INTRODUCTION

An Industry is a group of establishments (businesses) engaged in the same or similar types of economic activity. Industry Events are used to model a change in production for an Industry or Industries. If the type of business is known to the analyst, then an Industry Event is most appropriate to model the impact. 

Event Type Industry (Output, Employment, Employment Compensation, Proprietor Income)
Event Use Analyzing a change in an Industry’s production
Event Specification Industry 1-546 experiencing change in demand/production  

Event Value

 

1 or more:

     Output

     Employment

     Employee Compensation

     Proprietor Income

 

EVENT TYPE DETAILS

There are four Industry Event Types in IMPLAN: Output, Employment, Employee Compensation, and Proprietor Income. Each of them operates in the same manner. 

IMPLAN will always use the Industry’s production function to estimate the Direct Effect for this Event Type, but will prioritize the Event Values in the following order:

  1. Output
  2. Employee Compensation
  3. Proprietor Income
  4. Employment

Therefore, if an Industry Employee Compensation Event had a value of $250,000 and an Output Value of $1,000,000 entered in the Advanced Field, the Event would still produce the same Impact Results had it been entered as an Industry Output Event Type, as Output takes priority. 

This section will walk through an example of each type of Industry Event.

INDUSTRY OUTPUT

The first type of Event is Industry Output. In IMPLAN, Output represents the value of Industry production. For service Industries, Output equals sales. For  manufacturing firms, Output equals sales +/- the change in inventory. For retailers and wholesalers, Output equals their gross margin or Marginal Revenue (not gross sales) and does not include the value of goods sold. By default, the Event Value of an Industry Output Event with a retail or wholesale Industry specified is interpreted as Purchaser Price (Total Revenue). Learn more about retail and wholesale margins in the article Retail and Wholesale: Industry Margins.

The Industry Output Event is recommended when a user only knows the level of Output for a business or Industry. Let’s say there is a new cheese manufacturing firm that will have $1M in new production. To set up this activity using an Industry Output Event, first create a unique Title for the Event, then select Industry Output for the Event Type. Next, click on Specification. Use the dropdown menu to select Industry 82 - Cheese manufacturing, the IMPLAN Industry that best matches the production activity. Check out the article Picking an Industry for assistance in choosing the appropriate IMPLAN Industry. The default Value for this Event Type is Output, so enter $1,000,000.

Click Advanced Fields to enter additional information for Employment, Employee Compensation, and/or Proprietor Income. Adding additional fields will overwrite the production function values used in the analysis for any entered fields. When adding more than one additional value to the Industry Output Event, consider using the Industry Impact Analysis (Detailed) Event Type. 

Click Hide Advanced Fields to collapse the Advanced Field. 

INDUSTRY EMPLOYMENT

When analysts are only given an estimated Employment value for a business or Industry, the Industry Employment Event Type is recommended. As Employment is not part of an Industry’s production function, IMPLAN will utilize the Industry’s Output per worker relationship to estimate the Direct Effect values. 

In this example, we are told there will be 100 new employees in a new sawmill. To set up this activity using an Industry Employment Event, first create a unique Title for the Event, then select Industry Employment for the Event Type. Next, click on Specification. Use the dropdown menu to select Industry 267 - Sawmill, woodworking. The default Value for this Event Type is Employment, so enter 100.

Click Advanced Fields to enter additional information for Output, Employee Compensation, and/or Proprietor Income. Adding additional fields will overwrite the production function values used in the analysis for any entered fields. When adding more than one additional value to the Industry Employment Event, consider using the Industry Impact Analysis (Detailed) Event Type. 

Click Hide Advanced Fields to collapse the Advanced Field. 

INDUSTRY EMPLOYEE COMPENSATION

When Output for a business or Industry is unknown, but there is Employee Compensation associated with a new project, an Industry Employee Compensation Event is appropriate. Employee Compensation is the total payroll cost of wage and salary employees to the employer. This includes wages and salaries, all benefits and payroll taxes. It is also referred to as fully-loaded payroll. 

In this example, we are told there will be a new crane manufacturing facility in the Region and the employees will earn $5M in Employee Compensation. To set up this activity using an Industry Employee Compensation Event, first create a unique Title for the Event, then select Industry Employee Compensation for the Event Type. Next, click on Specification. Use the dropdown menu to select Industry 289 - Overhead cranes, hoists, and monorail systems manufacturing. The default Value for this Event Type is Employee Compensation, so enter $5,000,000.

Click Advanced Fields to enter additional information for Output, Employment, and/or Proprietor Income. Adding additional fields will overwrite the production function values used in the analysis for any entered fields. When adding more than one additional value to the Industry Employee Compensation Event, consider using the Industry Impact Analysis (Detailed) Event Type. 

Click Hide Advanced Fields to collapse the Advanced Field. 

INDUSTRY PROPRIETOR INCOME

The final type of Industry Event is Industry Proprietor Income. When Output for a business or Industry is unknown, but there is Proprietor Income associated with a new project, an Industry Proprietor Income Event is appropriate. Proprietor Income consists of payments received by self-employed individuals and unincorporated business owners. More specifically, it represents the current-production income of sole proprietorships, partnerships, and tax-exempt cooperatives.

In this example, we are told there will be a new pecan farm in the Region. The only information provided was that the farmer will earn $2M in new Proprietor Income. To set up this activity using an Industry Proprietor Income Event, first create a unique Title for the Event, then select Industry Proprietor Income for the Event Type. Next, click on Specification. Use the dropdown menu to select Industry 5 - Tree nut farming. The default Value for this Event Type is Proprietor Income, so enter $2,000,000.

Click Advanced Fields to enter additional information for Output, Employment, and/or Employee Compensation. Adding additional fields will overwrite the production function values used in the analysis for any entered fields. When adding more than one additional value to the Industry Proprietor Income Event, consider using the Industry Impact Analysis (Detailed) Event Type. 

Click Hide Advanced Fields to collapse the Advanced Field. 

ANALYZING AN INDUSTRY EVENT

Now it is time to assign Events to Groups. To assign an Event, click the Drag Event icon, hold it, and drop it into the corresponding Group. The Multi-Select feature allows users to select more than one Event at a time.

Each Group will indicate the number of assigned Events in the upper right corner by showing a number indicating the total Events in that Group. To double check if an Event was correctly added to a Group, use the drop down arrow to view the assigned Events.

Now click Run in the bottom right of the Impacts Screen.

When the analysis is finished, click View Results. For more information on how to interpret them, check out the article Examining Results & Interpreting Direct, Indirect, and Induced Effects.

In this example, we included four events, so the default on the Results screen will include all four. To look at the impacts for a single Event, click on Filters and search for the Event Name, then click Refresh.

INDUSTRY DOES NOT EXIST

If an Industry does not exist within a Region being analyzed, a warning will appear indicating the Event and Group after selecting Run. If a user clicks Continue without making changes, those Events will not generate any results. Learn more about Adding an Industry to your Region.

RELATED ARTICLES

Explaining Event Types

Examining Results & Interpreting Direct, Indirect, and Induced Effects

Picking an Industry

 

Written August 30, 2023