shift share and location quotients: an industry sector analysis

AN INDUSTRY SECTOR AND SHIFT-SHARE ANALYSIS OF LOWNDES COUNTY AND ITS SISTER COMMUNITIES

By: Andy Carswell, University of Georgia

LOWNDES COUNTY CHAMBER OF COMMERCE ECONOMIC SUMMIT

April 12, 2012Valdosta, GA

TALES OF WOE ON THE ECONOMIC FRONT

EMPLOYMENT NUMBERS (%) BY INDUSTRY, 2009

Source: U.S. Census Bureau County Business Patterns

Variable Lowndes County

Rapides County,

LA

Quachita County,

LA

Forrest County,

MS

Montgomery County, AL

Lee County,

AL

Morgan County,

AL

Floyd County,

GA

Houston County,

GA

Clarke County,

GA

Florence County,

SC

Nash County,

NC

Wayne County,

NC

Construction 9.07% 7.25% 8.28% 6.20% 6.84% 10.24% 7.95% 6.11% 8.25% 5.45% 7.38% 9.36% 9.20%

Manufacturing 3.58% 2.33% 3.33% 3.63% 3.11% 4.73% 7.17% 5.30% 2.52% 3.03% 3.37% 4.16% 3.53%

Wholesale Trade 5.34% 4.28% 4.78% 4.70% 5.99% 3.09% 6.18% 4.53% 2.08% 3.88% 5.65% 5.11% 5.18%

Retail Trade 19.42% 17.75% 16.85% 19.28% 16.45% 19.42% 19.02% 20.21% 18.62% 17.87% 22.97% 20.25% 21.04%

Finance and Insurance 6.18% 8.32% 8.52% 8.55% 7.74% 6.17% 6.73% 7.43% 8.29% 6.54% 8.18% 6.96% 6.88%

Real Estate 4.90% 4.35% 4.21% 5.45% 4.34% 5.14% 3.64% 3.77% 5.43% 6.98% 4.32% 3.62% 2.99%

Professional, Scientific and Technical 8.12% 8.54% 10.37% 9.99% 11.02% 7.69% 7.73% 8.91% 12.07% 10.21% 6.73% 7.19% 6.65%

Health Care 12.00% 15.88% 13.97% 10.58% 11.73% 9.17% 12.69% 12.88% 12.11% 14.06% 11.02% 11.17% 12.64%

Accommodation and Food Services 9.77% 7.22% 6.97% 9.29% 7.98% 12.09% 7.47% 9.57% 10.98% 11.13% 9.32% 8.95% 8.35%

TRACKING INDEX OF GROWTH BY INDUSTRY

Index r,t = (Y r,2009/Y r,2003) * 100

Where:

Y = Industry Variabler = Region (county)

GROWTH INDEX BY INDUSTRY (2003 – 2009)Variable Lowndes

County

Rapides County,

LA

Quachita County,

LA

Forrest County,

MS

Montgomery County, AL

Lee County,

AL

Morgan County,

AL

Floyd County,

GA

Houston County,

GA

Clarke County,

GA

Florence County,

SC

Nash County,

NC

Wayne County,

NCAgriculture, forestry, fishing and hunting 51.2 171.1 49.3 64.3 Mining 129.2 150.0 56.4 136.5 56.4 Utilities 82.5 65.7 Construction 66.6 93.4 91.7 108.5 81.2 120.1 62.3 81.5 85.8 90.3 81.5 100.2 89.1Manufacturing 117.4 138.9 76.5 107.4 110.5 81.7 97.6 86.9 91.3 86.1 61.8 57.6Wholesale trade 99.0 98.8 109.9 75.6 108.3 156.9 103.6 93.9 101.7 102.3 109.9 167.9 83.0Retail trade 108.3 101.4 103.6 86.5 91.1 122.6 93.3 94.7 108.8 89.3 103.2 101.3 99.4Transportation and warehousing 121.9 82.6 88.5 122.9 96.7 153.6 63.1 71.7 239.9 81.6 98.5 83.3 112.1Information 115.4 85.3 105.6 77.3 115.3 78.5 59.6 132.0 88.1 82.7 58.6 195.4Finance and insurance 176.1 94.8 66.5 60.0 74.5 95.0 80.0 64.8 117.2 89.4 104.1 102.5 96.4Real estate activities

111.1 79.9 117.2 104.3 106.5 102.0 93.8 88.6 120.3 109.3 73.1 77.7 72.1Professional, scientific, and technical services 79.1 92.4 106.0 90.3 105.9 99.9 104.0 106.0 110.9 116.5 110.9 105.9 77.0Management of companies and enterprises 91.1 295.2 159.7 82.6 109.7 124.3 139.1 52.3 37.0 160.4Administrative and Support and Waste Mang and Remediation Srvs 94.7 130.9 125.1 57.5 102.6 62.4 87.7 118.1 110.5 77.9 70.4 117.5 79.0Educational services

