Commerce’s Economic Data Is a Goldmine for Small Businesses
Created on June 26, 2013
Public data is a valuable national asset whose value is multiplied when it is made easily accessible to the public. For example, the public release of weather data from government satellites and ground stations generated an entire economic sector that today includes the Weather Channel, commercial agricultural advisory services, and new insurance options. Similarly, the decision by the U.S. Government to make the Global Positioning System (GPS), once reserved for military use, available for civilian and commercial access, gave rise to GPS-powered innovations ranging from aircraft navigation systems to precision farming to location-based apps, contributing tens of billions of dollars in annual value to the American economy.
The Department of Commerce makes available to small businesses economic data that are important for key business decisions such as where to locate, where to manufacture a product and where to sell that product.
For example, AmFor Electronics, a second-generation, family-owned manufacturer in Portland, Oregon, is the market leader in the manufacturing of alternator and starter testers, which are sold to auto parts stores, auto repair shops, and alternator and starter rebuilders. Using Commerce data like that available in the Assess Costs Everywhere tool, AmFor decided to enter the wire harness sector and chose to locate their manufacturing facility domestically rather than overseas because it provides a shorter turnaround times with fewer defects that ultimately leads to a reduction in costs. These successes have translated into new customers and the hiring of 50 employees.
The Bureau of Economic Analysis (BEA) provides information on the economic activity of the nation as a whole as well as each state, county, and metro area around the country. They have national and regional information on how much people earn in each geography, which can be used to understand market size and capacity. BEA also offer statistics on how much and of what products the United States sells abroad, how much the U.S. invests abroad and how much foreigners invest in this country. Those are just a few examples of the statistics BEA produces that would help small business people make informed decisions. All of this data and more are accessible via BEA’s Interactive Tables system.
Another resource for small and mid-sized firms is BEA’s RIMS II product, which is the regional multiplier system used to do economic impact studies. For example, a fish processing company in Bellingham, Washington wants to estimate the industry’s contribution to the region to show the industry’s importance to the community. Using the RIMS II product, they can estimate how much they contribute and the rest of their industry contributes to the local economy in taxes, jobs, indirect economic activity and other key measures of a city’s economic health. Businesses can use the multipliers to study the impacts of a wide range of investment projects, such as the construction of a new hotel or the expansion of an existing factory as well as determine the capacity of a local economy to provide the necessary inputs to a new business.
A brand new statistical product from BEA, Real State Personal Income, just released last week for the first time, will help small and mid-sized firms determine the variations in costs across the nation. These new statistics, based on a prototype regional price parity index, provide information to allow the direct comparisons of the costs of living differences between states, cities, and metropolitan and non- metropolitan areas across the U.S.
The U.S. Census Bureau also provides key data for small businesses. The same statistics that are used to set national economic policy and determine local highway planning also provide an invaluable planning tool for even the smallest businesses. The Census Bureau’s American Community Survey is a treasure trove of local information for small business—the only national source of detailed statistics at the neighborhood level, for every neighborhood in America . The survey’s rich information on social, economic and housing characteristics helps small businesses evaluate potential market opportunities, choose new store locations and assess the local workforce and customer base.
Through the Census Bureau’s Business and Industry page, small businesses can find data by sector such as construction or retail trade. There are also special topics like e-commerce and historical data that can help a small business make a decision about where to invest. This page also has the results of the Economic Census for the entire country down to the local county.
The Census Bureau provides an annual series of subnational economic data by industry through their County Business Patterns. This series includes the number of establishments, employment during the week of March 12, first quarter payroll, and annual payroll. Small businesses use these data to study the economic activity of their communities, analyze economic changes over time, measure the effectiveness of sales and advertising programs, set sales quotas and develop budgets.
Monthly and quarterly economic indicators of the nation’s economic health are also available, can be searched and charted over time. Access to timely information is crucial for businesses in making short- and long-term plans.
Businesses that want the most up-to-the-minute economic data should download the “America's Economy” mobile app from the Census Bureau (Android/iOS). It provides smartphone and tablet users with the real-time government statistics that drive business hiring, sales and production decisions and assist economists, researchers, planners and policymakers. The app combines statistics from the Census Bureau, Bureau of Economic Analysis and the Bureau of Labor Statistics. The economic indicators track monthly and quarterly trends in industries, such as employment, housing construction, international trade, personal income, retail sales and manufacturing. Businesses that want the key economic indicators delivered right to their inbox can sign up here. Specific data sets will be emailed by signing up with the Census Bureau or BEA.
Originally posted at Commerce.gov