US Out of Home Revenues accelerate but trail GDP

This week’s announcement of 4.7% growth in US out of home revenues during 2Q 2018 was good news.  It was the highest quarterly US out of home growth in two years and represented the 33rd consecutive quarter of US out of home revenue growth.  US out of home revenues, however, are not growing as fast as the US economy.  Here’s the data for the past 10 quarters.

  • US out of home revenues grew 4.7% during the second quarter of 2018 versus 7.4% growth in US nominal GDP.
  • US out of home revenues have been growing about half as fast as US nominal GDP since 2016

Insider compares US out of home revenues (reported on a nominal or pre-inflation basis) with US Nominal GDP (which is also on a nominal or pre-inflation)  This is important in order to provide an apples to apples comparison of out of home revenues and the US economy.

The GDP figure used by most economic commentators is real GDP with is GDP growth after subtracting growth caused by inflation. If you compare US out of home revenues with real GDP you are providing a false impression of how fast US out of home is growing versus the US economy because you are including inflation related growth in out of home revenues but not in the GDP.

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2 Comments

  1. Wouldn’t Real GDP growth be a better benchmark than Nominal GDP growth? OOH revenue growth captures the impact of inflation by way of rate increases, which include inflation. Nominal GDP growth misses the inflation market so this is somewhat apples/oranges.

  2. billboardinsider

    Thanks for the email. To compare apples to apples you have to compare real figure to real figures or nominal figures to nominal figures.

    The out of home figures are nominal revenues. They are total industry revenues including inflation.

    Real GDP consists of the change in GDP in any period excluding inflation.

    Nominal GDP is not adjusted for inflation so if you want an apples to apples comparison you need to compare nominal GDP to the out of home OAAA revenue figures.