U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov

Macro-Industrial Working Group 1: Preliminary 

macroeconomic results

For

Macro-Industrial Working Group

December 3, 2015 | Washington, DC

By

Kay Smith, Macro Team Leader, Elizabeth Sendich, Russ Tarver, and Vipin Arora

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Macro Team’s AEO2016 Briefing Plans

• Review incorporation of completed AEO macroeconomic initiatives

– Revised commercial floorspace model using indices rather than levels so that EIA customers 

won’t have to incur extra data costs to compensate Dodge 

– Enhancements of the industrial output model to incorporate additional detail of chemical, 

glass, and paper industries. 

– The extension of the supply matrices allowing for changing patterns of industries meeting 

final demands throughout the projection period. 

• Highlight upcoming initiatives

– This year’s forecast on industry linkages through network analysis will inform future work on 

analyzing supply matrices

– We plan on incorporating detailed industrial price movements which will come from the 

industrial model into the macro model’s incorporation of industrial wholesale prices.

• Short Description of Proposed Reference Case

Macro Analysis Team, MIWG1, December 3, 2015 DO NOT CITE OR DISTRIBUTE 2
Headline macro results

3 Macro Analysis Team, MIWG1, December 3, 2015 DO NOT CITE OR DISTRIBUTE
AEO2016’s GDP growth lower than last year’s projection, due to trade 

and productivity differences

• Real GDP growth is 2.3% from 2014 to 2040, lower than AEO2015’s 2.4% growth as productivity 

and export growth is 0.2% lower and 0.6%, respectively compared to AEO2015.

– Foreign GDP growth of major trading partners and emerging countries is lower with emerging countries showing the largest 

downward revision in growth. The U.S. dollar appreciates early and then depreciates removing most of the dollar’s impact on 

trade. 

– Interest rates are lower as aggregate demand and supply shifted downwards with lower productivity gains. Commodity prices are 

also lower, contributing to lower emerging country growth prospects. Motor vehicle consumption and exports still show stronger 

growth compared to AEO2015, with capital goods (both investment and exports) shifting to lower expected growth. Consumption 

and income growth mirror the GDP growth, showing 0.1% lower growth in the upcoming projection. 

– Growth in consumer prices are slightly higher 

• The next 30 years will probably not be similar to the last 30 years. We expect slower GDP, 

disposable income and labor force growth, and higher export growth compared to the last 30 

years. Projected productivity growth is 1.7 percent, about 0.3 percentage points lower than the 

previous 2.0% 30-year growth.

• Growth in productivity, population, and labor force explains most of long-run GDP growth.

4 Macro Analysis Team, MIWG1, December 3, 2015 DO NOT CITE OR DISTRIBUTE
Preliminary AEO2016 macroeconomic Reference Case shows slower 

growth compared to history

Source: AEO2016 preliminary runs

5 Macro Analysis Team, MIWG1, December 3, 2015

Previous 30 Year Growth Forecasted 26 Year Growth

Real GDP 2.6% 2.3%

Consumption 2.9% 2.4%

Investment 2.9% 2.9%

Government 1.6% 0.9%

Exports 5.9% 4.4%

Imports 5.4% 3.9%

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AEO2016 projects slower growth due to trade and productivity

Source: AEO2016 preliminary runs

6 Macro Analysis Team, MIWG1, December 3, 2015

AEO2015 AEO2016

Real GDP 2.4% 2.3%

Consumption 2.4% 2.3%

Investment 2.9% 2.9%

Government 0.9% 0.9%

Exports 5.1% 4.4%

Imports 4.8% 3.9%

Real GDP: major trading partners 1.9% 1.8%

Real GDP: other trading partners 3.8% 3.5%

Output per hour in nonfarm business 2.0% 1.7%

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average annual growth rate within period

GDP* led by trade and investment early, more even in the later half of 

the projection

Source: AEO2016 preliminary runs; *all components given are real

7 Macro Analysis Team, MIWG1, December 3, 2015

2.5% 2.5%

2.2%

2.9%

2.6% 2.3%

5.4%

4.3%

3.7%

4.5% 4.7%

4.2%

2.1%

0.6%

1.1%

2.1%

3.8%

2.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1995-2010 2014-2025 2025-2040

