Industry Aggregation

INTRODUCTION:

Did you ever wish you could combine two or more IMPLAN Industries together to run an analysis? Ever wanted to model 2 or 3 digit NAICS? Industry Aggregation is the answer.

Industry Aggregation allows you to combine Industries together. You can create your own aggregation scheme, for example if you wanted to examine the supply chain of all manufacturers producing vehicles, vehicle parts, aircrafts, spacecrafts, boats, railway vehicles, and any other form of transportation manufacturing as one combined Industry. You can also work with Projects using pre-built Industry Aggregation schemes based on North American Industry Classification System (NAICS) Codes, either by NAICS Sector (2-digit) or Subsector (3-digit).

Remember when aggregating Industries or Regions, you may encounter Aggregation Bias due to the loss of details.

 

BEFORE GETTING STARTED:

Here are a few things to note before starting work with aggregated Industry schemes. With aggregated schemes, you can model Industry Events, Commodity Events, Labor Income Events, Household Income Events, and Industry Contribution Analysis Events. Spending Pattern Events are not enabled using aggregated schemes.

If you want to use an aggregation scheme, you must start with the aggregation. You cannot aggregate Impacts or Results after the model is built. Also, Regional customization is not allowed in aggregated scheme Projects.

When you aggregate Industries, not only will you create Events using those Industries, but the Results will also be reported in the aggregated scheme. Basically, the aggregation scheme will follow your entire Project. 

While the aggregation happens at the Industry level, Commodities are aggregated on a 1:1 basis with them. When you aggregate Industries, you are also aggregating the associated Commodities.

You will know that you are using an aggregated scheme on the Regions and Impacts screens by looking at the bottom of the screen as shown here.

NAICS AGGREGATION:

IMPLAN has 546 Industries in its more recent Industry scheme which largely corresponds with the North American Industrial Classification System (NAICS) codes. The most detailed NAICS Codes are 6 digits. The fewer the digits (ie 2 digit), the more broad a NAICS Code becomes, including more Industries. IMPLAN Industries vary in the number of NAICS Codes they each include. Most IMPLAN Industries bridge to 3 to 6 digit NAICS Codes. Projects based on 2 or 3 digit NAICS Codes allow you to work with Industries that are broader than IMPLAN’s 546 Industries, as they will include just 22 (2 digit) and 88 (3 digit) Industries respectively. Learn more about the 546 Industries and how they are defined in the Picking an Industry article. In IMPLAN, you can create a Project using a pre-built Industry Aggregation scheme to run your analysis by NAICS Sector (2-digit) or Subsector (3-digit). 

 

QUICK AGGREGATION

To aggregate IMPLAN Industries into either the NAICS Sector (2-digit) or Subsector (3-digit), begin on the Projects screen. Click on NEW PROJECT in the upper right corner of the screen.

Give your New Project a Title and Choose the Aggregation Scheme you wish to use. Next, click CREATE PROJECT.

This will take you to the Regions screen and you can proceed as you normally would. The difference is that in Region Details and on the Impacts and Results screens, the Industries that you see will be those by aggregated NAICS codes, instead of the 546 IMPLAN Industries.

LOOKING AT THE DETAILS IN NAICS AGGREGATION

If you want to look at what Industries are included in the 2 digit or 3 digit NAICS aggregation schemes, follow these steps. 

As always, start on the IMPLAN dashboard. Upon clicking on the avatar icon next to your user profile in the upper right, a call out box will open. Choose Preferences. 

This will take you to the Industry Aggregation screen.

The default in Select Industry Aggregation is 546 Unaggregated (2018). Using the drop down under the heading Select Industry Aggregation, you can choose IMPLAN 2 Digit NAICS 546 (2018) and IMPLAN 3 Digit NAICS 546 (2018) for the current Industry Scheme. You can also choose 2 and 3 digit aggregation for the 536 scheme (2017 and earlier datasets).

In this example, IMPLAN 2 Digit NAICS 546 (2018) was selected. Clicking on VIEW will open up the aggregated scheme.

The screen will then display the aggregated scheme. 

Clicking on one of the down arrows below the NAICS Sector (aggregated name) will open up the description to show what IMPLAN Industries are included. Clicking on the NAICS Sector again will close the details.

To return to the Preferences screen, click Close. 

 

CREATING A PROJECT FROM PREFERENCES

You can also start a New Project using a aggregation scheme from Preferences. At the Preferences screen, click New Project.

A box will pop up that will prompt you to Create a New Project, exactly as if you started from the Projects screen. Name the New Project and ensure that the Aggregation Scheme represents the desired selection. Then, click CREATE PROJECT.

