Summary Background

REGIONAL ECONOMIC ANALYSIS

The following outlines various economic analyses conducted as part of this CEDS planning process. These include the inflow and outflow of workers and wages, location quotients, industry shift-share and retail gaps. Collectively, these anecdotal analyses provide a clearer picture of the region’s industries and workforce, which provide the various Economic Development Organizations and Networks Northwest the information needed to make effective decisions towards a sustainable economy.

INFLOW & OUTFLOW OF WAGES

One important data point in understanding the economy for a defined area is where people work versus where they live. This can illustrate a range of phenomena that can further explain the various counties’ character and existing conditions. A wages inflow and outflow chart, Figure 1 below, displays this work location and residence location relationship for the 10 counties part of Network’s Northwest’s planning region. A further description of the wage flow can be found in Appendix D. The flow of workers throughout the region can also be found in Appendix D. All data obtained from the Bureau of Economic Analysis. Inflow is the money earned by residents who work outside of the county. Outflow is the money earned at jobs within the county by people living outside the county. Net Residence Adjustment is the result of subtracting gross earnings outflow from gross earnings inflow. 

LOCATION QUOTIENT ANALYSIS

The location quotient analysis is a measure of how concentrated an industry is in the local economy. Knowing the LQ score for various industries can help the municipality: 1) to determine which industries make the local economy unique, 2) to identify which industries the locality is exporting, 3) to identify emerging export industries that are starting to bring economic activity into the local market, and 4) to identify export industries that have the potential to threaten the region’s economic base. Location Quotient = (Local Industry Employment / Total Local Employment) / (National Industry Employment / Total National Employment) The results of this Location Quotient Analysis, provided by the Bureau of Labor Statistics, can be found below.

The location quotient analysis is a measure of how concentrated an industry is in the local economy. Knowing the LQ score for various industries can help the municipality: 1) to determine which industries make the local economy unique, 2) to identify which industries the locality is exporting, 3) to identify emerging export industries that are starting to bring economic activity into the local market, and 4) to identify export industries that have the potential to threaten the region’s economic base.

Location Quotient = (Local Industry Employment / Total Local Employment) / (National Industry Employment / Total National Employment)

A score of 1.0 means that the concentration of that industry in the county is equal to the concentration of that industry in the entire US. Industries with a score higher than 1.0 typically make up the local economy and can help determine what makes the local economy unique. However, it’s also important to consider the LQ score in conjunction with the number of establishments and employees and wages to truly glean how important that industry is to the local economic base. Most localities strive to have many sectors with a LQ score greater than 1. This is an indicator that the economic base is diverse and not relying heavily on one or two industries (think Detroit and automobile manufacturing). LQ scores lower than 1 can help identify sectors to target for growth. Learn more about Location Quotient in Appendix E.

SHIFT-SHARE ANALYSIS

The shift-share analysis is used to show the growth of major industries for a particular area, in this case counties, and how each industry has changed as a proportion of all local employment. The tables in this section display each of the major industries, their total employment for the respective county from 2010- 2019, the degree to which that total has changed in the last decade, as well as the percent share of employment that each industry represents and how that has changed over the decade. The results of the shift-share analysis, provided by the Michigan Regional Economic Analysis Project (REAP), can be found in Appendix F. All data obtained from the Michigan Regional Economic Analysis Project.

RETAIL GAPS

The retail marketplace profile shows the degree to which the region is importing and exporting certain goods and services. A positive retail gap (demand exceeds supply) indicates residents in the community must leave the area (10-county region) to acquire this good or service. This would be considered an import industry. A negative retail gap indicates that people from outside of the region come to the region to purchase a particular good or service (supply exceeds demand). This is called an export industry. Top 5 Industry Sub-Sectors by County Fairly consistent with heavily tourism-based communities, northwest Michigan has a negative retail gap for almost all of their retail goods and services, with a few exceptions. Most of the import goods and services are in retail industries now heavily dominated by on-line retailers. The full retail marketplace profile can be found in Appendix G. All data obtained from ESRI Business Analyst.

Top 5 Industry Sub-Sectors by County

ANTRIM

  • Crop Production
  • Machinery Manufacturing
  • Accommodation
  • Unclassified
  • Beverage & Tobacco Product Manufacturing

CHARLEVOIX

  • Plastics & Rubber Product Manufacturing
  • Accommodation
  • Utilities
  • Computers & Electronic Product Manufacturing
  • Amusements, Gambling and Recreation

GRAND TRAVERSE

  • Textile Product Mills
  • Beverage & Tobacco Product Manufacturing
  • Machinery Manufacturing
  • Building Material & Garden Supply Stores
  • Furniture & Home Furnishing Stores

LEELANAU

  • Beverage & Tobacco Manufacturing
  • Crop Production
  • Construction of Buildings
  • Unclassified
  • Miscellaneous Store Retailers

MISSAUKEE

  • Animal Product Production
  • Forestry & Logging
  • Wood Product Manufacturing
  • Truck Transportation
  • Gasoline Stations

BENZIE

  • Accommodation
  • Food Manufacturing
  • Gasoline Stations
  • Building Material & Garden Supply Stores
  • Amusements, Gambling, and Recreation

EMMET

  • Accommodation
  • Building Material & Garden Supply Stores
  • Beverage & Tobacco Product Manufacturing
  • Amusements, Gambling and Recreation
  • Construction of Buildings

KALKASKA

  • Heavy & Civil Engineering Construction
  • Fabricated Metal Product Manufacturing
  • Crop Production
  • Unclassified
  • Gasoline Stations

MANISTEE

  • Forestry & Logging
  • Gasoline Stations
  • Amusements, Gambling, and Recreation
  • General Merchandise Stores Utilities

WEXFORD

  • Forestry & Logging
  • Plastics & Rubber Products Manufacturing
  • Transportation Equipment Manufacturing
  • Truck Transportation
  • Fabricated Metal Product Manufacturing