Shift-Share Analysis - Report Example

Shift-Share Analysis Name: Institution: Introduction On a wider perspective, Shift-Share Analysis has been used by most economic policy makers to determine the strength of their economies and to recommend on the possible favorable policies that can be used further to make economies more promising (Herbert-Cheshire, 2000, p. 127). This analysis is restricted in to smaller geographical coverage generally to investigate and examine the economic performance of regions conventionally referred to as distinct geographical locations. To this end, the paper will focus on the Armidale Local Government Area in particular Armidale Dumaresq through the critical analysis of the Australian Bureau of Statistic data for the period between 2006 and 2011 in particular emphasis will be exerted on regional labor market will form our center stage aiding in the analysis of Armidale State employment growth. To add on this, a close linkage will be made between employment and job creation in regard to regional economic performance based on industrial employment share in Australia by comparing the regional growth between Armidale and New South Wales. The paper in a nutshell, aims at comparing and contrasting the Australian industries in terms of their ability to absorb labor force as well as the its associated contribution to the economy. With this in mind, the analysis discuses Armidale’s regional employment growth based on the following three sessions, industry mix contribution, regional employment growth attached to national growth as well as other distinct factors within the region (Reynolds, 1980, p. 154). It is worth noting that the paper seeks to unearth the distinction between the regional economic performance as an independent variable in relation to the influence by the national trend based on the analysis of particular features of a given local region that determines the rate of employment and resulting job generation ability. The following formulae will be inevitable in this analysis and are subsequently stated for further references National growth= 10410-10063= 347 and Nation growth rate is 3.4% Total employment for Armidale region= regional share-total shift Total shift= structural component/industry mix effect+ differential component Regional employment growth= national growth+ growth attached to regional IM+ growth due to other regions. Therefore, the above formulae will be used to compute the industrial mix and the total employment as well to aid in the analysis and the interpretation of the results. The table above shows the shift share analysis of the female and male persons above the age of 15 years based on the 2011 census Australian at Armidale Dumaresq Male Female Total industry 2006 2011 2006 2011 2006 2011 change % Agriculture,Forestry & fishimg 466 452 210 185 676 637 -39 -5.7 Mining 26 29 0 4 26 33 7 26.9 Manufacturing 237 238 96 75 333 313 -20 -6 Electricity,gas,water &waste services 58 83 9 6 67 89 22 32.8 construction 512 542 67 63 579 605 26 4.5 Wholesale trade 170 180 75 77 245 257 12 4.9 Retail trade 575 586 658 719 1233 1305 72 5.8 Accommodation and food services 405 413 545 496 950 909 -41 -4.3 Transport, postal and warehousing 171 196 39 38 210 234 24 11.4 Information media telecommunication 77 60 53 47 130 107 -23 -18 Financial and insurance services 100 60 132 153 232 290 58 25 Rental, hiring and real estate services 59 49 44 69 103 118 15 14.6 Professional, scientific &technical services 318 321 263 286 581 607 26 4.5 Administrative & support services 103 116 115 116 218 232 14 6.4 Public administrating and safety 375 336 208 193 583 529 -54 -9 Education and training 850 849 1265 1289 2115 2138 23 1.1 Healthcare and social assistance 253 306 860 1059 1113 1365 252 22.6 Arts and recreation services 86 60 64 56 150 116 -34 -11.6 Other services 171 185 166 180 337 365 28 8.3 Inadequately described not stated 117 100 65 61 182 161 -21 -11.5 Total employment 5129 5238 4934 5172 10063 10410 347 3.4 Interpretation of Data analysis Contribution of each Industry to the National Economy The discussion is based on the industries comparison in terms of the performance and the amount of population share attached to each industry. The paper will thus select at least six different industries that have the highest number of labor force and subjected to a thorough scrutiny which will help us understand the analysis. The following industries will form the basis upon which our analysis will be pegged; education and training (2138), health and social assistance (1365), retail trade (1305), accommodation and food services (909) agriculture, forestry and mining (637) Education and Training Industry A critical examination of the industries reveals that education and training sectors takes the lion share of the total number of workers that are employed. 2138 persons were employed at the close of year 2011 which was an increased from the previous figure of 2115 indicating an increase of 23 workers which showed a growth rate of positive 1.1 %. By examining the proportion that education sector employ in relative to the total employment at 2011, this number shows about 20.5% of work force emanate from education and employment industry. Health and Social Assistance Industry Secondly we look at the health and social assistance industry that employs a total number of 1365 workers which is 13.1% of the total workforce and having increased by 252 workers from the 2006 figure showing an industrial growth in terms of employment of 22.6% being the highest sector that greatly grew (Hughes, Kaldor, Bellamy & Castle, 2007, p. 156). This indicates that more people were employed in the healthcare and social assistance industry which facilitated its growth. Retail Trade Industry The third industry to be analyzed will be the retail trade industry that had a total number of 1305 workers at the close of the year 2011 which saw an increase of 72 an increase of 5.8% from the previous workers being employed in the period between 2006 and 2011. A close examination of the retail trade industry based on the total number of employment in Armidale reveals that this industry contributes to 12.5% of the whole population that is employed in this local government area of Armidale Dumaresq. This indicates that more workers were also needed in order to meet the customers demand for the retail goods. Accommodation and food services industry Accommodation and food services industry is ranked fourth in terms of the employment by sex in this region with a total employment of 909 workers in 2011. This shows a decrease of 41workers as shown by the higher previous value of 950 workers. However, this industry contributes much to the Armidale economy as it indicates that 8.7% of total employment comes from the accommodation and food services industry. Comparing the number employed in 2006 and 2011, a decline by 41 workers indicates a negative change of 4.3%. National Growth Share At the close of the year 2011, the total number of workers was 10410 with the previous year 2006 being 10063 which showed a growth increase of 347 and thus showed a growth percentage of 3.4 percent (Beer & Pritchard, 2003, p.123). Had the national industries grow at the same rate as the regional industries it would imply that more job placement would have been achieved. This in reality was not the case as indicated by the analysis of the industrial mix table showing the industrial growth within this Local Government Area. Armidale Dumaresq as the basis of analysis is found to contribute so much to the national economy as this indicated by a positive national growth rate of 3.4% with newer job placement of 347. With this in mind, economic policy makers will ensure that the precautions are taken which are geared at ensuring that national economy remains at the interest as it is pegged at the actions and strategies adopted at the industrial level. Industrial Mix This is the growth rate of a particular industry and hence presents the existence of a of a situation in which a particular industry might show a declining trend in its growth but the national average growth rate would remain positive as depicted in this case with a positive 3.4% average growth with such industries as public administration and safety showing a negative 9% growth rate (Kroehn & Beer, 2010, p. 125). It is thus realized that the particular industry fluctuations in growth will have no effect on the national growth rate. From the table the total employment generated within this period is 347. A particular industry’s mix will give it a competitive advantage over others within the region and this will aid in the ranking of the industries. A positive and a higher industrial mix present the center stage upon which the industrial rating is done. We can therefore rank the top five most performed industries as depicted by the computed industrial mix table above as; 1. Electricity, Gas, Water and Waste Service industry at 32.8 percent 2. Mining industry at 26 percent 3. Financial and insurance services 25 percent 4. Healthcare and social assistance at 22 percent Electricity, Gas, Water and Waste Service industry at 32.8 percent This is the best performed industry within this region with the statistical industrial mix and has a comparative shift-share of 32.8 implying that the regional employment would increase increases with the similar magnitude to the national employment level if all the sample region industries would be performing at the same economic rate, but with a significant increase in labor. Therefore, even though the industry retrenchment scheme worked against the national employment duty of industries, it was to the best interest of the industry. The industry will thus shift its employment level up to the point when marginal product equates the marginal revenue. Mining industry at 26.9 percent Mining industry has also performed well in the region as based on the positive industrial mix leading to it being ranked number two. With its industrial mix of 26.9 percent, it is able to perform better when it focuses most of the effort on based within the industrial level as compared to national level and would thus have a competitive advantage to perform its activities within this region. The ability of the firm to employ a positive industrial would mean more pros that cons accruing to this particular industry. Keen interest is further called for to employ more workers in regard to mining industry at the industrial level as compared to national level up to when the marginal costs will be equivalent to the marginal revenue accruing as a result of additional extra worker. Financial and insurance service industry at 25 percent This industry is amongst the first few performing industry shown by the higher value of its mix. It is found to be growing at a rate of 25% percent as depicted by the calculation shown by the table. This is also contributing to the national growth that is also found to be a positive value of 3.4% . The industry is thus best suited to operate at an industrial level as compared to the national level. The total number of the generated employment that is seen to be 347 draws it figures basically from this as one of its sources. Healthcare and social assistance industry at 22 percent Healthcare and social assistance industry is also seen to employ a positive performance as indicated by a higher value of industrial mix of 22 percent. The industry has a total number of 1365 workers at the close of the year 2011 and is seen as mostly contributing in terms of the national employment after the Education and Training industry. This positive figure will indicate that the industry is best suited to produce and sell at the industrial level and thus will continue to employ its workers up to the level when the additional extra benefits resulting from the additional extra cost of employment one more worker are equal. Regional shift This is arrived at by calculating the difference between industrial mix and the national mix. In respect to this case, the regional competition is found to be the cause of national economic performance. Conclusion Through the application of the shift-share analysis the industrial performance are clearly revealed and this will make the policies maker within a given LGA develop and implement policies tailored to meet the particular requirement of the selected region (Brett, 2011, p. 243). At industrial level, computation of the shift-share figures have given the industries top management to adopt strategies that give theme competitive advantages of the others and thus are able to increase their profitability indices which ultimately translates to a regional economic disparities. On a wider perspective, the government policy makers will base their efforts in trying to ensure regional balances based on these computations which is good for generation economic welfare of its people. This will be done based on the adoption and implementation of favorable policies aimed at wealth and income redistribution amongst the citizens. It is therefore very vital for economic policies makers to keep a keen eye at the fluctuations in regional developments in order to achieve sound economic developments. Reference Beer, A., A. Maude and W. Pritchard (2003) ‘Local economic development in resource-based economies’ in Developing Australia’s regions: Theory and practice, UNSW Press. Brett, J. (2011), Fair share: Country and city in Australia, Quarterly Essay. Burnley, I., P. Murphy and R. Fagan (1997), Immigration and Australian Cities, The Federation Press. Gray, I. and G. Lawrence (2002), A Future of Regional Australia: Escaping global misfortune, Cambridge University Press. Herbert-Cheshire, L. (2000), Contemporary strategies for rural community development in Australia: a governmentality perspective, Journal of Rural Studies. Hughes, P., A. Black, P. Kaldor, J. Bellamy and K. Castle (2007), Building stronger communities, UNSW Press, Sydney. Kroehn, M., A. Maude and A. Beer (2010), Leadership of place in the rural periphery: Lessons from Australia’s agricultural margins, Policy Studies. Reynolds, C. W. (1980). A shift-share analysis of regional and sectoral productivity growth in contemporary Mexico. Laxenburg, Austria: Internat. Inst. for Applied Systems Analysis. Read More

