Modelling Capital Investments
Hi,
I am trying to model the impact of loans made for various purposes. I'm currently struggling with loans made for equipment purchases (capital investments) not related to construction (unless it is for a local construction to purchase their own equipment).
I've been referring to the page: http://support.implan.com/index.php?option=com_content&view=article&id=358 for modeling capital investments.
As an example, one loan was used to purchase equipment for a company in a small county in. First, if we know that the machine was purchased from PA, we cannot model that, correct? If no, then lets look at the following for the case where we don't know where the machinery was manufactured or purchased.
In a forum response, I found this comment: “Equipment purchases that the facility will use once construction is complete (capital expenditures) do not need to be treated like an imported spending pattern. These purchases are a Final Demand and can be captured through a standard Industry Change activity. It is important to know both where and how the items were purchased.” But that sounds different than the article I’m referring to above. Is the imported spending pattern and investment spending pattern different?
I've tried to follow the instructions listed under "Locating Investment Spending Patterns" on that page, but I get a note that pops up that says: “The Activity cannot be imported because these regions are not compatible. Activities can only be moved between Models built for the same county (ie China to China).” Am I supposed to be importing the appropriate spending pattern, or just referencing it? If just referencing it, how do I use it?
Additionally, I think margins should NOT be applied since they are purchasing the equipment directly from the manufacturer. Is that correct? And LPP should be set to SAM, correct? Would that number be the RPC?
Many thanks in advance!
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Also, as I try to model using the sector of these companies within the county where a particular county is located, I'm frequently receiving this message: "Industry XXX does not exist in the model. There will be no impacts." Sometimes I can find a similar sector, but often I cannot. How should I proceed on those? These companies are incorporated in those locations (although sometimes just have a location there), so I'm not sure why the sector is not coming up. Thanks10
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IMPLAN SupportHello Rebecca, You may be receiving the message that the industry does not exist for a few reasons, one being that the companies incorporated may be so new that they are not included in the 2015 data set or they may be operating under a different NAICS code. You are able to set-up an Analysis-By-Parts to complete your project. You’ll need to use a proxy region that the sector does exist in and pull the industry information for the sector to input into your model for your selected region. This is a bit of an advanced technique so I have linked below a step-by-step guide on how to use ABP when the industry does not exist in the region. http://support.implan.com/index.php?option=com_content&view=article&id=483 Thank you, IMPLAN Staff0
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