When it Comes to Services vs. Manufacturing, Words Matter

IMF Blog, February 16, 2021

Source details

Textual analysis across IMF country reports from 1978 to 2019.
Vocabulary: 113 distinct terms related to growth theory and policy (examples include “infrastructure” and “liberalization”).
Computation: relative weights of each term across countries and years.

“Services” is the single most-used term among the 113 terms analyzed.
Across all countries and years, “services” comprises about 20 percent of the occurrences of all terms.
Tourism receives particularly high attention within services.
Term frequency ranking (summary):
- “Services” — most frequent.
- “Agriculture” and “agricultural” — second most frequent.
- “Industry” and “industrial” — next most frequent.
- “Manufacturing” — appears only 2 to 5 percent of the time, depending on the income group (5 percent for advanced economies).
“Manufacturing” appears less often than terms such as “institutions,” “privatization,” and “infrastructure.”
The predominance of services in IMF reports has persisted for more than four decades and is consistent across income groups, including periods when manufacturing accounted for a much larger share of production and employment in many countries.

COVID-19 impact:
- COVID-19 has dealt a heavy blow to the service sector, especially tourism.
- Many companies have adapted by taking their services online.
With the shift to digital, the service sector is expected to play an increasingly vital role in many countries’ economic growth post-COVID-19.
For the foreseeable future, services are likely to remain a central topic in IMF reporting and economic discourse.

IMF Blog — When it Comes to Services vs. Manufacturing, Words Matter; Reda Cherif and Fuad Hasanov; February 16, 2021.