Location Quotients, anyone understand them?

[SarcasticDwarf]

I am calculating the location quotients of various industries (making up a cluster) in the region I am in (northeastern Wisconsin).

Now, just for example, I am looking at NAICS 336, which is transportation equipment manufacturing. This region has a very large number of companies in this sector (Oshkosh Truck, Pierce (makes most of the fire trucks out there), etc. Despite this, the location quotient is 0.95 (equation below).

12687 (region employees) / 675162 (region labor force)
-------------------------------------------------------------------
1636398 (national employees) / 149296000 (national labor force)

(2005 numbers)



Anyone have any thoughts as to why this would be the case? Or have a suggestion where else I should ask this?

 

[andybird]

the numbers speak for themselves, your perception is that there are a large number of companies in your region, but judging by the actual number of employees in that industry in your region your not a major center for that industry

If you just do a simple regional / national employees calc you see that that region has only 0.78% of your nations employment in that industry!

Are you sure that those companies have manufacturing facilities in your area, or are they just sales offices? Or maybe the companies in your area have a very high level of automation that centres in other parts of the country haven't reached yet?

Basically your perception/assumption and the numbers don't match up, one of them is wrong.

 

[SarcasticDwarf]

Originally posted by: andybird
the numbers speak for themselves, your perception is that there are a large number of companies in your region, but judging by the actual number of employees in that industry in your region your not a major center for that industry

If you just do a simple regional / national employees calc you see that that region has only 0.78% of your nations employment in that industry!

Are you sure that those companies have manufacturing facilities in your area, or are they just sales offices? Or maybe the companies in your area have a very high level of automation that centres in other parts of the country haven't reached yet?

Basically your perception/assumption and the numbers don't match up, one of them is wrong.

Thanks for the explanation (and this is probably the best first post I have seen in a long time). I think the automation aspect is certainly a part of it. It might also be partially due to the data being from 2005 (I know a couple companies have experienced huge growth). The only other thing I can figure is that it is the other subsectors (4 and 6 digit naics codes) having an influence, but I have no real way to test that.

 

[Safeway]

Originally posted by: andybird
the numbers speak for themselves, your perception is that there are a large number of companies in your region, but judging by the actual number of employees in that industry in your region your not a major center for that industry

If you just do a simple regional / national employees calc you see that that region has only 0.78% of your nations employment in that industry!

Are you sure that those companies have manufacturing facilities in your area, or are they just sales offices? Or maybe the companies in your area have a very high level of automation that centres in other parts of the country haven't reached yet?

Basically your perception/assumption and the numbers don't match up, one of them is wrong.

What the hell. Black avatar guy with sun glasses on indoors. First post. Great first post. I guess you were just driven to post in this thread because you have labor knowledge?

Regardless, welcome.

 

[FoBoT]

thread of the year nominee - first post category - andybird first poster, sarcasticdwarf supporting OP

 

[andybird]

Thanks guys. I actually had no knowledge of the subject before I read this post. I found anandtech purely by accident searching for a product review, checked out the rest of the site and then started browsing the "latest topics" on the forum, saw this topic, didn't have a clue what it was about, googled it, read for half an hour, ran the numbers and thought I had a good grasp on what the OP was asking and well... there ya go. The automation suggestion came from my work as that's what I do, put people out of jobs... er I mean write software for productions lines etc.

As for the avatar... that's just what the forum gave me when I signed up and I couldn't be bothered to change it.

And hey, gotten seriously bored of the TomsHardware forums so thought I might check out here for a while.