Construction Assumptions

Hi Daniel, If your project is a 60/40 split and you know that that is the case, you will likely want to use and Analysis-by-Parts methodology to put to analyze it, as the ratios for Sector 38 will not likely be representative. When you use an Industry Change Activity Type, the Industry Sales value actually represents the total cost of the building materials and labor. The software has a build in regional ratio of inputs to labor payments it uses to split the Industry Sales value before running the impacts. So the way you have put the analysis together now, you are actually over attributing the labor component and undervaluing the material component. In your situation, if Construction of other new residential structures is your Sector we would recommend: 1. importing the spending pattern for this Sector (Activity Options>Import> Industry Spending Patterns) 2. normalizing the spending pattern via (Events Options> Change All> Normalize Events) 3. Setting Activity Level to your budget value. 4. Creating a second Activity as a Labor Income Change with two Events for the value of your Labor Income payments. One point of consideration is that is you divide the total value between inputs and labor, you are leaving no value for taxes or profits, which, while they are not contributing to Multiplier Effects in the Model are real considerations and these values should not be included as Labor Income or inputs because this would result in overstating of these impacts. You analysis results will not include any Direct Effects so you will need to add these back into the analysis and re-sum the totals. This article describes analysis-by-parts: http://implan.com/index.php?option=com_content&view=article&id=373 and summing the results. You can use the ratios in the Balance Sheets> Industry Balance Sheet> Value Added to split the Labor Income (Employment Compensation and Proprietor Income) and OPTI and TOPI portions of Value Added. If you do not want to do the Analysis-by-Parts and you are ok with the underlying ratios for the Sector in your region, you can use the Industry Change Activity put the total cost of the building in as Industry Sales and edit the EC and PI to sum to your known Labor Income values. Hopefully this helps and if you have any additional questions, please let us know.