Direct Economic Effects in Monetary Units
Four columns of results are provided for the economic activity display.
- Total Economic $mill
- Value Added $mill
- Direct Economic $mill
- Direct Economic %
Sort the table by the "Direct Economic $mill" column so that sectors are displayed in descending order of direct dollars. The Direct Economic effects represent the monetary amounts purchased by the Auto Manufacturing sector to make their product. So, it makes sense that sectors such as Motor vehicle parts manufacturing, Other engine equipment manufacturing, Tire manufacturing, and Glass and glass products, except glass containers are in the top ten. You also see service related sectors whose "output" the Auto Manufacturing sector needs in order to produce a car. These include Wholesale trade (companies that coordinate purchasing, warehousing, and transport of goods), Truck transportation, and my personal favorite, Lessors of nonfinancial intangible assets (companies that provide services related to the use of brand images, such as the Auto Manufacturing company logos and hood ornament design).
The Auto Manufacturing sector is at the top of this list. The Direct Economic effects for the Auto Manufacturing sector is $1.01 million. This includes the $1 million of economic activity entered for the Auto Manufacturing sector, as well as $0.01 million of purchases within the sector. Since the model represents purchases of industry sectors, this $0.01 million represents purchases by facilities in this sector from other facilities also in this sector. For example, a facility might manufacture entire cars but also chassis which are sold to another facility.
For Motor vehicle parts manufacturing, the Direct Economic effects are $0.461 million, or for every $1 million dollars in automobiles produced, $0.461 million of parts are purchased (or, 46 cents worth of parts are purchased for every one dollars worth of vehicle produced). Continuing down the sector list are other sectors such as Carpet and rug mills (0.003 cents for every $1 of autos), and Power generation and supply (0.002 cents for every $1 of autos).
If you add up all the values in the Direct Economic $mill column, the total will equal $1.84 million, shown in the first row, "Total for all sectors." Again, this value includes the $1 million of economic activity entered for the Auto Manufacturing sector, so the sector purchases $0.84 million worth of products to make $1 million of output. The difference between the $1 million of output and the $0.84 million in purchases is $0.16 million. This represents the Value Added by the Auto Manufacuturing sector ($0.157 million in the results table).
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