Shift Share Analysis provides a useful mechanism for better interpreting changes in economic variables between different time periods. It is a way of breaking the growth or decline in an industry into three components to help understand what is driving the change. These three change components are commonly known as:
National/State growth effect - the amount of growth or decline in an industry that could be attributed to the overall growth of a larger area that encompasses the region's economy, usually state or national.
Industry mix effect - the amount of growth or decline in an industry that could be attributed to the performance of the specific industry at the national/state level.
Regional competitive effect - the amount of growth or decline in a specific industry that could be attributed to a local advantage or disadvantage. This is generally the most interesting component as it clearly quantifies the level of advantage or disadvantage an industry has in the local area.
The regional competitive effect for an industry generally indicates how the local industry performed against benchmark trends. An industry with a positive regional competitive effect suggests local characteristics supported above trend growth in that period. For example, if Retail Trade in a region grew by 3% but at a state/national level it only grew by 2%, some regional specific factors (e.g. new shopping centre, population growth) must have contributed to this above trend growth. A negative effect suggests the opposite.
An industry with a positive regional competitive effect may still have experienced decline, but by less than the state/national trends.
National Economics (NIEIR) - Modelled series
|Shift-share analysis to Western Australia|
|City of Kalamunda - Employment (Total)||2020/21||2015/16||2015/16 to 2020/21|
|Industry||Number||number||change||Benchmark growth effect||Industry mix effect||Regional competitive effect|
|Agriculture, Forestry and Fishing||280||324||-44||+15.5||-18.8||-41.1|
|Electricity, Gas, Water and Waste Services||212||173||+39||+8.3||+30.3||+0.1|
|Accommodation and Food Services||1,042||1,277||-235||+60.8||-62.0||-234.0|
|Transport, Postal and Warehousing||2,334||2,686||-353||+127.9||-115.3||-365.3|
|Information Media and Telecommunications||65||80||-15||+3.8||-4.5||-14.6|
|Financial and Insurance Services||329||325||+4||+15.5||-11.2||+0.0|
|Rental, Hiring and Real Estate Services||318||356||-38||+17.0||-37.6||-17.4|
|Professional, Scientific and Technical Services||591||580||+11||+27.6||+39.7||-56.5|
|Administrative and Support Services||446||500||-55||+23.8||-34.6||-44.0|
|Public Administration and Safety||517||567||-50||+27.0||+36.8||-113.7|
|Education and Training||1,911||2,105||-195||+100.2||+50.9||-345.6|
|Health Care and Social Assistance||2,933||1,437||+1,496||+68.4||+162.3||+1,265.2|
|Arts and Recreation Services||156||261||-105||+12.4||-21.6||-95.7|
Source: National Institute of Economic and Industry Research (NIEIR) ©2021. Compiled and presented in economy.id by .id (informed decisions). Data are based on a 2018-19 price base for all years. NIEIR-ID data are inflation adjusted each year to allow direct comparison, and annual data releases adjust previous years’ figures to a new base year.Learn morePlease refer to specific data notes for more information
An industry with a positive regional competitive effect suggests local characteristics supported above trend growth in that period. A negative effect suggests local characteristics inhibited growth in that period.
An analysis of employment (Total) change between 2015/16 and 2020/21 in the City of Kalamunda shows the three industries with the highest regional competitive effect in the City of Kalamunda relative to Western Australia were:
- Health Care and Social Assistance (+1,265 )
- Wholesale Trade (+591 )
- Construction (+282 )
The three industries with the lowest regional competitive effect were:
- Retail Trade (-247 )
- Education and Training (-346 )
- Transport, Postal and Warehousing (-365 )