This presentation was given to the Valdosta/Lowndes County, GA Chamber of Commerce in Spring 2012. The presentation tracked industry growth by specific employment sectors and compared them against similar measures from more than a dozen "sister counties" throughout the Southeast U.S.
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Shift Share and Location Quotients: An Industry Sector Analysis
1. 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, 2012
Valdosta, GA
9. OVERALL NET IN-/OUTMIGRATION, 2003 - 2009
Variable
Wayne Morgan Forrest Florence Floyd Clarke
Lee
Ouachita Rapides Nash
Lowndes Montgomery
Houston
County, County, County, County, County, County,
County, County, County, County,
County County, AL
County, GA
NC
AL
MS
SC
GA
GA
AL
LA
LA
NC
Net work
force
-4805
expansion
(contraction)
-3142
-2773
-1719
-868
-827
-816
-476
Source: U.S. Census Bureau County Business Patterns
1178
1807
2701
2955
2957
10. 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.
11. 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)
12. Variable
Agriculture, forestry,
fishing and hunting
Mining
Utilities
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation and
warehousing
Information
Finance and
insurance
Real estate activities
Professional,
scientific, and
technical services
Management of
companies and
enterprises
Administrative and
Support and Waste
Mang and
Remediation Srvs
Educational services
Health care and
social assistance
Arts, entertainment,
and recreation
Accommodation and
LOCATION QUOTIENTS BY INDUSTRY Florence
Rapides Ouachita Forrest
Lee Morgan Floyd Houston Clarke
Nash Wayne
Lowndes
Montgomery
County, County, County,
County, County, County, County, County, County, County, County,
County, AL
County
LA
LA
MS
AL
AL
GA
GA
GA
SC
NC
NC
0.83
1.32
1.57
1.81
1.32
0.84
0.98
0.95
1.28
0.97
1.25
0.83
0.83
0.96
1.33
0.72
0.82
0.90
0.98
1.14
0.73
1.14
0.87
1.20
0.94
1.10
1.09
1.08
0.76
1.10
1.41
0.92
0.77
0.64
0.82
0.71
0.96
0.81
0.72
0.71
0.65
0.36
0.64
0.54
0.46
0.59
0.48
1.83
0.81
1.25
1.18
1.03
0.78
0.79
0.81
0.80
0.87
0.67
0.76
1.34
1.16
0.54
0.77
1.20
1.00
1.02
0.84
0.91
1.22
1.05
1.15
0.90
1.24
1.31
1.23
1.43
1.20
1.09
1.23
1.02
1.07
0.87
0.84
0.75
1.11
0.81
1.16
0.65
0.77
0.91
1.06
0.98
0.88
1.25
0.14
1.17
0.86
0.72
0.80
1.09
0.55
0.40
0.91
0.98
1.03
0.90
1.04
0.91
0.87
0.99
0.81
0.89
0.98
0.97
0.23
0.49
0.66
0.78
0.68
1.11
0.89
0.65
0.50
0.68
1.16
1.04
0.57
1.05
0.39
1.14
1.03
1.04
0.58
1.88
0.72
1.45
0.75
1.30
1.28
0.97
0.69
0.34
1.20
0.23
0.38
0.76
0.64
0.83
0.64
1.15
1.00
0.59
0.77
1.02
0.65
1.09
0.85
0.76
0.75
1.17
0.87
0.89
0.92
0.82
0.76
0.73
0.50
0.63
0.89
1.12
1.15
1.05
1.08
0.86
0.94
1.07
0.99
1.00
0.97
1.34
1.04
1.23
0.87
0.64
0.77
0.94
1.26
1.18
0.82
1.11
0.48
1.00
1.19
1.54
0.99
1.06
1.11
0.94
0.77
1.02
0.79
1.22
1.39
0.95
0.85
2.03
0.27
0.75
0.52
0.90
1.57
1.26
0.36
1.07
0.72
0.84
1.18
13. 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.
14. SHIFT-SHARE ANALYSIS (cont.)
• Shift-share analysis dependent on 3
components:
national growth share
industrial mix share
local share
15. 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
16. 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.
17. 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.