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Florida State University 
Department of Urban and Regional Planning
Planning Methods III: Forecasting 

Example

Calculating
Local Emp.
Shares

Calculating WA
State's Industry
Growth Rates

Projecting King
County's 2025
Employment

Example
Results

Discussion
Questions

CONSTANT SHARE EXAMPLE: KING COUNTY AND WASHINGTON STATE

Example

Using the following employment data for King County and Washington State in 1993 and 2025, we can utilize the Constant Share technique to project industry employment for the County in the year 2025. As with our previous examples, this example uses a very coarse set of data to keep the exercise simple.

Table 1: Employment Data for King County and Washington State, 1993, 2025

The first task is to calculate the local employment share for each industrial sector. This share can provide immediate insights into the relative importance of King County in the State's economy, particularly for certain industries.

Table 2: Calculation of Local Employment Shares

The calculation of an industry employment share is simply:

Local Employment 1993
State Employment 1993

So, the Services sector in King County has a 1993 employment share of:

267,512 / 813,300 = 0.3289

What do these employment shares tell us? Let's look at the Services Local Employment Share: 0.3289. This figure tells us that in 1993 King County had a 32.89% share of the State's services employment. The Constant Share technique assumes that this will remain constant between 1993 and the year 2025.

In what industrial sectors does King County appear to be particularly important to the State economy?

To project employment figures for King County in 2025, a Reference Region Growth Rate must be calculated for each industry. This is done in Table 3.

Table 3: Calculating Washington State's Industry Growth Rates

Before we turn to calculating King County's projected 2025 employment, let's take a moment to examine these industry growth rates. The above numbers suggest that Washington State can expect to grow most in certain industrial sectors. Clearly the Service sector will experience by far the greatest growth, with a projected increase of .8504, or over 85%, expected.

Is this finding surprising? What other industrial sectors show evidence of significant growth between 1993 and 2025?

In Table 4 we can apply the Con-Share projection formula to calculate King Counties projected employment in the year 2025.

Table 4: Calculating King County's 2025 Projected Employment**

**Note that there are some differences due to the rounding of the Growth Rates.**

Again taking the Services sector for our example, the Projected King County employment can be calculated (using the Con-Share Projection Formula) as:

(1+ 0.8504) X 267,512= 494,994

Example Results

• Using the Constant Share technique, we have estimated King County's 2025 employment to total 1,263,901. These almost 430,000 new jobs represent a 51.52% increase over the 1993 employment totals. You also have generated employment projections by major industrial sector.

• What does this large number of jobs tell you, the local planner? Well, quite simply, all of those new employees are going to need homes, demand services (like Fire and Police), their children will need schools, and they will have a myriad of other effects. The usefulness of projections, in part, provides some idea as to the demand for housing, services, etc. of the future residents of your analysis area.

• The breakdown of jobs by industry also provides some insight into the infrastructure demands of the economy in 2025. For example, where are all those new manufacturing jobs going to be located? What are their land and infrastructure needs?

• As is hopefully clear by now, the employment figures generated by the Constant Share technique should serve as a reference point for other employment projections. For example, what happens if we assume that the State of Washington will grow at a faster rate than the above figure suggest? How can we fit that into our projections?

Discussion Questions

• What problems/limitations do you see with this technique?

• Is it reasonable to assume that King County will have a constant local share of the major industrial sectors between 1993 and 2025? Why or why not?

• How would the above totals change if we used two or three digit data in our calculations?

• Would the results be affected if we used a different reference region, say the United States? Do you see any similarities between the Constant Share Method and the Location Quotient Method here?

• How might a range of projections be generated using the Constant Share technique? (Relate this question to the comment above on the State's economy growing at a slower or faster rate than expected.) Why might this be a useful modification to the Constant Share technique?

• How would the calculations have been affected if we had local employment figures for 1995 instead of 1993?

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