AQUA BOOK 2014 II - Page 9

Value-Added Comparison of Sales and Value-Added, 2013 Sales figures are not the same as value-added, which is the concept for measuring a region’s economic activity or output that involves local resources. A business or industry’s valueadded, part of its gross sales volume, is what enters the region’s Gross Domestic Product (GDP) as a measure of total production with regional resources. While sales figures are common measures of firm size from the business perspective, value-added is a better measure of the contributions of different businesses to the economy. By contrast, some industries, including construction, oil and gas extraction and health care, generate relatively more value-added activity than sales. Those industries are largely labor intensive, so relatively more local resources, particularly the local workforce, are utilized. DIVERSITY AND SP ECI ALIZ ATI ON The accompanying bar chart compares the makeup of industries by GDP with the makeup by sales. As for gross sales, the sector with the most va