Industry Spending Pattern Events

INTRODUCTION

The Industry Spending Pattern Event is used to examine only the spending on goods and services (Intermediate Inputs) by an Industry. This can occur when a business does not have any Employment or spending on Labor Income, such as a non-profit organization or charity foundation that runs solely on volunteer labor.

EVENT TYPE DETAILS

At the most basic level, Industry Spending Pattern Events can be used to examine the economic impact of only the Intermediate Inputs of an Industry. Intermediate Inputs are the purchases of non-durable goods and services that are used to produce other goods and services rather than for final consumption.  Spending Patterns can be thought of as the backward linkages or supply chain of the Industry. The Industry Spending Pattern will include a list of Commodities purchased, the coefficients which represent the amount spent on each commodity per dollar, and the Local Purchase Percentage of each Commodity which represent the amount purchased locally. 

By default, the Event Value for an Industry Spending Pattern is set to Intermediate Inputs and the Local Purchase Percentage is set to “SAM” or the Regional Purchase Coefficient of each Commodity. The user can change the defaults within a Spending Pattern Event using the Advanced Fields icon. 

The Event Value is then applied to the coefficients of each Commodity in the spending pattern. If a user selects Output, the Event Value will first be multiplied by the total Gross Absorption percentage for the Industry before being applied to the spending pattern. For example, if the Gross Absorption for an Industry was 45.6%, the Event Value of $1M would be reduced to $456,000 before being applied to each Commodity coefficient. 

While the Spending Patterns represent the average buying pattern and ratios of all firms in that Industry, it may not match the expenditure pattern of the firm being analyzed. To learn more about making adjustments to a spending pattern, read Editing a Spending Pattern.

INDUSTRY SPENDING PATTERN EVENT

In this example, we want to look at the annual budget of $2M spent on Intermediate Inputs by an advocacy group run by volunteers. To set up this activity using an Industry Spending Pattern Event, first create a unique Title for the Event, then select Industry Spending Pattern for the Event Type. Next, click on Specification. Use the dropdown menu to select Industry 522 - Grantmaking, giving, and social advocacy organizations, the IMPLAN Industry that best matches the production activity. The default Value for this Event Type is Intermediate Input, so enter $2,000,000.

Click Advanced Fields to open up the spending pattern modal. From here users can select the appropriate Data Year from the dropdown menu, toggle between Intermediate Inputs or Output, and make edits to the spending pattern.

Note that if edits result in the Sum of Percentages to be greater than 100%, IMPLAN will prompt the following warning message. Click Normalize if this was not intentional, or click Continue if this was intended.

ANALYZING AN INDUSTRY SPENDING PATTERN 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 number of 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.

Note  that there are no Direct Effects. Industry Spending Pattern Events only affect spending on Intermediate Inputs, so there will only be Indirect and Induced Effects. Learn more in the article Explaining Event Types.

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

Understanding Intermediate Inputs (II)

Written August 30, 2023