Regional Input Output Modelling

IO modelling is a practical method for understanding the contribution that a target industry generates through the way that it supplies and consumes products and services from other aspects/industries of the economy. It does so by following the impact of expenditure (or a demand shock) in one industry through the economy as it sells and purchases to and from other industries, which in turn, have their own economic impact.  

NineSquared maintains and operates its own proprietary Regional IO Model which provides a detailed dissection of intermediate transactions in an economy, informing the supply and use of products in specified regions. The NineSquared Regional IO Model is built upon the latest and historic IO tables published by the Australian Bureau of Statistics (ABS) as part of the Australian National Accounts datasets, along with data on other economic metrics such as labour, income, households, and consumption. 

Our model can be adjusted using widely recognised methodologies for regionalisation of IO tables at the national, state, and at a sub-regional area in Australia. We are also able to adjust our model for custom geographies.  The model is able to show the direct and indirect (or induced) effects of an expenditure on: 

• Output – total value of sales or revenue required to fulfill production by an industry 

• Income – total value of income from wages, salaries and supplements required to fulfill the demand for the output of an industry 

• Employment – FTEs required to fulfill the final demand for the output of an industry 

• Gross product / value added – the value of output less the value of intermediate consumption. 

Input-output modelling is a useful tool for ascertaining the potential economic impact of spending in a certain industry at a point in time and providing a preliminary evidence case for carrying out further detailed studies. Examples of applications include: 

• Building an evidence base for the need for further detailed studies
• Quantifying the indicative economic impact of a policy or regulatory proposal
•  Ascertaining the impact to the economy as a result of investment in a specific industry
• Analysing linkages between an industry and other parts of the economy