GDP consumption

imports

exports

government

investment

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-6%

-4%

-2%

0%

2%

4%

6%

2013-

2040

2013-

2020

2020-

2025

2025-

2030

2030-

2035

2035-

2040

difference between real export and import

average annual growth rate within period

Net export growth led initially by industrial supplies, with later growth 

coming from capital and consumer goods

Source: AEO2016 preliminary runs

8 Macro Analysis Team, MIWG1, December 3, 2015

all goods

industrial supplies

capital goods

consumer goods

services

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annual growth rate

Long-run Growth has been declining slightly over past several AEO 

forecasts

Source: AEO2016 preliminary runs

9 Macro Analysis Team, MIWG1, December 3, 2015

2.4%

0.5%

1.9%

2.4%

0.7%

2.0%

2.3%

0.7%

1.7%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Real GDP Labor Force Output per Hour in Nonfarm

Business

AEO2016

AEO2015 .

AEO2014 .

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Comparisons with other Projections

• More similarity in long run growth across projections compared to short run 

forecasts

• Relatively fewer long-run growth comparisons available

• The administration and CBO forecasts are updated twice yearly, the OASDI 

forecast is updated annually, and other forecasts update their long run 

projections quarterly

Macro Analysis Team, MIWG1, December 3, 2015 DO NOT CITE OR DISTRIBUTE 10
annual percent change

Real GDP forecasts

Source: AEO2016 preliminary runs, various listed

11 Macro Analysis Team, MIWG1, December 3, 2015

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2012 2016 2020 2024 2028 2032 2036 2040

AEO2015 AEO2016

CBO August 2015 Global Insight August 2015

Oxford October 2015 OASDI Aug. 2015

OMB July 2015

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millions of units 2014 = 1.0

Macro Analysis Team, MIWG1, December 3, 2015

Proposed Reference Case projections that other NEMS models use

Source: AEO2016 preliminary runs

12

0.0

0.5

1.0

1.5

2.0

2.5

total housing starts

single family

multi family

mobile homes

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Sales of new light duty 

Population aged 16 and over

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utility bond interest rate

percent

wholesale machinery and equipment price index

1982 = 1.0

Macro Analysis Team, MIWG1, December 3, 2015

Most energy supply NEMS modules use interest rates, population and 

disposable income

Source: AEO2016 preliminary runs

13

2

4

6

8

10

12

14

16

AEO2016

AEO2015

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

AEO2016

AEO2015

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Detailed Industrial Output results

14 Macro Analysis Team, MIWG1, December 3, 2015 DO NOT CITE OR DISTRIBUTE
Further details of Industrial Output model changes for 

AEO2016

• Historical data updates

– physical-to-dollar values

– sources

• Dynamic IO extended through forecast

• Improved methodology from IHS in response to our request

• A new view of the economy (macro review already presented)

Macro Analysis Team, MIWG1, December 3, 2015 DO NOT CITE OR DISTRIBUTE 15
0

0.5

1

1.5

2

2.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed nonmetallic minerals shipments

1992 = 1.0

Nonmetallic minerals (NAICS 327) growth driven primarily by 

building material demand and consumption

Source: IHS, AEO2015, AEO2016 preliminary runs

16 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015 IHS2015

minor historical revisions

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0

0.5

1

1.5

2

2.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed primary metals shipments

1992 = 1.0

Primary metals (NAICS 331) grow slower in mid-term due to 

increasing prices, grow long-term because of durables demand

Source: IHS, AEO2015, AEO2016 preliminary runs

17 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

historical revisions IHS2015

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0

0.5

1

1.5

2

2.5

3

3.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed metal-based durables shipments

1992 = 1.0

Metal-based durables (NAICS 332-6) driven by U.S. consumers and 

exports but mildly affected by long-term price increases

Source: IHS, AEO2015, AEO2016 preliminary runs

18 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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0

0.5

1

1.5

2

2.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed bulk chemicals shipments

1992 = 1.0

Bulk chemicals (NAICS 3251-3) benefit from feedstock price spread 

and strong mid-term export growth

Source: IHS, AEO2015, AEO2016 preliminary runs

19 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015 IHS2015 minor historical revisions

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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed pulp and paper shipments

1992 = 1.0

Pulp and paper* (NAICS 322) flat, growing demand for packaging and 

consumer products matched by strong competition

Source: IHS, AEO2015, AEO2016 preliminary runs; *disaggregation was done so this is now the sum of 3 sub-industries

20 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016 AEO2015

IHS2015

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15

17

19

21

23

25

27

29

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

million persons

Total industrial employment is higher in AEO2016 driven primarily by 

reduced productivity path

Source: IHS, AEO2015, AEO2016 preliminary runs

21 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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For more information