106.2 129.9 129.0 124.5 98.8 152.6 114.0 114.5 84.7 106.7 100.2 105.8Health care and social assistance 145.5 107.1 112.6 102.3 108.4 110.9 109.5 111.6 119.7 126.7 115.2 100.5Arts, entertainment, and recreation 106.7 114.6 99.3 150.9 108.7 83.2 131.7 158.4 135.0 89.5 116.6

Source: U.S. Census Bureau County Business Patterns

NET INFLOW/OUTFLOW BY INDUSTRY, 2003 - 2009Variable Lowndes

County

Rapides County,

LA

Quachita County,

LA

Forrest County,

MS

Montgomery County, AL

Lee County,

AL

Morgan County,

AL

Floyd County,

GA

Houston County,

GA

Clarke County,

GA

Florence County,

SC

Nash County,

NC

Wayne County,

NCAgriculture, forestry, fishing and hunting -100 135 -37 -56 Mining 35 10 -24 19 Utilities -573 -198 Construction -1624 -304 -292 141 -1233 392 -1650 -205 -181 -154 -439 3 -231Manufacturing 237 1154 -1795 297 1165 -1291 -305 -979 -385 -987 -4102 -3801Wholesale trade -69 -21 242 -358 458 377 70 -71 6 44 254 1038 -397Retail trade 152 104 328 -651 -1275 1226 -415 -242 534 -894 276 71 -33Transportation and warehousing 111 -166 -152 147 -148 674 -704 -149 312 -184 -20 -184 58Information 143 -137 29 -673 76 -105 -431 72 -114 -150 -222 395Finance and insurance 348 -92 -1996 -742 -1856 -45 -368 -521 174 -148 162 52 -42Real estate activities 121 -180 177 18 125 12 -26 -39 85 74 -186 -94 -103Professional, scientific, and technical services -147 -139 241 -126 367 -1 73 48 380 233 232 55 -222Management of companies and enterprises -247 164 207 -81 134 55 86 -106 -515 131Administrative and Support and Waste Mang and Remediation Srvs -13 495 699 -1005 210 -1546 -329 258 165 -657 -913 409 -186Educational services 391 203 134 172 -25 70 315 56 -88 26 1 46Health care and social assistance 318 903 1435 178 1292 590 538 822 824 2699 749 41Arts, entertainment, and recreation 349 86 -3 625 32 -43 73 146 149 -26 47Accommodation and food services -160 617 639 20 859 645 134 381 835 722 366 -9Source: U.S. Census Bureau County Business Patterns

AND IN THE BIG PICTURE…!

OVERALL NET IN-/OUT-MIGRATION, 2003 - 2009

VariableWayne County,

NC

Morgan County,

AL

Forrest County,

MS

Florence County,

SC

Floyd County,

GA

Clarke County,

GA

Lowndes County

Montgomery County, AL

Lee County,

AL

Ouachita County,

LA

Rapides County,

LA

Nash County,

NC

Houston County, GA

Net work force

expansion (contractio

n)

-4805 -3142 -2773 -1719 -868 -827 -816 -476 1178 1807 2701 2955 2957

Source: U.S. Census Bureau County Business Patterns

OTHER FUN FACTS REGARDING INDUSTRY GROWTH PATTERNS*

• Most volatile industry across counties (Management of companies and enterprises)

• Least volatile industry across counties (Retail)• County with most drastic shake-up of industry mix

(Rapides County, LA)• County with most stable industry mix over time

(Clarke County, GA)

* Presenter Caviat: This MAY be only “fun” for me.

LOCATION QUOTIENTS

• A Tool Within Economic Development To Help Identify Exporting (and Importing) Industries

• Important In Terms of Understanding The Extent To Which Community Needs Are Being Met By Local Businesses (Or Not)

• LQ = (% of Local Employment in Industry i) / (% of State Employment in Industry i)

