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Draft 1.1 -- Not for Distribution or Circulation
<br />IMPLAN Leakage Analysis
<br />A more comprehensive leakage analysis is possible using IMPLAN, the Minnesota Input -
<br />Output Model used extensively by economic development agencies nationwide.
<br />IMPLAN corrects, unifies, and fills in gaps (like farmers and self - employed individuals)
<br />in the Economic Census data. It also can model how changes in one industry can lead to
<br />changes in other industries (indirect effects) and changes in personal consumption
<br />(induced effects).
<br />IMPLAN combines the 1,100 NAICS sectors into about 460 model - specific sectors. For
<br />example, multiple wholesale sectors in NAICS are reduced to one wholesale sector in
<br />IMPLAN. It's possible to model local self - reliance by looking at the value of the
<br />Regional Purchasing Coefficient (RPC), which estimates how much of Total Gross
<br />Demand is currently met by local industry. The demand figure includes both local and
<br />nonlocal consumption. Multiplying Total Gross Demand by 1 -RPC shows how much
<br />additional industry is possible to meet local demand (without reducing production for
<br />export).
<br />When IMPLAN is used to study small areas, as is the case in this study, the model has
<br />many zero - activity sectors. To model a self - reliant economy, these sectors — most in
<br />manufacturing — need to be created with a minimum of one worker. "Production
<br />functions" based on national composites of industries are then imported to show the
<br />linkage of new sector's expenditures with other local industries.
<br />Chart 11 shows the total impact of ramping up industry in Cabarrus to go 25% of the way
<br />to meet total existing local demand. Specifically, 25% localization would generate 9.491
<br />new jobs: 5,208 directly, 2,157 indirectly, and 2,127 induced. Note that the estimate of
<br />5,208 direct jobs is close to the 7,073 jobs new predicted with the BALLE calculator.
<br />IMPLAN predicts, moreover, that these new jobs will lead to $397 million more in wages
<br />each year, $676 million in additional annual value -added production, and $59 million in
<br />indirect business taxes.
<br />Chart 11
<br />Economic Impacts of a 25% Shift to Self- Reliance — 2009
<br />(IMPLAN Input- Output Model Summary)
<br />ImpactType Employment Laborincome TotalValueAdded Output Indirect Buz Taxes
<br />Direct Effect
<br />5,2081
<br />$243,860,073
<br />$413,342,572
<br />$1,040,047,295
<br />$29,582,085
<br />Indirect Effect
<br />2,157
<br />$87,198,418
<br />$137,584,322
<br />$241,148,332
<br />$12,093,131
<br />Induced Effect
<br />2,127
<br />$65,957,201
<br />$125,513,746
<br />$199,307,538
<br />$17,503,676
<br />Total Effect
<br />9,491
<br />$397,015,692
<br />$676,440,641
<br />$1,480,503,165
<br />$59,178,892
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