Lukas Brun & Bill Lester Center on Globalization, Governance & Competitiveness

Duke University October 19, 2012

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©2013 Duke CGGC

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Overview

• Summary of Methods, Key Terms, and Activities Modeled

• Summary Impacts

• Results by Major Activity

• Fiscal Impacts

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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

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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

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Activities Modeled

• Visitor Spending

• HPMA budgeted expenditures

• Vendor Spending

• Furniture and related sales from the Market

• Rental income from vendor leasing

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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

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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

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Fiscal Impact

Type Amount

Federal $327 Million

State of North Carolina $123 Million

Guilford/High Point $25.5 Million

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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

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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

Activity 2: HPMA Budget

• Modeled direct annual spending of the HPMA

• Categorized budget into transportation, parking, marketing and general organizational services

• Excluded capital expenditures

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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

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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

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

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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

©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

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

THANK YOU

Questions?

Lukas Brun Senior Research Analyst lukas.brun@duke.edu