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The Economic Impact of the High Point Market

The Duke University Center on Globalization, Governance & Competitiveness (Duke CGGC) was engaged by the High Point Market Authority (HPMA) to conduct a comprehensive economic and fiscal impact of the High Point Market located in High Point, North Carolina. Duke CGGC researcher Lukas Brun presented at the High Point Market Press Breakfast on October 18, 2013.

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The Economic Impact of the High Point Market

  1. 1. Lukas Brun & Bill Lester Center on Globalization, Governance & Competitiveness Duke University October 19, 2012
  2. 2. Website:http://cggc.duke.edu/
  3. 3. ©2013 Duke CGGC Recent Clients
  4. 4. Overview • Summary of Methods, Key Terms, and Activities Modeled • Summary Impacts • Results by Major Activity • Fiscal Impacts © 2013 Duke CGGC
  5. 5. Methods • Goal: Calculate the economic activity generated annually by the High Point Market – capture all impacts associated with the Market – activity that would not have occurred ‘but-for’ the Market • Study area: 75 mile radius from High Point, NC – includes 22 NC counties and 8 in VA • Methodology: – IMPLAN 3.0 (IMpact Analysis for PLANners) software – Original Survey • Web-based survey of 1,668 companies conducted July 3-16, 2013. • Key purposes of the survey: – Estimate sales figures generated at the Market – Estimate vendor & visitor spending figures by major category – Estimate share of companies that manufacture within the study area – Supplementary data from HPMA and NC Dept. of Commerce © 2013 Duke CGGC
  6. 6. Key Terms • Direct: Impacts resulting from the increase in final demand in a given economic sector • Indirect: Impacts resulting from industry to industry purchasing (i.e., business to business/supplier relationships) • Induced: Impacts resulting from increases in household spending © 2013 Duke CGGC
  7. 7. Activities Modeled • Visitor Spending • HPMA budgeted expenditures • Vendor Spending • Furniture and related sales from the Market • Rental income from vendor leasing © 2013 Duke CGGC
  8. 8. Total Economic Impact: $5.39 Billion Category Amount Visitor Spending $ 604 Million HPMA Spending $ 8 Million Vendor Spending $ 452 Million Furniture Sales $4,229 Million Vendor Rents* $ 95 Million Total $ 5.39 Billion * local portion only © 2013 Duke CGGC
  9. 9. Jobs Created Category # of Jobs Visitor Spending 6,189 HPMA 90 Vendor Spending 4,374 Vendor Rents 832 subtotal 11,485 Furniture Sales 26,131 Total 37,616 © 2013 Duke CGGC
  10. 10. Fiscal Impact Type Amount Federal $327 Million State of North Carolina $123 Million Guilford/High Point $25.5 Million © 2013 Duke CGGC
  11. 11. Activity 1: Visitor Spending • In 2012, the HP Market attracted 150,000 visitors • GIS analysis of zip codes indicated that 116,000 were non-local • Resulting in 622,762 visitor days per-year • Used NC Dept. of Commerce Tourism figures for average visitor spending © 2013 Duke CGGC Impact Type Employment Labor Income Value Added Output Direct Effect 4,040 $109,749,029 $185,402,534 $354,801,848 Indirect Effect 1,026 $43,208,450 $69,970,714 $124,415,437 Induced Effect 1,124 $42,165,380 $75,806,342 $124,927,343 Total Effect 6,189 $195,122,859 $331,179,591 $604,144,628
  12. 12. Activity 2: HPMA Budget • Modeled direct annual spending of the HPMA • Categorized budget into transportation, parking, marketing and general organizational services • Excluded capital expenditures © 2013 Duke CGGC Impact Type Employment Labor Income Value Added Output Direct Effect 63 $1,826,935 $2,741,970 $4,648,565 Indirect Effect 10 $405,625 $676,379 $1,179,450 Induced Effect 17 $618,145 $1,112,560 $1,832,122 Total Effect 90 $2,850,705 $4,530,909 $7,660,138
  13. 13. ©2013 Duke CGGC Activity 3: Vendor Expenses • Figures obtained directly from survey – Construction/venue set up $211,186,800 – Photography $39,858,581 – Printed materials $25,568,060 – Other marketing expenses $47,685,725 – Catering $24,006,169 Impact Type Employment Labor Income Value Added Output Direct Effect 2,808 $100,098,361 $133,432,002 $278,256,098 Indirect Effect 632 $26,534,879 $40,460,372 $69,652,303 Induced Effect 934 $35,006,279 $62,980,188 $103,741,166 Total Effect 4,374 $161,639,519 $236,872,561 $451,649,567
  14. 14. Activity 4: Market Sales • Used survey response data to calculate the total sales garnered from the market (or within 90 days) Impact Type Employment Labor Income Value Added Output Direct Effect 13,920 $630,760,911 $1,111,034,805 $2,680,148,872 Indirect Effect 5,624 $268,274,110 $426,515,902 $816,681,056 Induced Effect 6,587 $247,255,774 $444,259,652 $732,421,143 Total Effect 26,131 $1,146,290,795 $1,981,810,359 $4,229,251,072 © 2013 Duke CGGC
  15. 15. Activity 5: Rental Income • Expert interview with Major Leasing Company Associate who controls 5.4 million sq. ft. • Total: Calculated as IMPLAN industry impact for Real Estate Establishments • Allowed IMPLAN to estimate share of local ownership Impact Type Employment Labor Income Value Added Output Direct Effect 630 $6,830,623 $51,166,612 $71,500,257 Indirect Effect 122 $4,050,589 $8,334,727 $14,493,809 Induced Effect 80 $3,013,160 $5,423,373 $8,930,813 Total Effect 832 $13,894,371 $64,924,712 $94,924,879 © 2013 Duke CGGC
  16. 16. ©2013 Duke CGGC North Carolina Fiscal Impact Type of Tax Amount (2013$) Sales Taxes $44,031,909 Income Taxes $32,399,763 Dividends $19,537,895 Other Taxes on Production and Imports $15,331,823 Corporate Profits Tax $7,616,622 Social Insurance Taxes $2,398,406 Motor Vehicle License Revenue $1,883,210 Total State Revenue $123,199,628
  17. 17. Guilford/High Point Fiscal Impact • Includes both county and municipal governments • Excludes impact of furniture sales (Activity 4) • Modeled impact of 75% (by assumption) of Visitor and Vendor Spending in Guilford County • Adjusted sales tax for local portion (2% local / 4.75% state) Type of Tax Amount (2013$) Sales Taxes (local portion only) $6,649,286 Property Taxes $17,246,014 Fines and Fees $1,586,886 Other Personal Taxes/License revenue $49,923 Total Guilford County $25,532,109 © 2013 Duke CGGC
  18. 18. THANK YOU Questions? Lukas Brun Senior Research Analyst lukas.brun@duke.edu

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