Construction spending and final demand

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    maria_lucas

    Hello,

    Thank you for your question! 

    By definition, drilling new wells is an investment; as such purchases to Sector 37 is not part of any industry production function (like new construction). Therefore, when you view IMPLAN's Study Area Data on Output for Sector 37, this Output value is equivalent to Final Demand.

    When you model an Industry Change on a Sector in IMPLAN, the model assumes it is all Final Demand. 

    Thank you,

    Maria 

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    Mflyr

    Maria: 

     

    Thanks for the helpful reply!

    I am now wondering about other types of construction spending. For example, spending to construct a new non-residential building seems like an investment. However, I believe I've seen sector 58 in the production function for some other sectors. Would this construction spending be considered final demand? 

     

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    maria_lucas

    Hello again,

    Specifically all new construction sectors, sectors 52-61, are defined as investments, so you won't see any purchases to these sectors in any of the sectors' production functions. 

    You may have seen maintenance and repair construction sectors, sectors 62-64, in the production function of a sector. 

    A good way to check what Industries purchase a given Commodity is by navigating to Social Accounts > Balance Sheets > Commodity Balance Sheet > Industry Demand. You will need to select the commodity for the construction sector you'd like to you view using the commodity code (3000 + the sector number). The Institutional Demand tab will show you all of the Final Demand for the Commodity. 

    Thank you,

    Maria

     

     

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