A publication of the Indiana Business Research Center at IU's Kelley School of Business
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How Jobs in Indiana Are Forecast

The Indiana Department of Workforce Development (DWD), in cooperation with the U.S. Department of Labor, recently released its forecast estimating the kinds of jobs that will be found in Indiana in the year 2006. This forecast projects the number of jobs in each occupation within each industry for the period 1996-2006. The projections are developed using a four-step process that builds off of 1996 data. The first step in preparing the projections is completing the Indiana Occupational Employment Statistics (OES) survey, which provides current estimates of occupational employment by industry. A sample of establishments in the nonfarm wage and salary sectors of the economy is surveyed over a three-year period to obtain employment levels by occupation. There are 75 industries from the Standard Industrial Classification system at the two-digit level, and more than 700 occupations. The next set of projections, through 2008, will be issued later this year and will use industry data at the three-digit SIC level for about 400 industries.

Industry/Occupation (I/O) Matrix

The next step is to create the industry/occupation matrix, which presents the occupational staffing patterns of each industry. It tabulates employment cross-classified by industry and occupation.

Industry Projections

Projecting the growth and decline of individual industries is the third step in preparing the forecast. Changes in industry structure will affect the growth and decline of the occupations needed to staff those industries.

Statewide annual average employment projections are produced for each industry based on statistical analysis of data from DWD, BLS and the U.S. Census Bureau. In addition, qualitative information from local and state labor market analysts is used to adjust industry projections.

Occupational Employment Projections

The last step is to forecast employment demand by occupation within each industry using the I/O matrix. Statewide estimates are developed for the base year (1996) and projected to the year 2006. They take into account factors, developed by BLS, that estimate changes in industry staffing patterns brought about by new technology and changing business practices.

The projected estimates include annual net job openings caused by both new demand due to growth and replacement needs. Average net openings for each occupation are the sum of growth demand and replacement needs. Replacement needs are the average number of workers who retire or leave their occupation to enter a new occupation.

The projected data reflect studies of past and present industrial trends. They illustrate what is likely to happen, barring major changes from past trends. The forecast assumes that no major events, such as widespread or long-lasting energy shortages, other price shocks, or major wars will significantly alter the economy's industrial structure or economic growth rates. Current political, institutional, social, technological and scientific trends are also assumed to continue without significant changes. Readers should view the estimates of projected employment as indicators of relative magnitude and probable direction rather than as estimates of absolute values. Therefore, consider the projections only a starting point when studying future industry and occupational employment

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