Industry Projections Tips to get you started Jodie Meyer, Research Analyst Nebraska Department of Labor October 2018

Additional Resource Guide https://support.projectionscentral.com/

Additional Resource Guide https://support.projectionscentral.com/

Additional Resource Guide https://support.projectionscentral.com/

Short-term Industry Projections

Projections are like a journey with many different paths There are many ways to get from point A to point B From Intro Webinar

Keep in mind… The projections software is a tool that can be used in several different ways There are many options to help accommodate for several different scenarios No two states will likely do everything the exact same way Learning the software is a continuous process I learn something new every year and I have been doing projections for almost 10 years!

Quick Software overview The Projections Suite Software is made up of five different applications that all work together and interrelate Making changes to directories and areas will carry over to the other applications Help guides are great and easy to access. Any question mark icon that you see can be clicked on to access the help guide

Quick Software overview There are several settings that can be changed in the software Basic display preferences including colors General data preparation settings such as outlier magnitudes The base year and projected year for all the types of projections Model default settings The settings can be accessed by clicking “Settings” at the top of the projections suite software

Software Setup Manage Rounds Under the Short-term data section, manage rounds Right click to add the new round

Software Setup Manage Areas Under the Short-term data section, manage areas Make sure your areas are set up and have the correct codes assigned More details on this in the Resource Guide under the “General” section

Software Setup Industry Directory If you are using any codes in your state that are not standard NAICS codes, make sure to add them into the directory For example, Nebraska uses 616000 to represent Education employment that is a combined total of all ownerships that needed to be added to the system To add new codes, navigate to the correct level and right click

Onward to Short-term Industry Projections!

Required Data Inputs Employment time series for statewide and substate areas Monthly National variables time series (online: https://support.projectionscentral.com) State and Local variables time series More information on data inputs can be found at http://www.projectionstraining.com Getting Data and Employment Series webinar 9/12/18 Non-Covered Employment: Improving State Projections webinar 1/10/2018

Import Data Import your employment and variable data You can import data as a text file or as a spreadsheet There are sample files on the projections support website of the different formats you can use The help files in the projections suite also have good instructions on how to import the data

Assign Related Industries Related industries are used in several of the models and need to be assigned Default industries are determined by national experts to be “related” to specific industries. They can be used as a starting point for assigning related industries and then be adjusted, if necessary, for each area/industry combination. Not all industries will have related ones even when using the default. When projecting, if you get an error message of “There are no related industries for the selected industry” you will need to go into this menu and assign them to get the model to run Example: Construction of Buildings Specialty Trade Contractors, Wood Product Manufacturing, Primary Metal Manufacturing, Building Material and Garden Equipment Suppliers Dealers are related industries

Assign Related Industries Assign Defaults to All Industries Or use the arrows to add or remove related industries

Leading Index One of the most often forgotten steps is selecting the leading index for each of your areas The leading index is made up of your economic indicators and is used in some of the projections models Under the Short-term projections section, select Leading Index The help files in the projections suite provide detail on using this application and how to interpret results

Calculating Projections There are two different applications you can use Project Single Region The preferred way You calculate a projection for each industry and region separately Takes more time, but gives you a better set of projections because you have more flexibility and options Project Multiple Regions If you are short on time, you can use this option to calculate projections for multiple sub-state areas To use this module, the data series for Sub-state must be mutually exclusive and comprehensive. After statewide (Aggregate Area), projections are calculated, the Sub-state Areas, plus the Balance of Area, must sum to statewide totals. There can be no overlap on Sub-state Areas. Sub-state Areas can be any Area Types but, in each projection process, they must be mutually exclusive and, comprehensive. More information in the projections suite help files

Project Single Region There are several models that can be used See the “Resource Guide” for a list of and descriptions of the models Tournament This is a good place to start because it will automatically select the specification with the “Best-fit” for each type of model.

Project Single Region: The Three Steps Step 1 button Selects data from the starting quarter to 24 months back from the ending date set by the round and process projections based on those data and the models selected. This gives an idea of how well the projections do against the actual employment for the 24- month period.

Project Single Region: The Three Steps Step 2 button Selects data from the starting quarter to 12 months back from the ending date set by the round and process projections based on those data and the models selected. This gives an idea of how well the projections do against the actual employment for the 12 month (4 quarter) period, and process projections out 4 quarters.

Project Single Region: The Three Steps Step 3 button Selects data for the full period set by the round and projects out 2 years (8 quarters) – the full projection period.

Saving Your Projection

Manually Entering a Projected Value Sometimes no matter how much you try to get the perfect projection in the system you just can’t get the models to cooperate or scenarios arise that the models can’t easily accommodate for In this case you may need to manually adjust a projection

Manually Entering a Projected Value Under the Short-term projections section, select View Projections Right click on the projected value and select edit to manually change the value This will save it and automatically change it in the system

Manually Entering a Projected Value You may need to change industries or areas or change to the percent growth graph and back to the level one to see the graph change.

