The U.S. Bureau of Economic Analysis (BEA) recently published its updated statistics on the U.S. space economy, offering fresh insights into the sector. The report, released in June 2024, highlights the space economy’s contribution to the U.S. gross domestic product (GDP), private-sector employment, and compensation over the five-year period from 2017 to 2022.
In 2022, the space economy accounted for $131.8 billion, or 0.5% of the total U.S. GDP. This represents a 2.3% increase in real GDP growth, outpacing the broader U.S. economy, which grew by 1.9%. Gross output in the space economy rose to $232.1 billion in 2022, with private-sector compensation reaching $54.5 billion, supporting 347,000 jobs.
While the report offers a comprehensive analysis, data from 2023 is notably absent. This gap stems from the BEA’s practice of focusing on finalized economic data, meaning statistics for 2023 will not be included until all relevant data is collected, verified, and analyzed for future releases. The current report benefits from new data sources and a comprehensive update to the National Economic Accounts in 2023. However, it takes time for these large-scale revisions to filter through, leading to the release of backward-looking data in 2024.
Expanded Industry Breakdown
A significant update in the most recent report is the expanded industry breakdown. The BEA has detailed space economy contributions across 75 industries, a significant increase from the previous 30. This change allows a more nuanced understanding of how the space economy interacts with various sectors. In particular, the new statistics offer valuable data on how inflation and other factors have shaped real and nominal growth in this period.
For example, while real GDP for the space economy grew by 2.3%, current-dollar GDP showed a 6.0% rise. The difference between these figures highlights the impact of inflation, particularly in sectors like wholesale trade, which saw a 7.9% price increase in 2022. Wholesale trade plays a significant role in the space economy, contributing 19% of GDP in 2022.
Industry Growth Drivers
The report identifies several key drivers of growth in the space economy. Federal defense spending grew by 16.2% in 2022, primarily driven by research and development (R&D) activities. Professional, scientific, and technical services also saw a notable rise of 11.7%, further fueled by R&D investments. Government space programs, especially NASA and the U.S. Space Force, supported these gains.
However, not all sectors performed equally. Industries like broadcasting and telecommunications saw a contraction, with the latter shrinking by 3.0%. The decline in direct-to-home satellite television subscribers has negatively impacted this segment. Similarly, the “other transportation equipment” industry, which includes space vehicle manufacturing, experienced volatility with a 7.3% contraction in 2022 after a robust 23.0% growth in 2019.
Economy, 2017–2022 Report
Narrow vs. Broad Definitions of the Space Economy
To address concerns raised by industry stakeholders, the BEA has provided an alternative “narrow” definition of the space economy, which excludes direct-to-home satellite TV, satellite radio, and educational services. This narrower definition shows a more positive growth trajectory. Real value-added growth in the narrow space economy was 3.9% in 2022, compared to 2.3% under the broader definition. This distinction allows analysts to better understand the core space activities driving growth.
Price Trends and Employment
Inflation impacted most space-related industries in 2022, particularly wholesale trade. On the other hand, manufacturing saw price declines between 2017 and 2022, mainly due to falling prices and improved quality in the computer and electronic products industry, which includes essential space-related equipment like satellites and GPS systems.
Regarding employment, the space economy supported 347,000 private-sector jobs in 2022, with manufacturing accounting for the largest share (31.1%). Despite having fewer jobs, the manufacturing sector offered higher compensation, with an average annual salary of $217,296, well above the overall space economy’s average.
Looking Ahead
The BEA’s latest report offers a comprehensive view of the U.S. space economy from 2017 to 2022, but it also points to significant future growth opportunities and potential challenges. As the space economy matures, key sectors such as federal defense and R&D activities will continue to play a pivotal role in driving expansion. Government space programs, especially NASA and the U.S. Space Force, are likely to remain critical growth engines, especially as new space initiatives and defense capabilities are prioritized.
Growth Opportunities
Growth opportunities are abundant in areas like satellite technology, space exploration, and commercial space services. R&D investment in these areas is expected to grow as the demand for more advanced satellite communications, GPS systems, and space-based research intensifies. The professional, scientific, and technical services sectors, which saw double-digit growth, will continue to be at the forefront of innovation. The development of advanced spacecraft, space exploration missions, and the growing importance of space logistics and mining also offer strong growth potential for private enterprises and government partnerships.
Private sector involvement, especially in the manufacturing of satellites and space vehicles, will likely increase as companies like SpaceX, Blue Origin, and others continue to push the boundaries of commercial space operations. Launch services, space tourism, and infrastructure development (like spaceports) will see growing demand as the space economy moves from government-dominated projects to a more commercially driven model. The BEA’s statistics provide valuable insight for space tech companies, investors, and engineers looking to position themselves in this expanding market.
Challenges
The report also outlines several challenges. Price fluctuations, particularly in the wholesale trade and manufacturing sectors, present risks to sustained growth. The space economy is highly sensitive to inflationary pressures, as shown by the price increases for wholesale trade in 2022. This sector, responsible for distributing essential components like GPS transceivers and antennae, is crucial in enabling space activities. Any further price increase could slow growth by making space-related goods and services more expensive, affecting profit margins and investment.
Conversely, declining prices in manufacturing—while beneficial in the short term—could present challenges if they are linked to reduced demand or oversupply. As seen in the contraction of the broadcasting and telecommunications industry, declining subscriber bases for services like direct-to-home satellite television could lead to broader declines in space-related revenues, particularly if alternative technologies begin to outpace satellite services.
Another challenge lies in navigating the volatility of certain industries, such as space vehicle manufacturing, which saw dramatic swings in growth throughout the 2017–2022 period. Ensuring stability in these sectors will be critical for long-term success, especially as competition increases globally with more countries and private companies entering the space race.
Lastly, the broader economy and its performance will continue to impact the space sector. As inflation and economic shifts influence government budgets and private investment, space-related activities might face budgetary pressures, particularly in periods of economic downturn. For companies operating in this sector, staying agile and anticipating these shifts will be key to maintaining growth.
The report’s findings paint a promising picture of the space economy’s future, highlighting both the opportunities for innovation and expansion, as well as the challenges that must be managed for sustained success.
The BEA plans to continue refining its space economy statistics, with an eye on providing state-level estimates and more frequent updates in response to feedback from stakeholders. Additionally, while some private-sector reports focus on specific segments like satellite launches and services, the BEA’s broader industry-level statistics offer a unique view of the space economy’s overall impact.
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