Stellantis Expansion in Belvidere, Illinois

Stellantis and the United Auto Workers have come to a tentative agreement to expand operations in Belvidere, Illinois. The agreement includes plans to invest $4.8 billion to reopen a distribution center closed in February and potentially develop a new battery and assembly plant. REMI analysis was run by Region 1 Planning Council to determine the potential direct and indirect economic effects of these investments in Boone County and surrounding counties.

Click here to learn more about economic impacts of this investment from Jason Holcomb, Director of Community Impact, at Region 1 Planning Council, in the article titled, “Study $5B from Stellantis could equal $3B for Belvidere area residents” written by Jeff Kolkey at Rockford Register Star.

Economic Impacts of Broadband Expansion in Indiana

Indiana has experienced a significant economic transformation through strategic investments in broadband infrastructure. In 2018, Indiana announced the Next Level Broadband Connections program, and in 2021 the state announced the Indiana Connectivity Program to expand broadband to households that previously had no access. Between 2019 and 2023, $609 million was invested in broadband infrastructure, drawing from federal, state, and private funds.  To demonstrate the profound impact of these investments on the state’s economy, the team at the Purdue Center for Regional Development used REMI PI+ and SEI to analyze key economic indicators including employment and GDP, in addition to thorough demographic analysis.

The economic benefits of these investments include an average of close to 1,600 new jobs per year, an increase of about 800 in population, and the addition of 580 workers to the labor force. This economic impact translates into nearly $195 million added to the state’s Gross Domestic Product (GDP) annually.

The analysis of workforce impacts reveals that broadband investments have significantly contributed to job creation. Younger workers (ages 16 to 24) constitute a higher share of the added labor force, contributing to economic rejuvenation. However, the study also indicates disparities in the distribution of benefits across demographic groups, with variations in educational attainment and compensation quintiles. Factors such as the percentage of the rural population and individual poverty rates provide an understanding of contextual nuances that influence the impact of investments.

In conclusion, the Purdue Center for Regional Development (PCRD) analysis underscores the transformative impact of the Next Level Broadband Connections and the Indiana Connectivity Program on Indiana’s economic landscape. The strategic allocation of funds has bolstered connectivity and driven job creation, population growth, and economic diversification across the state. As Indiana continues to invest in its digital infrastructure, the positive ripple effects are poised to shape the state’s economic future.

To access the full report released in 2023, “Impact of Next Level Broadband Connections and Indiana Connectivity Program Investments” by Roberto Gallardo, Director at the Purdue Center for Regional Development, please click here.

 

Rising Gas Prices: Current Effects and Future Implications

Since 2020, the world’s economy has been crippled due to the supply chain shock and labor shortages created by the Covid-19 pandemic. A new global disruption has caused the demands for commodities to soar – war. Russia stopped all international shipments of oil and gas, causing the United States of America to participate in de-globalizing these commodities. This unpredicted switch has affected American households particularly hard due to the price of gas which increased 41% YTD in 2022.

There are two significant reasons for the increased cost of gas. The first being in 2021, the Biden administration announced the ban of new drilling on federal land to slow down carbon-related climate change. Russian oil has faced sanctions stemming from the war in Ukraine; the supply of natural gas and oil has declined globally and caused the gas price to increase further. Although America had only received 3.5% of its national oil consumption from Russia before the war, according to Forbes, this has put more pressure on domestic producers to meet demand.

This increase in gas prices has already caused national inflation highs not seen in 40 years. The rapid rise in prices has hurt consumers’ buying power and caused a decrease in consumption. Consumers have been forced to pay higher prices for required transportation, and the increase in input costs for businesses has and will continue to raise the prices of necessary commodities. This has led directly to decreases in travel, with the most impacted states being those in the Midwest that require longer travel times to get to destinations of interest. This has been particularly impactful for Kansas, as their change in weekday trips has decreased by 14.1% from February 27th to March 6th of this year (Inrix).

Although the Biden administration has recently made plans to open up federal lands for oil drilling, prices are not expected to decrease rapidly as the effects of these measures will not materialize for the next couple of years. Trade with Russia is also not likely to resume for the foreseeable future. While reintroducing drilling, while having beneficial economic effects, will almost certainly increase carbon emissions and create environmental harm. While steps are being taken to alleviate the impacts of these national supply issues, American households will likely continue to feel the effects of higher prices for the foreseeable future.

In our recent webinar, “Rising Gas Prices Effect on Transportation Industry,” our associates Phil Meneghini and David Casazza further explore how rising gas prices have the transportation industry. You can access the video and slides by clicking here.

Find more about gas prices through the Forbes website by clicking here.

Find more about oil exports through the Forbes website by clicking here.

 

Our Rapidly Transforming Energy Industry: How Economic Modeling Evaluates Environmental and Energy-related Policy Variables

Energy and environmental policies continue to make headlines in 2022, emphasizing our rapidly changing renewable energy productions and the anticipated impacts of the Infrastructure Investment and Jobs Act, bipartisan legislation passed by the Biden administration in 2021. Now, economic examinations of wind farms, greenhouse gas emissions analyses, and overall energy-related policy estimations are vital studies needed to determine the future of our economic vitality.

The global push for cleaner energy and improved air quality comes with new initiatives and the rearrangement of assets and funding. It also implies that the former and current energy sources are either about to enter or are in the midst of a flux period dictated by impending legislation and technology. For instance, by adopting the Global Warming Solutions Act in 2008, Connecticut set a goal of reducing greenhouse gas (GHG) emissions by 80 percent below 2001 levels by 2050. Implemented strategies included building envelope improvements, creating energy management systems improvements including high-efficiency thermal systems, and decarbonizing the electric grid with zero-carbon resources such as solar photovoltaics (PV), wind, hydro, biomass, and nuclear generation. Stanley McMillen, Ph.D., Visiting Assistant Professor of Economics and Consultant at the University of Connecticut, analyzed the effects of these strategies on the transportation, buildings, and electricity sectors in Connecticut. Dr. McMillen will be presenting this study via REMI webinar on Tuesday, February 1, from 2:00 – 3:00 pm (ET). If you would like to attend, please register by clicking here. To view Dr. McMillen’s full slide summary, please click here.

These growing national energy and environmental issues have solidified the importance of factoring in their policy impacts when considering the overall vitality of our economy for years to come. Thomas D. Peterson, President & CEO of the Center for Climate Strategies (CCS), conducted an analysis that underscores the strategic benefits of comprehensive approaches to managing greenhouse gas emissions. Mr. Peterson explores the economic effects of reducing household energy prices and greenhouses gases as referenced in the CCS study, “Economic Impacts of Comprehensive Climate and Energy Policy: National Climate Change Stakeholder Recommendations and U.S. Senate Proposals Would Advance Economy and Employment.” The study also explored the need for a national framework to support a balanced portfolio of actions and the importance of stakeholder involvement in policy development and management of the economy. You can access the complete study by clicking here. If you are interested in hearing Mr. Peterson discuss this study in detail, please register for our upcoming guest webinar by clicking here.

The utility industry’s transformation has also presented significant implications for regional development. Policy leaders are attempting to fully understand how communities will be affected as innovation and evolution occur in energy markets, given the potential for nationwide impacts. Patrick Kelly, Director of Economic Development at FirstEnergy, and Jim Robey, Ph.D., Principal at Robey Analytics, LLC., are seeking to explain how economic impact analysis models equip the utility industry. FirstEnergy’s strategic initiatives to build resilient utility systems, creating 21st-century jobs, and develop clean energy sources, and Robey Analytics’ compilation of studies emphasizing how larger utility companies are approaching analytics using impact models are the focus of an upcoming discussion on Wednesday, February 16. This discussion will answer questions such as “How can economic modeling and similar produced analyses support and inform this rapidly changing industry?” For more information on speakers and registration, please visit our website here.

Changes in energy, the environment, and our knowledge of these topics are rapidly impacting the landscape of our planet and our ability to build resilient industries. As entire states try to gain control of their environmental footprint, a shift in industries occurs. It is now vital that we stay ahead of the curve with effective policies and practices informed by economic modeling.

How REMI Contributes to the Future of Economic Analysis

The legislation developed by our elected officials at the local, state, regional, and national levels directly influences the day-to-day life of every American. Whether targeted towards post-pandemic relief, regional development, equality programs, workforce enrichment, or a slew of other economic goals, legislative leaders and policymakers have a hand in the overall scope of a public policy. Financial analysis enlisted nationwide to evaluate the total impacts of policies and programs before implementation considers every region’s unique, influential factors.

Evaluating the short- and long-term impacts of a prospective piece of legislation can ensure policy leaders fully understand all effects on the population and the environment related to the topic studied before implementation. With meaningful forecasts, they can address the most significant issues with the lowest amount of misplaced effort and resources, a task of increasing importance in the past decade. The substantial analysis creates a higher understanding of the expected effectiveness of proposed legislation and can inform the public of its potential impact on their lives.

It is on the foundation of the transformative idea that government decision-makers should test the economic effects of their policies before implementation that Regional Economic Models, Inc. was founded. Since 1980, we have sought to improve public policies through rigorous policy analysis. Our economic modeling solutions can forecast the potential outcomes of national policies and programs. Supported by various data and forecasts researched and compiled from across the United States, our solutions intend to empower our leaders to make informed decisions and minimize risk supported by dynamic economic modeling.

For instance, a national policy can have different implications for each state due to their respective gross state product, input, output, and linkages to in-state and out-of-state programs and plans. Our flagship model, PI+, specializes in generating realistic year-by-year estimates of any specific policy initiative’s total local, state, and national effects. Our software tool simulates comprehensive economic and demographic impacts in wide-ranging initiatives, policies, and programs for economic development, infrastructure, environment, energy, and natural resources industries.

Building on our modeling foundation, we understand the importance of prioritizing analysis that dissects policy at the intersection of taxation and infrastructure. Transportation networks shape regional economies and influence labor markets, and fiscal policy is key to the county’s globalization efforts and economic competitiveness. In response, the Tax-PI and TranSight models forecast these sectors’ dynamic economic effects of policy changes.

Tax-PI is the only readily available dynamic impact model capable of capturing the direct, indirect, and induced fiscal and economic effects of taxation and other policy changes over multiple years. State revenue departments across the county have implemented Tax-PI as a critical aspect of their regular reporting and ability to demonstrate a policy’s financial and fiscal impacts on local and state budgets. As a result, Tax-PI has informed policy decisions based on their economic and budgetary implications, such as state and local tax changes, state and local fiscal budgets, and education and infrastructure investments.

Likewise, TranSight permits state departments of transportation, regional planning agencies, and metropolitan planning organizations to forecast the short- and long-term impacts of transportation investments on jobs, population, income, and other economic variables. As a locomotive of economic growth, transportation and infrastructure policy has reached new heights as a legislative priority with the recent signing of the Infrastructure Investment & Jobs Act, commonly known as the Bipartisan Infrastructure Bill. By showing the impact of transportation improvement on jobs and economic development, TranSight improves our ability to establish legislative priorities.

Global energy and environmental concerns have also dominated our public policy spheres, conveying the importance of factoring in their policy impacts when considering the overall vitality of our economy. Since energy-generating industries are an essential input to other industries and a sector in their own right, energy analyses should illustrate the total economic impact of changing electric rates, introducing new power sources, and investing in energy production. The E3+ model simplifies the complex relationships between energy, the environment, and the economy. Federal, regional, and state agencies charged with producing such analyses have enlisted the assistance of the E3+ model and our consulting team to blaze a trail toward a future that values renewable energy sources and resilient ecosystems.

We understand that every public policy affects each American differently. As federal, state, and metropolitan agencies increasingly require socioeconomic impact analysis of government policies and programs, it is vital to consider how policy impacts different demographic groups. The assessment of core socioeconomic implications of programs and practices to pave the way towards more informed policymaking is the grounding purpose of the REMI Socioeconomic Indicators module (SEI).

REMI SEI has been used to analyze many policies, from quantifying how universities are building a more diverse workforce and equitable future to evaluating the total distribution impacts of tax policy. This module interprets the complex relationship between public policies in their industry and the varying economic effects across demographic groups such as jobs by race/gender, regional disparities by county, labor force by race/gender, jobs by education level, income by quintile, and inflation impact by income.

Our contribution to the future of economic analysis lies in our dedication to refining our dynamic macroeconomic modeling practices. Over the past three decades, our software tools and modeling practices have evolved to create multifaceted instruments that have supported studies performed nationwide studies and global economic assessments. Our commitment to a better understanding of the economy drives our unceasing process of innovation in economic theory and practice, software development and application, and the use of quantitative financial analysis to guide policy decisions.

Led by our expert analysts, we recently hosted a webinar training series to explore our software solution that simplifies the complex relationships between policies and your economy. Please click here to view the training presentation materials for a further in-depth explanation of each model and see them working with real-life scenarios.

You can request a model demo of your choice by clicking here.

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