By examining the proportion that education sector employ in relative to the total employment at 2011, this number shows about 20.5% of work force emanate from education and employment industry. Health and Social Assistance Industry Secondly we look at the health and social assistance industry that employs a total number of 1365 workers which is 13.1% of the total workforce and having increased by 252 workers from the 2006 figure showing an industrial growth in terms of employment of 22.6% being the highest sector that greatly grew (Hughes, Kaldor, Bellamy & Castle, 2007, p. 156). This indicates that more people were employed in the healthcare and social assistance industry which facilitated its growth.

Retail Trade Industry The third industry to be analyzed will be the retail trade industry that had a total number of 1305 workers at the close of the year 2011 which saw an increase of 72 an increase of 5.8% from the previous workers being employed in the period between 2006 and 2011. A close examination of the retail trade industry based on the total number of employment in Armidale reveals that this industry contributes to 12.5% of the whole population that is employed in this local government area of Armidale Dumaresq.

This indicates that more workers were also needed in order to meet the customers demand for the retail goods. Accommodation and food services industry Accommodation and food services industry is ranked fourth in terms of the employment by sex in this region with a total employment of 909 workers in 2011. This shows a decrease of 41workers as shown by the higher previous value of 950 workers. However, this industry contributes much to the Armidale economy as it indicates that 8.7% of total employment comes from the accommodation and food services industry.

Comparing the number employed in 2006 and 2011, a decline by 41 workers indicates a negative change of 4.3%. National Growth Share At the close of the year 2011, the total number of workers was 10410 with the previous year 2006 being 10063 which showed a growth increase of 347 and thus showed a growth percentage of 3.4 percent (Beer & Pritchard, 2003, p.123). Had the national industries grow at the same rate as the regional industries it would imply that more job placement would have been achieved.

This in reality was not the case as indicated by the analysis of the industrial mix table showing the industrial growth within this Local Government Area. Armidale Dumaresq as the basis of analysis is found to contribute so much to the national economy as this indicated by a positive national growth rate of 3.4% with newer job placement of 347. With this in mind, economic policy makers will ensure that the precautions are taken which are geared at ensuring that national economy remains at the interest as it is pegged at the actions and strategies adopted at the industrial level.

Industrial Mix This is the growth rate of a particular industry and hence presents the existence of a of a situation in which a particular industry might show a declining trend in its growth but the national average growth rate would remain positive as depicted in this case with a positive 3.4% average growth with such industries as public administration and safety showing a negative 9% growth rate (Kroehn & Beer, 2010, p. 125). It is thus realized that the particular industry fluctuations in growth will have no effect on the national growth rate.

From the table the total employment generated within this period is 347. A particular industry’s mix will give it a competitive advantage over others within the region and this will aid in the ranking of the industries. A positive and a higher industrial mix present the center stage upon which the industrial rating is done. We can therefore rank the top five most performed industries as depicted by the computed industrial mix table above as; 1. Electricity, Gas, Water and Waste Service industry at 32.

8 percent 2. Mining industry at 26 percent 3.

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