How vital are the arts to the economy? Very, new study finds

How vital are the arts to the economy? Very, new study finds

A newly released report from the Bureau of Economic Analysis and the National Endowment for the Arts indicates that the arts remain a vital (and growing) component of the United States economy.

The Arts and Cultural Production Satellite Account (ACPSA) study found that arts and culture accounted for $877.8 billion, or 4.5%, of the nation’s gross domestic product (GDP) in 2017. Across the country, the industry employs 5.1 million workers, who earned a collective total of $405 billion in the data period.

To put the numbers into perspective, the report concluded that the arts added more to the economy than the combined totals of construction ($87 billion) and transportation/warehousing ($265 billion). The study also found that the arts and culture sector grew at twice the rate of the U.S. economy between 2015 and 2017, with online arts-related publishing and streaming seeing a 29% bump.

As venues across the country remained closed during the COVID-19 outbreak, the economic impact on the arts stands to be critical. In 2017, audiences spent $26.5 billion on admissions within the performing arts industry alone. Of that total, theater, musicals and opera represented $17 billion, with other music artists bringing in $3.7 billion. According to a separate report by the Broadway League, the theater industry contributed $12.63 billion to the economy of New York City and accounted for 87,100 jobs in the 2016-2017 season.

“Earned income accounts for a substantial share of the bottom line of most nonprofit arts organizations,” said Sunil Iyengar, director of research and analysis at the Arts Endowment. “During economic downturns, the sector is acutely vulnerable — in terms of earned income, but also in fundraising. Given the lean operating budgets of such organizations, these losses can have an outsized impact, leading to fewer jobs in arts industries and in the businesses that supply them.”

The study determined that performing arts companies; independent arts, writers and performers; and arts-related retail constituted the highest value contribution within the industry.

New York state came in second for the most ACPSCA value added, employment and compensation.

The study, now in its sixth edition, chronicled contributions made in 2017 by tracking the annual economic impact across 35 arts and culture industries, taking into account both commercial and nonprofit operations. For the purpose of the report, ACPSA value added corresponds to “gross output of an industry less its intermediate inputs; the contribution of an industry to gross domestic product.”

The Bureau of Economic Analysis, a government agency in the United States Department of Commerce, also released an interactive map that gives an overview of the impact of the arts and culture industry across the country’s 50 states.