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SpatialNews.com Press Release
Securities and Commodities Continue Strong Growth, Adding an Average $1.8 Billion of Revenue a Week
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Securities, commodity contracts and other financial investment activities continued to climb at an accelerating rate, reaching $499 billion in 2006, a 23 percent increase from $406 billion in 2005, according to new data released today by the U.S. Census Bureau.
This report, 2006 Service Annual Survey: Securities, Commodity Contracts, and Other Financial Investments Activities and Related Activities, tracks revenue, percent change in revenue and sources of revenue for firms with paid employees that make up the securities section of the financial industry.
“The financial investment subsector experienced a $93 billion increase in 2006. This equates to, on average, a gain of $1.8 billion a week,” said Mark Wallace, Chief of the Census Bureau’s Service Sector Statistics Division.
Within the securities and commodities contracts industry group, the largest industry was investment banking and securities dealing, which climbed $45 billion in 2006 to $199 billion, a 29 percent increase from the prior year. The securities brokerage industry increased $25 billion, a 19 percent increase, to $156 billion.
Investment banking and securities dealing are firms primarily engaged in underwriting, originating and/or maintaining markets for issues of securities. Security brokers, on the other hand, act as agents between buyers and sellers in buying or selling securities.
The combination of commodity contracts dealing and brokerage made up the remaining 3 percent of revenue of this industry group.
Commodity contracts dealing is buying and selling commodity contracts or options, such as precious metals, foreign currency, oil or agricultural products, on a spread basis for their own firm. In contrast, a commodity brokerage acts as an agent in buying or selling commodity contracts or options for a commission.
Other financial investment activity, which includes portfolio management and investment advice, increased 18 percent in 2006 to $133 billion. Portfolio management increased 18 percent to $107 billion. Portfolio managers administer the assets of others on a fee or commission basis. They have the authority to make investment decisions and derive fees from the overall size or performance of the portfolio.
Investment advice was up 19 percent to $26 billion. Investment advice firms provide customized advice to clients on a fee basis but do not have authority to execute trades.
This report also includes estimated export revenue, sources of revenue, total expenses and selected expenses (i.e., personnel costs, materials, parts and supplies and purchased services) for employer firms.
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