Aspects of Institutional Demand

Institutional demand for goods and services is final demand - that is, it represents demand from outside the region (exports), demand by households and governments for local final consumption (as opposed to use as an input into the production of another product), investment purchases, and/or net additions to inventory. Institutional demand is estimated nationally and then allocated to states and counties.  

Household Consumption Expenditures
This is also known as Personal Consumption Expenditures (PCE) and consists of expenditures by Households on goods and services used for personal consumption. PCE is the largest component of final demand.

Federal Government Purchases
These purchases are divided between defense, non-defense, and investment. Federal defense expenditures include spending by all agencies in the Department of Defense - this includes uniformed military services and coast guard. Goods and services purchased range from food for troops to missile launchers. Non-defense purchases are made to supply all other Federal government administrative functions. Federal Investment consists of all Federal government demand for capital goods. Payments made to other governmental units are transfers, as opposed to consumption of commodities.

State and Local Government Purchases
These purchases are divided between public education, non-education, and investment. Public education purchases are for pre-school, elementary, high school, and higher education institutions. Non-education purchases are for all other state and local government administration activities. These include state government operations, including police protection and sanitation. Private sector education purchases are not counted here.

Inventory Purchases
Additions to inventory include both finished and unfinished goods. Inventory sales occur when industries sell more than they produce and inventory stocks decrease over the year, whereas inventory purchases occur when industries produce more than they sell and inventory stocks increase. Inventory purchases and sales generally involve goods-producing industries as opposed to service industries. IMPLAN inventory sales and purchases are net values, meaning that for a given commodity and year there will be either inventory sales or inventory purchases, not both.

Capital Expenditures
These are made by private industries and are largely made up of equipment, software, and construction. The dollar values in the IMPLAN database are expenditures made to a specific industrial sector producing the capital equipment. These values do not represent capital investment by that industrial sector. In other words, we only know the investment demand by all private industry. There are no data that show how much a particular industry invested.

Foreign Trade Purchases
Demands made to industries for goods that are exported beyond national borders.

Domestic Trade Purchases
Demands of goods and services produced within the national border but outside of the study area. 

Inter-Institutional Transfers
This is the monetary flow between Institutions.  These flows represent non-industrial transfers of funds such as Household payments of taxes and government payments to households in the form of social security and welfare. There are also transfers between federal and state and local government in the form of grants. 
 

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