Using Analyst’s Input-Output Scenario report you can predict the expected impact of a business loss or gain in your community in terms of jobs, sales, or wages, and how that event would impact other industries regionally. It gives you the ability to “shock” an economy and measure the impacts.
It also gives you the predictive ability to see:
- The effect of a new company locating in the local regional economy,
- The effect of adding jobs to an existing industry sector (such as a major company expansion)
- The effect of losing a company/losing jobs from the local regional economy
For example, if we wanted to understand the impact of an animal feed mill’s in rural Ontario. We would go through the following steps to get the information that will help us understand the impacts.
First Step: choose a region
Defining the region depends on the analysis/question you are trying to answer but should reflect the economic flows of goods and services; an example could be the commuting flow of residents to and from their place of work.
In this example we will create an economic region based on the commuter shed of the employees of the animal feed mill, which we assume is an average of 20 minutes.
Second Step: define the industries that will be impacted
Questions addressed to the model must be fairly narrowly defined. For example, what will be the regional economic response to a change (either increase or decrease) in the output of a particular regional industry? The user will need to enter specific changes affecting each industry.
Becasue of this the Input-Output Scenario report prompts users to select industries at a 4 digit North American Industry Classification System (NAICS) level (see NAICS Directory for further information on defining NAICS codes.
In this example we will chose the NAICS code associated with animal food manufacturing: 3111.
Final Step: choose the correct metric (jobs, wages, or sales).
For instance, the build phase may be best measured in “sales” because the overall investment will be accounted for as purchases of services. Moreover, the online phase may be best measured in “jobs” because they will be permanently located at the facility and the company may specifically know its hiring targets.
In this example let’s assume the feed mill employ 20 at this location.
Check out the video below on How to Run an Input-Output Scenario:
Read our previous two blog posts to get a better sense of this new tool in Analyst: