Understanding the Outputs of the Economic Impact Report

Your Economic Impact Report uses data from the Bureau of Economic Analysis’ RIMS II model, a tool that estimates the regional economic impact of your spending.

RIMS II relies on three key inputs:

1. Spend amount

2. Region (location)

3. NAICS code (industry classification)

If any of these elements, especially the NAICS code are missing, that supplier is excluded from the calculation.

Here is more information about the RIMS II model:

About the RIMS II Model

RIMS II (Regional Input-Output Modeling System) is a tool from the U.S. Bureau of Economic Analysis (BEA) used to estimate the economic impact of projects like new facilities, infrastructure, or regulations.

It shows how spending in one area (like construction) affects related industries (like materials, labor, and local services) and calculates “multipliers” to estimate the total effect on jobs, earnings, and output in a specific region.

RIMS II combines national economic data with local purchasing patterns to give a more accurate picture of how a project impacts the local economy.

RIMS II is based on BEA’s national supply-use tables, also called the input-output accounts. These detailed tables show the goods and services produced by hundreds of industries and how those goods and services flow to other industries or consumers, for a comprehensive picture of relationships throughout the U.S. economy. 

Jobs Supported

In a RIMS II-based economic impact report, "jobs supported" refers to the total number of jobs that result from a specific amount of spending in a region or industry.

Jobs supported = Spending × Employment Multiplier

• Spending: The amount of money spent on a project, service, or supplier.

• Employment Multiplier: A number provided by RIMS II that estimates how many jobs are supported per $1 million spent.

Total Value Added = New Wealth Created

This is a subset of Output, it tells you how much new value was created in the economy (excluding things like intermediate goods).

It includes:

• Employee pay (wages + benefits)
• Taxes
  
• Profits & interest
  

It’s like baking a cake: Value Added is the cake itself. Total Output includes the flour, eggs, sugar, the baker’s wages, even the power bill for the oven.

Total Output = Total Economic Activity

This is the full value of business activity triggered by your spending - not just what you spent, but what your suppliers spent, and what their suppliers spent, and so on.

Think of it as everything touched by your dollars: wages, raw materials, rent, profits, equipment - all of it.

Total Compensation = Wages and Salaries

This shows how much of the impact goes directly into people’s pockets as wages.

This often looks large and that’s a good thing, because it means your spending is supporting real jobs, at your suppliers and beyond.

For example: If you pay $100,000 to a service provider, they may use 70% of that to pay their staff. Their staff spends that income locally, supporting even more jobs.

Why Wages Might Look Bigger Than Your Supplier Spend

It can be surprising to see Compensation (wages) reported as higher than what you paid suppliers, but that’s because:

• RIMS II is measuring multiple tiers of job creation,
• Each level has its own wages,
• And many industries (especially services) are labor-intensive.

You’re not just seeing what you spent, but the jobs and income it created across the economy.

Summary

Term	What It Tells You	Includes
Output	Total economic activity	All spending
Value Added	New value created	Wages, taxes, profits
Compensation	What went to workers	Wages + benefits

 Additional Economic Impact Resources:

1. Economic Impact Analysis (EIA)
2. WAYS TO SUCCESS: Economic Impact Report
3. HOW TO: Generate an Economic Impact Report