Modeling New Construction

Hello, I'm modeling the impact of the construction of a new hotel. I understand I'm supposed to input the sectors separately for construction costs (code-34) and architecture, engineering, etc. (code-369), my questions are the following: 1) Do I also put in a separate code for Furniture, Fixtures, and Equipment, and if so do I use code 301? 2) Since my construction is taking place over 3 years, how do I model the respective costs over 3 years? I believe I can model them all in the same activity. Do I just enter the respective costs for each respective year each as its own event within the same activity? 3) Are there any other inputs I am missing to run this model? Thanks! - Nima
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  • Hi Nima, Great questions. Interestingly, soft costs like architectural engineering and legal services are included in the construction spending pattern. So if you want to enter those values separately, you will want to alter the IMPLAN spending pattern for Sector 34. Please let us know if this is the case, and we can walk you through the methodology to do this. Your FFE purchases should be modeled in one of two ways: [ol] [li]If you don't know specifically what items are purchased, you just know a total value of FFE, you will want to put this value in 319 Wholesale Sales and select the Gross Retail Sales default option. Unless you know that FFE purchases were done through a retailer, or purchased directly from a producer, which is not typically the case. You may also want to set the Local Purchase Percentage value to SAM Model Value (via [url=https://implan.com/v4/index.php?option=com_multicategories&view=article&id=567:567&Itemid=71#lpp]Event Options> Edit Event Properties>Set Local Purchase Percentage> SAM Model Value[/url], unless you know that all sales of FFE came through a local wholesaler.[/li] [li]If you have a line-item budget of FFE expenditures you can assign these to specific producing Sectors. The Help>Sector Search can be useful in determining which Sectors to assign your purchased items too. Most likely these purchases also will not be directly from the factory, so these purchases will also need to have LPP set to SAM Model Value and then will need to have Margins set. This is done via the [url=https://implan.com/v4/index.php?option=com_multicategories&view=article&id=567:567&Itemid=71]Event Options> Edit Event Properties>Margins> Yes [/url]. This will assume both wholesale and retail sales, so you will need to edit the Margins for this Event. If you will be using this methodology please let us know and we can certainly assist you in how to go about editing Margins.[/li] [/ol] Yes if you have a cost breakdown you can run them all in the same Activity just setting them up as separate Events with different Event Years. Please note that you need to set the Event Year field prior to entering in Industry Sales or Employment values. This will yield an aggregate set of results that will include the entire construction project. One note about this and Employment. Since the Employment values will not be added each year of the project, since jobs evolve as the site develops (i.e. jobs doing site preparation, the first year are replaced with jobs doing wiring the second year) and/or are continual from one year to another, you would not want to report the Employment figures as reported. Instead you would want to divide the Employment value over the three years of the project and report the Employment as jobs supported/year. We don't see anything off-hand that you are missing in regards to looking at the construction component of a project. Do you have additional data, that you are looking to see if IMPLAN can work with?
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