We are working with an Arizona industry group on a contribution study. The membership includes ready mix concrete firms, sand and gravel companies, and stone crushing operations. The association is interested in direct and total impacts of the combined membership including multiplier effects. Sand and gravel and stone are major inputs to ready mix so I am wondering if there is a case study or suggested approach when the overall industry/grouping to be modeled includes firms that supply intermediate inputs to other members of the group. We do have the value of output/sales/shipments, employment and payroll for each component (sand and gravel, crushed stone, and ready mix) for 2014. Thanks for any advice or direction on this
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  • Hi. Thank you for your post! I recommend looking at these Industries using the Analysis-by-Parts methodology. You would import the spending pattern for each target Industry and delete the commodity coefficients for the intermediate purchases that are also being modeled. So in this case if your 3 Sectors were sand, gravel and ready mix concrete, you would import the ready mix spending pattern and delete the Events for sand and for gravel. You would then do the same with sand and gravel spending patterns to ensure that they are not making purchases from one another, or purchases or ready mix concrete. The resultant spending patterns will some to a smaller total coefficient value than they did prior to the modification. You will want to normalize all these spending patterns so they sum to 1.0 (Events Options> Change All> Normalize Events) and then enter the Activity Level as the cost of goods and services budget less the amount spent on the other two industries being considered. The Labor Income can be run normally in a Labor Income Change Activity. By eliminating the purchases of the feedback Sectors from the spending pattern of the target Industry you keep the analysis from double-counting the purchases of the other modeled Industries, without losing the remaining business to business purchases or labor purchases that might apply to these Sectors. Hopefully this helps --Implan Support Staff

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