Introduction
Shift Share is an economic tool kit that is used by economic analysts to determine how much of region growth attributes to national growth and how is accrued to the unique regional factors. Shift share analysis based to answer the growth of employment in a group of regional industries, that is to say, it measures the growing or declining of employment in the regional industries Reynolds, 1980). This paper tends to examine the shift share analysis of certain industries within a region and subject the calculated figures to the Lab for interpretation.
Discussion
The table below shows the shift share analysis of the Montréal, North American Industry Classification System (NAICS) for various departments within the industry and their respective labor change.
Shift Share Analysis table of employment by economic regions and North American Industry Classification System (NAICS) annual (persons x 1,000)(8,10) for the period 2008-2013, Montréal ,Quebec [2440]
Interpreting the Data Analysis
Interpretation of Data analysis
At the beginning of 2008, 950,000 workers were employed in all the industries of the country, with 107,800 in manufacturing industry, 33,000 workers in construction industry and 140,200 workers in trade industry. In 2013, 967,700 workers in total were employed in all the sectors of industries in the nation.
The selected region of three industries had 281,000 workers in 2008 and 291,300 workers employed in the industries in 2013.
National Growth Share
The state has a total number of workers employed in 2013 was 967,700 workers while the total number of workers employed by the industries is 967,000 workers. This is 700 workers less than the state figure. Therefore, had the national industries grown at the same rate as the state, and then more people would have secured jobs in the industries.
Industrial Mix
There usually exist a difference between a particular industry growth rate and that of the national average. The employment data on the table above indicates that employment by individual industries decreased even though the national employment count increased. Would the individual sector industries’ worker growth rate increased, the state would have had 19,592 more workers employed in the nation’s employment sector.
However, the industrial mix of every industry can gives the individual performance of every industry as a competitive entity on its own to achieve its objectives. These performances can be explained for every industry within the sample region as follows.
Manufacturing industry
Manufacturing industry is the best performing industry of the region. With the statistics of its industrial mix, the industry’s economic performance is higher in the region with a comparative 8.950 shift share. This implying that if all the sample region industries would be performing at the same economic rate, but with a significant increase in labour, then the regional employment shall have increased with a similar percentage to the national employment level. The decrease in labour for the industry from 107,800 workers in 2008 to 104,200 workers in 2013 indicates that the differences that exist contained the excess labour force in the industry. Therefore, even though the industry retrenchment scheme worked against the national employment duty of industries, it was to the best of the manufacturing industry. The industry can then shift its employment level up to a point where there marginal product of labour (MPL) equals to the marginal revenue (MR) of the industry.
Trade industry
The trade industry also performs economically well in the region based on the individual industry performance. Trade industry experienced an industry mix of -4.222 with a regional shift share of 7.94. This implies that trade industry does well that that at the regional level than it does at the industrial level. Trade industry is comparatively better off in regional economic performance because of the quantitative analysis in the regional performance as opposed to the qualitative approach given at the industrial mix. Increase in labour indicates no positive change in the industrial mix. The industry can then move along the employment line until a point where the MPL equal MR.
Construction industry
This is the only industry in the sample region that performs positively at industrial level. It has industrial mix of 1.242 indicating a positive economic growth in the industry and a regional shift share of 2.415. This indicates that employment level of the industry as compared to the region is does not put the industry worse off.
Regional shift
This is shown by the difference between the industrial mix and the national mix (Reynolds, 1980). These differences indicate that regional competition was the cause of national economic performance ranking as given below.
Rank of Region industries (2008-2013)
- Manufacturing industry
- Trade industry
- Construction industry
Conclusion
The above sample industry from the main Analysis table above indicates that the three regional industries performed better than the national industries during the period 2008 to 2013. Also based on the ranking of the industries based on the regional shift and performance of each industry, shows that Manufacturing industry does well and employs effort based in economic time. Therefore, if the national industries would employee similar measures taken the industry, the economic growth would be so high.
Reference
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.
Stimson, R. J., Stough, R., & Roberts, B. H. (2006). Regional economic development: Analysis and planning strategy. Berlin: Springer.
