Archive for the 'Regional' Category

New Guide Helps Regional Developers, Planners Navigate RIMS II

Published November 6, 2012 BEA News , Regional , RIMS Leave a Comment
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People who conduct or examine local or regional economic impact studies will want to read a new handbook that offers some dos and don’ts on using the Bureau of Economic Analysis (BEA) Regional Input-Output Modeling System (RIMS II).

RIMS II, a regional economic model, is most frequently used by investors, regional planners, and government officials to gauge the economy-wide impact of a change in economic activity on a local community or a particular region of the country.

The new user’s guide, titled “RIMS II: An Essential Tool for Regional Developers and Planners,” has many useful features, including:
• Nearly a dozen case studies illustrating important concepts and applications of RIMS II multipliers
• Step-by-step instructions on how to appropriately use RIMS II multipliers for many different applications
• Techniques and suggestions to overcome limitations due to missing information

One case study details a university in Austin, Texas, that decides to offer a new graduate studies program. This new program is expected to generate an additional $10 million in payments to the university and draw students from all over the country.

Using the multipliers produced by RIMS II, the new program is expected to result in $21.9 million in new sales in Austin, including the $10 million received by the university. The remaining $11.9 million in sales comes from new purchases the university is expected to make and from new university workers spending more. For example, sales are expected to grow by $97,400 for professional and technical services and $87,800 for information services.

The RIMS II model is tailored to each customer’s needs, and its multipliers are available from BEA for a small processing fee. The new user’s guide is available on the RIMS II Web site.

BEA Regional Data Used to Distribute Federal Funds to State, Local Governments

Published October 12, 2012 BEA News , Regional Leave a Comment
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Did you know that Bureau of Economic Analysis (BEA) regional economic statistics, such as the annual state personal income statistics released September 25, 2012, are used to allocate billions of dollars in federal funds to state and local governments?

In fiscal year 2011, more than $339 billion in federal funds were distributed under programs using U.S. Bureau of Economic Analysis statistics in funding formulas.

Each year, BEA collects information and reports on the amounts distributed by federal programs using BEA regional economic statistics. BEA recently released reports detailing the allocation of amounts distributed in fiscal year 2011. The information can be found on BEA’s Web site under “Uses of the Regional Program Estimates”.

The use of BEA regional economic statistics in federal funding formulas is only one of the important uses of these data and is just one reason why the accuracy and timeliness of these statistics are so important.

BEA Updates Tool Used by Investors, Planners; Here’s How RIMS II Works

Published October 3, 2012 BEA News , Regional , RIMS Leave a Comment
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The Bureau of Economic Analysis (BEA) updated its Regional Input-Output Modeling System (RIMS II), a tool used by investors, regional planners, and government officials to gauge the impact of a change in economic activity on a local community or a particular region of the country. The update incorporates new information from both BEA’s industry and regional economic accounts.

The premise of RIMS II is that an initial change in economic activity leads to additional changes in economic activity in other industries or sectors of an economy—for example, an increase in furniture manufacturing leads to more production of wood and textile products. The increased production of wood and textile products, in turn, leads to more logging. Workers benefiting from these increases may also spend more, which adds to economic activity.

To account for the relationships between industries and households, RIMS II uses information from BEA’s industry accounts. These accounts include the “recipes” of goods and services used by industries to produce their own products—for example, they show how much manufacturers spend on wood and textile products to produce furniture. These accounts also show how much households spend on particular goods and services.

RIMS II uses the relationships from BEA’s industry accounts data, but adjusts them using regional economic data to account for the fact that many of the goods and services purchased by local industries and households are “imported” from outside a given region—for example, a local furniture manufacturing industry may need to purchase lumber that’s imported from another region. These imports result in money “leaking” out of the economy because they don’t aid local economic activity.

The adjusted relationships are then used to calculate “multipliers,” which can be used to estimate the total effect that an initial change in economic activity has on a region. This total effect can be measured in terms of output (sales), value added (gross domestic product), earning, or jobs (full and part time).

The RIMS II update replaces the 2008 data from BEA’s industry and regional economic accounts previously used in the model with data for 2010. This means that the updated multipliers will reflect more recent recipes used by industries. The updated multipliers will also reflect more recent changes in local supply conditions, including changes for economies that may have grown and now import less to satisfy their own production and consumption needs.

The RIMS II model is customized for each customer’s needs, and its output is available from BEA for a small processing fee. More information is available on the RIMS II Web site.

Learn More About the Ocean and Great Lakes Economy on BEA’s New Web Portal

Published August 31, 2012 BEA News , Input-Output , Regional , RIMS Leave a Comment
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How many jobs are created from the construction of a new bridge or an increase in tourism?