Long-term Industry Projections

Convert short-term time employment series to long-term All the work that was done to get your data gathered and cleaned up for the short-term projections can be used to create your long-term employment time series In the short-term projections module under the “Data” menu, select “Aggregate” Under step 1 select the aggregation type to aggregate by Time Follow the rest of the prompts to select the area and industries Once you hit the Aggregate Data button the annual data will be saved in the system and available in the long-term module

Convert short-term time employment series to long-term

Required Data Inputs Employment time series for statewide and substate areas Don’t forget your totals! National employment time series data with projected values (online: https://support.projectionscentral.com) National variables time series and projected values (online: https://support.projectionscentral.com) State and Local variables time series and projected values Population Personal income-Real (inflation adjusted) Remember that if a projection is not available for an indicator you will have to come up with this on your own! See the webinars mentioned earlier for more information

Note: Population and Personal Income You need to designate the population and personal income variables for each area Required for OLS models and the population ratio in Shift Share. Under the Long-term data section, Variable Directory Right click and select edit A box will appear where you can designate Pop/PI

Saving your projections in the system When you save a projection from any of the different model screens it saves it along with the rest of the projections you have saved and created. This is not the same as saving as your final projection!

Saving your projections in the system You select the desired model on the summary screen Check the 'Select' box to designate which industry projections should go to the Industry Control Totals (ICT) file.

Saving your projections in the system Manual Entry Sometimes you may need to manually adjust a projection There are two main ways to do this: Make the change in the Adjustments module This is best because it: creates a new record in the projections table automatically selects it gives it a model type of Adjusted keeps the old record in the table Hand-edit the ICT file during ICT Editing

Saving your projections in the system Manual Entry In the long-term adjustments module, select “Across Industries” Select your area and year, then on the menu to the left select the desired NAICS level to show the list Right click on the projection you want to adjust and click “edit”

Saving your projections in the system Manual Entry Now type in your desired new value and hit enter on your keyboard This now unlocks the “Save” option, click this button and the adjusted value is saved This will change your totals, so remember to adjust them after making a change! More information on the adjustment module can be found in the online training videos

Saving your projections in the system Manual Entry Now when you go back to the Summary screen you will see the adjusted value you typed in is selected and if you had a previous model selected it will now have a check mark in the “Adjusted” column

Create Employment From Projections Some models need a projected value for statewide so you can use the model to do projections for the regions Complete your statewide projections, then use Create Employment from Projections to save this projection as part of the employment time series Under the Long-term output section, Create Employment from Projections

Batch processing v. Project multiple regions v Batch processing v. Project multiple regions v. Running the models separately How much time do you have? If you have the time, it is always better to run models separately Batch Processing processes one area at a time for multiple industries using existing models. Project Multiple Regions processes all sub-state areas at the same time for multiple industries But there are some tradeoffs!

Batch Processing You have the option to process all of the models that are defined in the system Statistics are generated for the models You can see how models compare and adjust as needed But sometimes it can be overwhelming and you miss out on the full details of the models This is what I use in Nebraska I use the summary screen to export the projections into Excel Then I use conditional formatting and sorts of the results to help me narrow down models I then examine and adjust individual models as needed

Batch Processing

Project Multiple Regions You can have the values for those areas add up to the statewide by selecting the “forced” setting Displays the regions side by side Only some of the models are available: OLS Export 1, Implicit Shift Share, Employment Population Ratio Shift Share, Linear Time Series, and Logarithmic Time Series No explanatory statistics are generated, except for growth rate Data needed to maximize the use of the Project Multiple Region Module: Population for each area (series and projection) Projection for area total all industries for each area

Project Multiple Regions The online training videos do an excellent job of walking you through this process

Suppression Commonly asked question: “Where do I find the suppression information for industries?” It depends on where you got your employment time series data Most commonly states use QCEW data Ask QCEW staff to get the suppression codes See if you can get a copy of their WID file to get the codes However… due to where you are getting other parts of the data or how you combine codes, this may change how you suppress things. For example: post office, railroads, hospitals Changing these then can have a ripple affect on other industries Deep Dive session on Friday

Nebraska Notes This is how I do things in Nebraska-your state could be completely different But I wanted to show you a bit of my process so you have an idea of how at least one other states tackles things

Nebraska Notes I use the projections software for long-term and short term I use a spreadsheet to record all my projections in addition to saving them in the software I create my ICT file outside of the system and import it back in I start with statewide, then project the regions. But the final statewide total will be the a sum of the regions The statewide data I project can be used in the system where needed for regional projections It also acts as a good check of the projections If the region totals are quite a bit different than the statewide projection it flags as something I need to review closer

Nebraska Notes For short-term: For long-term, I use batch processing I use project single region for statewide and the regions I start with the options that come up with tournament and adjust as needed For long-term, I use batch processing I then export the summary reports to Excel I do a bit of combining of the different model types into one spreadsheet and use conditional formatting to highlight the best statistics I also sort to see the model results from the lowest to highest This helps to narrow down the models I want to look at closer in the software

Contact Information Jodie Meyer Office of Labor Market Information 402-471-9629 Jodie.Meyer@nebraska.gov