997 economic censuses (to be released before the end of the century, if we are lucky) will be more positive.

Table 1

GROSS STATE PRODUCT FOR MAINE, 1987-1992

(in Millions of 1987 Dollars)

Industry group
1987
1992
% change
Farms, forestry, and mining 470 493 4.9
Construction 1,264 897 -29.0
Manufacturing 3,879 3,810 -1.8
Transport and utilities 1,462 1,778 21.6
Wholesale trade 1,107 1,163 5.1
Retail trade 2,294 2,483 8.2
Finance, insurance, and real estate 3,213 3,509 9.2
Services 2,929 3,368 15.0
Federal civilian government 568 608 7.0
Federal military government 350 300 -14.3
State and local government 1,487 1,721 15.7
TOTAL 19,023 20,130 0.1
SOURCE: U.S. Dept. Of Commerce, Survey of Current Business (Aug. 1994)

Table 2

VALUE ADDED BY MANUFACTURE IN MAINE, 1987-1992

(in Millions of Current Dollars)

Industry group
1987
1992
% change
Food 348 406 16.7
Textiles 200 236 18.0
Apparel 90 68 -24.4
Lumber 540 584 8.1
Furniture See note 40 na
Paper 1,475 1,390 -5.8
Printing 223 254 13.9
Chemicals 80 150 87.5
Petroleum and coal See note 13 na
Rubber and plastics 176 224 27.3
Leather and products 365 294 -19.5
Stone, clay, and glass See note 72 na
Primary metals 22 28 27.3
Fabricated metals 160 209 30.6
Industrial machinery 259 243 -6.2
Electronic and electric equipment 573 448 -21.8
Transportation equipment 569 752 32.2
Instruments See note 30 na
Miscellaneous manufacturing 35 31 -11.4
TOTAL 5,115 5,472 7.0
SOURCE: U.S. Dept. Of Commerce, Census of Manufactures (1992): Maine, Table 5, released April 1996.
NOTE: Information withheld to avoid disclosure.

Table 3

RETAIL SALES IN MAINE, 1987-1992

(in Millions of Current Dollars)

Industry group
1987
1992
% change
Building materials 680 663 -2.5
General merchandise 817 1,059 29.6
Food stores 1,809 2,327 28.6
Automotive 1,917 1,742 -9.1
Gasoline service stations 552 659 19.4
Apparel and accessories 337 604 79.2
Furniture and home furnishings 296 312 5.4
Eating and drinking 689 864 25.4
Drug and proprietary 256 348 35.9
Miscellaneous 1,298 1,709 31.7
TOTAL 8,651 10,287 18.9
SOURCE: U.S. Dept. Of Commerce, 1992 Census of Retail Trade: Maine, Table 3.

Table 4

RECEIPTS FROM SERVICES IN MAINE, 1987-1992

(in Millions of Current Dollars)

Industry group
1987
1992
% change
Hotels and other lodgings 269 379 40.9
Personal services 118 154 30.5
Business services 276 456 65.2
Auto repair, service, parking 205 281 37.1
Miscellaneous repair 87 112 28.7
Amusements and recreation 142 208 46.5
Health services 668 1,177 76.2
Legal services 234 344 47.0
Engineering, accounting, research 269 403 49.8
Others 52 82 57.7
Total (subject to federal income tax) 2,320 3,596 55.0
SOURCE: U.S. Dept. Of Commerce, 1992 Census of Service Industries: Maine, Table 3a.