Model Background

Understand the data, methodology, and impact categories driving the model’s analysis

The Â鶹´«Ã½ Construction Impact Model was developed in partnership with economist Brian Lewandowski of the University of Colorado Boulder to help estimate the economic impact of construction investments across states and project types. It is based on a nationally recognized input-output framework using data from IMPLAN and the U.S. Bureau of Economic Analysis (BEA).

This model is designed for Â鶹´«Ã½ members, chapters, policymakers, and researchers interested in understanding how construction investment drives economic activity. It produces estimates of how a given construction project supports:

  • Employment (jobs supported or created)

  • Employee compensation (wages, salaries, benefits)

  • Labor income (including self-employment)

  • Value added (contribution to state GDP)

  • Gross output (total in-state spending)

What Does the Model Measure?

The model captures three types of effects:

  • Direct Effects: Jobs and spending directly tied to the construction project.

  • Indirect Effects: Economic activity at suppliers, service providers, and manufacturers.

  • Induced Effects: Household spending by construction workers and those in related industries.

These effects are organized around 10+ distinct project types (e.g., new nonresidential buildings, residential repair, highway construction) and reflect in-state activity only. Interstate commerce and tax impacts are outside the scope of this model.

Methodology and Data Sources

The model uses IMPLAN input-output multipliers to estimate the ripple effects of construction activity across industries. It draws on national and state-level data from:

  • IMPLAN ()

  • U.S. Bureau of Economic Analysis (BEA)

  • U.S. Census Bureau (for industry-specific benchmarks)

Multipliers are based on historical relationships and do not adjust for market volatility, labor shortages, or policy-specific nuances. However, the model provides a consistent, transparent framework for comparing the relative scale of economic impacts across different types of construction investments.