| Most economic measures
in the national income accounting system are done only at the
county and state levels. Although no economy is isolated and
controls its own destiny, peculiarities can exist at the local
level. Therefore one must interpret county-wide numbers with
knowledge of local economic conditions. One factor that can have
a significant impact on economic analysis is the relatively
large number of manufacturing jobs in Attica with the presence
of Harrison Steel. In addition, due to privacy concerns, data
for the agricultural services, mining, and construction
industries at the county level have been withheld, indicating
either too few employees or too few employers. |
| Location
Quotient Analysis |
| A number often used to
determine the relative strength of an economy is the location
quotient. In a location quotient analysis, the share of each
industry in the total local employment is compared with that
industry’s share of total employment in the State. If the
resulting location quotient is greater than "1," that
industry employs a greater share of the local workforce than it
does Statewide. These industries are said to be
"basic," industries and are particularly important to
the local economy. A quotient of between 0.85 and 1.15 is close
enough to 1 that it is not considered particularly significant.
Due to privacy concerns, data for sub-sectors of basic
industries are incomplete.
Analysis of the Fountain County economy shows that only one
industry in 1998 was basic: manufacturing. During the 1990s the
manufacturing industry grew by 85%. It should be noted that in
1980 the Agricultural Services industry was highly basic with a
quotient of 3.3, but by 1998 had fallen to such low levels that
data cannot even be reported to do privacy concerns. |
|
Figure 1.11: Location quotients for Fountain County from 1980 to
1998. Note that in 1998, data for agricultural services, mining,
and construction has been withheld to avoid disclosure of
personal information.
|
| Employment
by Industry |
| In terms
of employment growth or decline, the only industry to decline at
the State level is mining. The growth leader was agricultural
services, while manufacturing saw only modest growth. This
contrasts with Fountain County’s tremendous growth in
manufacturing and apparent loss in ag. services. Again, notice
data is not reported for the first three industries at the
county level. Although the growth in the manufacturing industry
in the County has brought more high-paying jobs, it raises
economic development concerns. An economy too dependent on a
single sector can suffer drastic consequences should that
industry leave the area. As manufacturing declines nationally,
it is important to maintain a diversified economic base. |
|
Figure
1.12: Employment
by Industry in 1998. County numbers for Agricultural Services,
Mining, and Construction have been withheld to avoid disclosure
of personal information.
|
|
Figure 1.13: Employment changes from 1990 to 1998. County
numbers for Agricultural Services, Mining, and Construction have
been withheld to avoid disclosure of personal information.
|
| Shift-Share
Analysis |
| Another important tool
in analyzing a local economy is the shift-share analysis. This
is used to describe the competitiveness of a local industry as
compared to the state or nation. Figure 1.14 summarizes the
implications of each stage of the shift-share analysis. The
first stage is to apply the overall growth rate of the state
economy to each sector. Between 1990 and 1998 this rate was
16.4%. This gives you the expected employment increase if each
industry grew at the overall rate. The next measure factors in
the growth rate for each industry, which ranged from a 21.2%
loss to a 41.1% growth between 1990 and 1998. The resulting
number is the number of jobs in addition (or subtraction) to the
expected growth due to the overall economy. The final measure
attempts to factor in local industry performance. If the
industry is not following statewide patterns locally, it is due
to local competitiveness. For example, if an industry is growing
statewide but declining locally, it is due to poor local
competitiveness. In Fountain County, most of the positive
employment growth in the manufacturing sector is due to positive
competitiveness. In contrast, most of the negative employment
growth in the transportation and public utilities industry is
due to negative competitiveness. |
Figure 1.14: Summary of the Fountain County-Indiana Shift-Share
Analysis for employment from 1990 to 1998. Note that
County-level numbers are not available for 1998 for Agricultural
Services, Mining, and Construction. |
| Earnings |
| Employment numbers are
not only important, but also how much those jobs pay. Whereas
the manufacturing sector in Fountain County accounts for around
37% of the employment as discussed above, it accounts for half
of all income earned. This indicates higher-paying jobs. On the
other hand, whereas retail trade and services accounted for
about 40% of the employment, they only account for 20% of the
earnings, indicating low-paying jobs. A study by the Indiana
Business Research Center found that, on average in 1996, a
manufacturing job in Fountain County paid $36,663, a service job
paid $13,618, and a retail job paid $10,927. |
|
Figure 1.15: Earnings by Industry in 1998.
|
|
Figure 1.16: Changes in industry earnings from 1990 to 1998.
|
| Unemployment |
| Unemployment in the
County averaged 4% in 1999, compared with 3% for the State. Over
the past decade unemployment has rarely dipped below that of the
state. Statewide rises in unemployment levels are exaggerated at
the County level, usually by two to three percent. The highest
levels usually occur in the winter months. |
|
Figure 1.17: Unemployment levels from 1989 through July 2000.
|
| Commuting
Patterns |
| Nearly 70% of the
residents of Fountain County who work have jobs inside of
Fountain County: the remaining commute outside of the County.
Nearly nine percent commute to jobs in Tippecanoe County, while
nearly the same amount commute into Montgomery County. Of the
almost 11,000 jobs inside Fountain County, nearly 19% are filled
by residents of another county. About eight percent are filled
by residents of Warren County while just over four percent are
filled by Illinois residents, as shown in Figure 1.18. Overall
in 1998, with a labor supply (workers) of 12,458 and a labor
demand (jobs) of 10,623, the county had a deficit of 1,835 jobs. |
Figure 1.18: Commuting patterns in 1998. Overall, nearly 80% of
all jobs in Fountain County are filled by workers who also live
in the County. |
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