‹ Analysis & Projections

AEO2014 Early Release Overview

Release Date: December 16, 2013   |  Full Report Release Date: Early Spring 2014   |  correction   |   Report Number: DOE/EIA-0383ER(2014)

Economic growth

Macroeconomic projections in the Annual Energy Outlook (AEO) are trend projections, with no major shocks assumed and with potential growth determined by the economy’s supply capability. Growth in aggregate supply depends on increases in the labor force, growth of capital stocks, and improvements in productivity. Long-term demand growth depends on labor force growth,income growth, and population growth. AEO2014 uses the U.S. Census Bureau’s December 2012 middle population projection. The U.S. Census Bureau revised its population projections primarily to reflect lower assumptions regarding international net migration.

In AEO2014, U.S. population is expected to grow at an annual rate of 0.7% from 2012 to 2040, or 0.2 percentage points lower than the 0.9% average annual population growth rate in AEO2013. As shown in Figure 5, most of the change from AEO2013 to AEO2014 is in the younger age cohorts. Real GDP, labor force, and productivity in AEO2014 grow by average annual rates of 2.4%, 0.6%, and 1.8%, respectively, from 2012 to 2040.

figure data

Total industrial production growth (which includes manufacturing, construction, agriculture, and mining) in AEO2014 is higher than projected in AEO2013, primarily as a result of more rapid growth in manufacturing output, with most of the difference accounted for by machinery, transportation equipment, fabricated metals, and bulk chemicals. Those industries, in addition to being trade-sensitive, supply equipment or raw materials used in oil and gas production or otherwise benefit from lower natural gas prices. In 2040, the manufacturing share of total gross output is 18% in AEO2014, compared with 16% in AEO2013.