Now, IMPLAN will direct you to the Regions screen. Choose your Region and continue to model as you would normally. The 546 Industries are now aggregated into the selected scheme. On the Impacts screen, you can see the aggregated Industries under the Specification. 

Entering a Value using the aggregated scheme will affect all of the Industries included in that Group, in this case, the 2 digit NAICS Sector. Remember, your Event Specifications and your Results will all be in the aggregated scheme.

USER DEFINED AGGREGATION:

CREATING YOUR OWN SCHEME

Sometimes, you just want to look at a certain group of IMPLAN Industries aggregated in a way that doesn’t follow the standard NAICS 2 and 3 digit breakdown.  Maybe your client wants to look at transportation manufacturing versus all other manufacturing. 

Note this is only available for the current 546 Industry Scheme (2018). You cannot create a customized aggregation scheme for older Industry Schemes.

To create your own Industry Aggregation scheme, begin on the IMPLAN dashboard. Upon clicking on the avatar icon in the upper right, a call out box will open. Choose Preferences. 

 

This will take you to the Industry Aggregation screen. Click on the box labeled NEW CUSTOM SCHEME. 

This will take you to the New Industry Scheme page. The box on the left side of the screen contains all 546 IMPLAN Industries. To begin your scheme, click on + Add New Industry.

A popup will appear asking you to name your New Industry. For this example, we will create a New Industry for all transportation manufacturing (IMPLAN Industries 340-364. So, we’ll name our New Industry accordingly. Next, hit SAVE.

The name of the New Industry is now in the box on the right. To add the IMPLAN Industries that we want to include, click on each from the box on the left so that it is highlighted in teal. Next, drag the highlighted set to the New Industry.

The Industries you selected will no longer appear in the box on the left. The box on the right will show the number of Industries included in each New Industry just to the right of the name. In this example, there are 25 Industries in this New Industry. 

To view or edit what Industries are included, click the down arrow and the New Industry will expand to show the list. Here you can also delete and add additional individual Industries. Use the up arrow at the bottom of the list to collapse it.

To change the name of the New Industry, click on the pencil icon. To delete it, click on the trash can icon.

In this example, we will look at Transportation Manufacturing against all other manufacturing. So, create another New Industry called All Other Manufacturing by following the same process. This group will include IMPLAN Industries 63-339 and 365-391 for a total of 384 included Industries.

To keep the remaining Industries at the individual Industry level, leave them in the box on the left. To create another group that contains the remaining Industries, add another New Industry and include all 217 remaining Industries from the box on the left. You can add all of the Industries that remain on the left to a new Industry on the right by clicking the Select All button.

Note, there is no undo button, so be careful where you drag your Industries to ensure that they end up in the correct spot. Also, individual Industries will populate in the order you add them in; they will not sort numerically.

A popup will remind you that all Industries that are left outside of a New Industry (in the box on the left) will be left as individual Industries in the new aggregation scheme. Click CONFIRM to accept.

A new popup will appear asking for a name for the New Scheme. 

Note, once you click on SAVE, your custom aggregation scheme cannot be edited. Once it is built, you can continue to use it across Projects, so give it a logical name to help you find it later.  

IMPLAN is now building the new aggregated scheme. This will take a few moments as IMPLAN is rebuilding the deflators, margins, and multipliers for the new scheme. Once the scheme is available, it will be selectable from the Industry Aggregation drop down on the Preferences page. 

 

 

USING A CUSTOM BUILT SCHEME

All of your Custom Industry Aggregation schemes you have built will be saved in IMPLAN. If you want to use one of your Custom Industry Aggregation schemes later, you can start the Project from the Preferences screen or the Project screen. Create a New Project and search for the name of your Custom Industry Aggregation scheme in the Aggregation Scheme drop-down box. 

Building Regions in a Custom Aggregation Scheme

Because you have defined your own Custom Industry Aggregation Scheme, each Region you'd like to analyze in the new Scheme will have to be built. The "i" next to the name of a Selected Region in the new scheme will initially be a lighter shade of gray indicating it has not yet been built. If you need to work with multiple Regions in the new scheme, you'll need to build each Region one at a time by clicking on the light gray "i" to trigger the build progress to begin. This includes the US Total which would be an combination of the 50 states plus DC.

If you only need to work with one Region in the new scheme, simply click "Add to Impacts" once you've Selected the Region and the Region will start building automatically.

 

Analyzing in a Custom Industry Aggregation Scheme

In Projects using an Industry Aggregation scheme, there are no longer 546 Industries when you look Region Details at the Region Overview. Instead, there are the three aggregated groups just created.

Similarly, the Results are also aggregated.

Written February 11, 2020
Updated October 5, 2020