Kay Smith | 6-1132 | kay.smith@eia.gov

Elizabeth Sendich | 6-7145 | elizabeth.sendich@eia.gov

Macro Analysis Team, MIWG1, December 3, 2015 DO NOT CITE OR DISTRIBUTE 22
Appendix

23 Macro Analysis Team, MIWG1, December 3, 2015 DO NOT CITE OR DISTRIBUTE
0

0.5

1

1.5

2

2.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed shipments

1992 = 1.0

Total industrial output* is above the last AEO but below this year’s 

IHS baseline

Source: IHS, AEO2015, AEO2016 preliminary runs; *includes agriculture (NAICS 11), construction (NAICS 23), mining (NAICS 21), and 

manufacturing (NAICS 33-31)

24 Macro Analysis Team, MIWG1, December 3, 2015

2014-40

CAGRs

1.93%

1.95%

1.88%

1.79%

IHS2016

AEO2016

AEO2015

IHS2015

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0

0.5

1

1.5

2

2.5

3

3.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed shipments

1992 = 1.0

Service sector (NAICS 42-92) is nearly 83% of the economy so 

reductions in output have a large effect on total output

Source: IHS, AEO2015, AEO2016 preliminary runs

25 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016 AEO2015

IHS2015

historical revisions as well

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0

1

2

3

4

5

6

7

2005 2010 2015 2020 2025 2030 2035 2040

indexed price

1982 = 1.0

EIA energy prices differ from IHS

Source: IHS, AEO2015, AEO2016 preliminary runs

26 Macro Analysis Team, MIWG1, December 3, 2015

NG

electricity

crude

EIA IHS

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0

20

40

60

80

100

120

50

100

150

200

250

300

350

400

450

500

2005 2010 2015 2020 2025 2030 2035 2040

naphtha price

cents/gallon

ethane price

cents/gallon

Energy feedstock prices diverge

Source: IHS, AEO2015, AEO2016 preliminary runs

27 Macro Analysis Team, MIWG1, December 3, 2015

EIA IHS

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1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2005 2010 2015 2020 2025 2030 2035 2040

indexed price

1982 = 1.0

Commodity prices also important to industrial producers, as consumers 

and for competitiveness

Source: IHS, AEO2015, AEO2016 preliminary runs

28 Macro Analysis Team, MIWG1, December 3, 2015

metals

MBD

EIA paper IHS

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0

0.5

1

1.5

2

2.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed construction output

1992 = 1.0

Construction (NAICS 23) includes growth in infrastructure, 

commercial buildings, and homes

Source: IHS, AEO2015, AEO2016 preliminary runs

29 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015 IHS2015

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0.5

0.7

0.9

1.1

1.3

1.5

1.7

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed agriculture shipments

1992 = 1.0

Agriculture (NAICS 11)

Source: IHS, AEO2015, AEO2016 preliminary runs

30 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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0

0.5

1

1.5

2

2.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed iron and steel shipments

1992 = 1.0

Iron and steel (NAICS 3311-2)

Source: IHS, AEO2015, AEO2016 preliminary runs

31 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed aluminum shipments

1992 = 1.0

Aluminum (NAICS 3313)

Source: IHS, AEO2015, AEO2016 preliminary runs

32 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed cement shipments

1992 = 1.0

Cement (NAICS 32731)

Source: IHS, AEO2015, AEO2016 preliminary runs

33 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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0

0.5

1

1.5

2

2.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed glass shipments

1992 = 1.0

Glass (NAICS 3272)

Source: IHS, AEO2015, AEO2016 preliminary runs

34 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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0

0.5

1

1.5

2

2.5

3

3.5

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed organic chemicals shipments

1992 = 1.0

Organic chemicals (NAICS 32511,9)

Source: IHS, AEO2015, AEO2016 preliminary runs

35 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed agricultural chemicals shipments

1992 = 1.0

Agricultural chemicals (NAICS 3253)

Source: IHS, AEO2015, AEO2016 preliminary runs

36 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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0

0.5

1

1.5

2

2.5

3

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

indexed other chemicals shipments

1992 = 1.0

Other chemicals (NAICS 3254-9)

Source: IHS, AEO2015, AEO2016 preliminary runs

37 Macro Analysis Team, MIWG1, December 3, 2015

IHS2016

AEO2016

AEO2015

IHS2015

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