Construction Effects Over X Amount of Years

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    IMPLAN Support
    Hi Calvin! Thank you for your post. 1. You are right in that IMPLAN is an average annual Model. You can use the Dollar Year for View in the Result Screen to adjust the year. This is to view the impact of the Construction project in a different year. We however recommend to not go out over 5 years. A caution when looking at a mutli year construction impact is to not add employment across years. Construction Employment is one of the most often misconstrued or misreported element in economic impact analysis. Here are some common reasons: Multiple Year Projects: Often the value of a construction process is not broken out by year or the final report is summative across the entire construction project. Not all positions change: While a construction project may require 32 jobs the first year and 50 jobs the next year. These jobs may not be summative some of these positions such as primary contractors may be the same job from year to year. If you know that the construction takes place over multiple years, it is often recommended that you build each year's construction in a separate Event. This can depend on whether or not you have a total inflation included construction value or actual individual year's construction values or Employment. In the first case- one Event is sufficient because inflation is accounted for in the cost estimates- the value can be entered into a single year and the construction Employment can be divided by the number of years of the project (the Event Year is typically the current year in this case). In the case of having each year's values (thus an estimate that did not include deflation) or if you are working with Employment/year as your starting value you would want the Event Year to reflect the year of that project. Alternatively, if you have values deflated by year, and you want to, you can demonstrate what the project is doing each year by setting up each year as a separate Event and Activity. It is also important to note that the results, regardless of which Dollar Year for View is applied that the only change in the impacts is the change in inflation, as the underlying Multiplier Model is static and thus the relationships don't change with time, this is why the 5 year maximum is the recommended scope. 2. Sector 449 is only the operations of those services(Architectural, engineering, and related services) and Sectors 52- 61 would be the construction sectors. However, Sector 449 is a component included in the Construction Sectors. I have included the Excel spreadsheet to assist in Construction Sector selection. [attachment=662]h384d8d7.xls[/attachment] I hope that this helps! Thanks.
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    callai
    Thank you very much for the answer and quick response! I just had a follow up question. Currently, the default "Event Year" when constructing activities and events is 2015. However, I want my construction to start in 2017, so will I have to adjust this "Event Year" to 2017? If so, I played around with IMPLAN and noticed two ways of doing this. The first way is to go to "Event Options -> Edit Event Properties -> Event Year". If I use this option, the variables (Ex. Industry Sales / Employment / Employee Compensation / Proprietor Income) will change. The second way is to "Event Options -> Change All -> Event Year" (which would save me time from changing each one manually). But, when I make this year change, the aforementioned variables stay the same. Why is there a difference? Best, Calvin
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    IMPLAN Support
    Thank you for your follow up question. You are correct that if the project starts in 2017, you will want to set the Event Year to 2017. (This assumes that the dollars you are working with have not taken into account inflation). However, the Event Year needs to be set first before you enter in your Input value (Industry Sales, Employment, Employment Compensation or Proprietor Income. This is very important because if this order of operations is not followed the results can represent deflated values from more than one year). Since this is a multi year project that includes several buildings, you will need to identify the correct construction sectors for the buildings being built; for example; (Construction of new commercial structures- Sector 57 vs Construction of other new residential structures- Sector 61). Thus is we assume a somewhat simplified example, let's say we have a campus where 5 construction projects will be built over 6 years (Building A, B, C, D, E respectively) A is constructed in 2017 B is constructed in 2017 and 2018, C is constructed in 2019 D is constructed in 2020 and 2021 E is constructed in 2021 and 2022 We would first need to assign to each project the appropriate code if A, C and E are Educational buildings they would be under Sector 55, if B is road construction (Sector 56) and D is a dormitory (Sector 60) each of these would be selected separately. We thus need then need to determine the number of Activities and Events that will be required, dependent upon the way you want to view the results, it could be the total impact (1 Activity with up to 8 Events- 1 per building per year), by year (6 Activities), by building type (5 Activities), etc. It might help us to give you more specific help on how to do this setup, if you would like it, if you can provide us information on how granular the data you are are working with is (e.g. I have one value for all buildings constructed over a 6 year period, or I have total cost per building and construction length but no division of dollar values, etc.) IMPLAN's results represents an impact for a year. To get a total construction impact across the construction years; you can use the Dollar Year for View in the Scenario Results screen to view the impact in the specific year. You will then need to add up those values to get a total impact. On very important factor in this is that you cannot add years in different Dollar Year for Views- if you want to sum the results they must all be in one Dollar Year for View, typically people use current year as their audience will understand the meaning of current year's data. There are several different ways you can set up this analysis, this depends on how you are interested in viewing the results. The construction sectors should be used to ascertain the economic impact of building the structure. Once complete, the specific function of the building needs to be selected to asses to economy impact of the operations of the industry.
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    callai
    Thank you very much! If I were to construct a scientific research & development facility / center, what sector would that fall under? Universities?
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    callai
    Also, to provide more clarity regarding my previous multi-year construction questions. I have multiple activities to differentiate construction. And what I want to model is that half of an activity will start in 2017, while the second half will start in 2018. For example: Activity A Event 1: 55 (Construction of new educational and vocational structures) // Event Year 2017 Event 2: 55 (Construction of new educational and vocational structures) // Event Year 2018 Activity B Event 1: 56 (Construction of new highways and streets) // Event Year 2017 Event 2: 56 (Construction of new highways and streets) // Event Year 2018 In the example I listed, am I correctly demonstrating that this activity will start over two separate years, and finish construction in two years? Then, if I wanted to view the results in 2016 dollars, do I select "Dollar Year for View: 2016" in the Results Scenario tab? Thank you!
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    IMPLAN Support
    Hi Calvin. Thank you for your post. To answer your question about the type of Construction Sector to use for your analysis: 52 would be appropriate if it was healthcare related R&D 55 if it's similar to university driven R&D- i.e. non medical laboratory 53 is an option if more manufacturing related R&D. So that you capture the Spending Pattern that most closely matches your construction project; I recommend looking at the different Construction Sectors Spending Pattern: Explore> Social Accounts> Balance Sheet (Tab), and select View By: Industry Balance Sheet and the Commodity Demand tab. With regards to your more recent post. Again, the Event Year doesn't reflect what year the construction is taking place, but the dollar value represented by what is in Industry Sales. So as long as those are the construction value dollars anticipated to be spent in those years, then yes this is the right setup The scenario you described does say that each construction scenario will take two years and that you know the construction value for each of those two years. You would then select the appropriate Dollar Year for View to view the value of the dollar you wish to see the construction impact in. If the academic construction project will start in 2017 and end in 2018; you could then set the Dollar Year for View to 2016 to see the impact of what constructing the building that year would be. Again, this sector is just the construction impact of building the sector and not the operations.
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