The Bureau of Economic Analysis’ (BEA) new Web portal on the ocean and Great Lakes economy shows how the Bureau’s Regional Input-Output Modeling System (RIMS II) can be used to provide answers to such questions. The new Web site stems from a joint project with the Commerce Department’s National Oceanic and Atmospheric Administration.

RIMS II, a regional economic model, is used by investors, planners, and elected officials to objectively assess the returns to projects ranging from a new sports stadium to a new bridge. The returns include the short- and long-term increases in jobs and spending associated with the projects.

The idea behind the results of RIMS II is that an initial change in economic activity leads to additional changes in economic activity in other parts of an economy—for example, building a new bridge leads to increased production of concrete and steel. The increased production of concrete and steel leads to more mining. Workers benefiting from these increases may also enjoy bigger paychecks, so they may then spend more by eating out at nicer restaurants or splurging more on entertainment.

Planners and policymakers use RIMS II to compare the regional impacts that are likely to occur from proposed projects. That helps them make decisions related to the allocation of resources. That’s why RIMS II appears on the new Web site, which showcases BEA’s regional information on the ocean and Great Lakes economy. Findings based on the model are typically reported in “economic impact studies,” which are cited to support major spending decisions by both the public and private sectors.

The new Web portal highlights the wide range of questions that can be answered with the help of RIMS II. Here are a few of them:

  • How many jobs are supported by the fish processing industry in Bellingham, WA?
  • How much will workers’ earnings increase if an additional 500,000 tourists visited Myrtle Beach, SC, because of a developmental project to beautify its beaches?
  • How much will workers’ earnings increase solely from the new spending of these tourists at local retail stores?
  • How much will workers’ earnings increase if a new $2.5 million bridge was built to improve access to a public beach in St. Augustine, FL?

The examples also provide tips on how RIMS II can most effectively be used. The bridge example shows how the model can account for the specific details related to a particular construction project. Because the proposed bridge will be built out of precast concrete parts, the labor costs are relatively low for the cost of the project. By using the “bill-of-goods” method, the resulting estimate reflects the smaller impact the project will have on workers’ earnings across the region.

You can find the answers to the questions posed above by visiting the new portal for the ocean and Great Lakes economy. Additional information for RIMS II is also available on the BEA Web site.

What is the U.S. Bureau of Economic Analysis?

Published May 22, 2012 BEA News , GDP , Industry , International , National , Regional , Survey of Current Business Leave a Comment
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The U.S. Bureau of Economic Analysis, a unit of the U.S. Department of Commerce, is the federal agency responsible for measuring the U.S. economy, or as some say, BEA is the nation’s accountant. It is responsible for measuring what is produced, what is earned, and how it is spent.  BEA is well known as one of the world’s premier economic statistical agencies, producing some of the most closely watched economic indicators and leading the way in cutting-edge macroeconomic measurement.

Each month, the Bureau pulls together a wealth of data from the public and private sector to provide a comprehensive and consistent picture of economic activity for the nation as a whole and for its various sectors. In addition, the Bureau produces data on U.S. economic interactions with the rest of the world, such as trade and international investment.  These data are considered among the most timely, relevant, and accurate in the world.

BEA is somewhat unique among federal agencies in that it is made up of, and lead by, an entirely career staff; it employs no political appointees. This is done, in part, to ensure the integrity and the perception of the integrity of the nation’s key economic indicators.

The data that BEA produces allow businesses, agencies, researchers, and the American people to better understand what is going on in the U.S. economy. That information is used by people to make financial decisions like whether to buy a home, while businesses rely on the data to make decisions about capital investments and hiring.
  
BEA produces a wide variety of economic statistics through its national, international, regional, and industry accounts. Probably the most common and one of the most important is gross domestic product, or GDP.  GDP is the measure of the total value of all final goods and services produced within the United States during a given period of time. It looks at the activity of consumers, businesses, government agencies, and imports and exports. It is the primary measure of growth in the economy. In the first quarter of 2012, GDP exceeded $15 trillion. (Adjusted for inflation, GDP topped $13.5 trillion.)  
GDP and the related BEA accounts are used for a wide variety of economic policy purposes. 

For example:

  • GDP accounts are used by the Administration and Congress to prepare the federal budget projections.  
  • GDP accounts are used by the Federal Reserve Board to formulate monetary policy. Two of the most important variables guiding monetary policy are real GDP growth and inflation as measured by BEA’s personal consumption expenditures price index.
  • BEA regional data are used to distribute more than $327 billion in federal funds for Medicaid, Title I Education Grants, the Children’s Health Insurance Program, and other programs to state and local governments.

In addition to GDP, BEA produces other economic indicators and posts them on its Web site.  You can explore these statistics through the interactive data tables or through the archive of the Survey of Current Business, the Bureau’s monthly journal.

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