LOCATION QUOTIENTS BY INDUSTRYVariable Lowndes

County

Rapides County,

LA

Ouachita County,

LA

Forrest County,

MS

Montgomery County, AL

Lee County,

AL

Morgan County,

AL

Floyd County,

GA

Houston County,

GA

Clarke County,

GA

Florence County,

SC

Nash County,

NC

Wayne County,

NCAgriculture, forestry, fishing and hunting 0.83 1.32 0.55 0.91 0.23 0.65 0.27 1.04 0.39 0.23 1.26 1.57 1.81Mining 0.14 0.40 0.87 0.49 0.50 0.75 0.58 0.38 0.36 0.97Utilities 2.03 1.17 0.91 0.99 0.66 0.68 0.52 1.88 1.28 0.76 1.07 1.25Construction 1.06 0.86 0.98 0.81 0.78 1.16 0.90 0.72 0.97 0.64 0.72 0.84 0.83Manufacturing 0.98 0.72 1.03 0.89 0.68 1.04 1.57 1.45 0.69 0.83 0.84 0.98 0.83Wholesale trade 0.88 0.80 0.90 0.98 1.11 0.57 1.14 0.75 0.34 0.64 1.18 0.95 0.96Retail trade 1.25 1.09 1.04 0.97 0.89 1.05 1.03 1.30 1.20 1.15 1.32 1.28 1.33Transportation and warehousing 1.00 0.77 0.65 0.85 0.75 0.87 0.92 0.76 0.50 0.72 0.90 1.14 1.14Information 0.59 1.02 1.09 0.76 1.17 0.89 0.82 0.73 0.63 0.82 0.98 0.73 0.87Finance and insurance 0.89 1.12 1.15 1.05 1.08 0.86 0.94 1.07 1.20 0.94 1.10 1.09 1.08Real estate activities 0.99 1.00 0.97 1.34 1.04 1.23 0.87 0.76 1.10 1.41 0.92 0.77 0.64Professional, scientific, and technical services 0.64 0.77 0.94 1.26 1.18 0.82 0.82 0.71 0.96 0.81 0.72 0.71 0.65Management of companies and enterprises 1.11 0.48 1.00 1.19 1.54 0.36 0.64 0.54 0.46 0.59 0.48 1.83 0.81Administrative and Support and Waste Mang and Remediation Srvs 0.99 1.06 1.11 0.94 1.25 1.18 1.03 0.78 0.79 0.81 0.80 0.87 0.67Educational services 0.77 1.02 0.79 0.76 1.34 1.16 0.54 0.77 1.20 1.00 1.02 0.84 0.91Health care and social assistance 1.22 1.39 1.22 1.05 1.15 0.90 1.24 1.31 1.23 1.43 1.20 1.09 1.23Arts, entertainment, and recreation 0.95 0.85 1.02 1.07 0.87 0.84 0.75 1.11 0.81 1.16 0.65 0.77 0.91Accommodation and food services 1.16 0.88 0.85 1.13 1.00 1.51 0.93 1.13 1.30 1.32 1.02 1.05 0.98Other services (except public administration) 0.91 1.19 1.03 0.86 1.07 0.91 0.97 1.04 1.01 1.01 0.93 1.06 1.19

SHIFT-SHARE ANALYSIS

• Local economic growth has a number of causes.• In many cases, local businesses enjoy a

competitive advantage, and growth within that industry spurs growth in the entire economy.

• In other cases, local industry growth simply mirrors national trends.

• Thus, the ability to separate local growth factors from national growth factors is an important aspect of understanding your local economy.

SHIFT-SHARE ANALYSIS (cont.)

• Shift-share analysis dependent on 3 components:

national growth share

industrial mix share

local share

NATIONAL GROWTH SHARE (NGS)• Refers to local job growth that is attributable to national

economic growth.• Specifically, if the nation is experiencing employment

growth, it is reasonable to expect that this growth will positively influence your area.

• This component describes the change that would be expected due to the fact that the local area is part of a dynamic economy.

• Equal to the number of jobs lost or gained in a region if total employment in the region had changed at the same rate as overall national employment.

• NGS Calculation = Industry Employment * National Average Growth Rate of Total Employment

INDUSTRIAL MIX SHARE (IMS)• This component helps you determine if the

local industry is weighted toward industries that are growing faster (slower) than the national average.

• IMS Calculation = Local Industry Employment * (national industry growth rate – national average growth rate)

• A positive (negative) IMS number means that the local economy/industrial sector grew faster (slower) than the national average, independent of the national influence.

LOCAL SHARE (LS)• Often interpreted as indicating whether local

businesses are more or less competitive than the national average.

• LS Calculation = local industry employment * (local industry growth rate – national industry growth rate)

• LS Interpretation the number of jobs gained (lost) is attributable to its relative competitive position; i.e., the city itself created a greater (lesser) share of employment growth than the nation did on average.

TOTAL INDUSTRY EMPLOYMENT COMPONENTS

Total Employment Change = NS + IMS + LS

(PRELIMINARY) SHIFT-SHARE ANALYSIS

• National Growth Share (NGS) = 390

• Industry Mix Share (IMS) = 84

• Local Share Calculation (LS) = -1235

• Total Employment Change = 390 + 84 -1235 = -761

THANK YOU! YOU’VE BEEN A DAWG-GONE GREAT AUDIENCE!

Andrew “Andy” Carswell (706) 542-4867 carswell@uga.edu