What is the North Country Economic Index (NCEI)?
The North Country Economic Index (NCEI) is a quarterly economic report to gauge the performance of the economy in the northern rural New Hampshire, which currently includes Coös County. The NCEI is released four times a year – in March for Winter (December, January and February), in June for Spring (March, April and May), in September for Summer (June, July and August), and in December for Autumn (September, October and November).
NCEI also tracks the economic performance of the State of New Hampshire for the purposes of comparison. Posting county and state indicators side by side makes it clear how the county’s economy fares in comparison to the state’s economy. This State Index is constructed using the same methodology and component indicators used in the construction of the County Index so that the two Indexes can be directly comparable. For more information about the State’s economy, please see the Coincident Index published by the Federal Reserve Bank of Philadelphia.
The NCEI has four sections – coincident indicators, student report, housing market report, and leading indicators. The coincident indicators track the current status of the local economy, while leading indicators tell us where the economy may be heading in the coming months. The coincident indicators are aggregated into a composite index, which provides a snapshot of the current economic conditions. The student section will complement the NCEI report by reporting on episodes and interviews with community leaders. It partially reflects our recognition that aggregate economic data may not reflect some positive side of the economy, particularly when the economy is going through some tough stretches. In addition, it gives students a great opportunity to build relationships within local businesses, governments, and trade organizations before going out to the job market after graduation. And, it’s hoped that it will help lay the foundation for the student’s future career in the region. The report also includes the coverage on the housing market for both Coos County and the state of New Hampshire. Over time, the NCEI will grow, develop, and become even more useful to businesses, community organizations, nonprofit organizations, government agencies, and households.
How is NCEI constructed?
NCEI is modeled after the Conference Board’s Economic Indexes. The difference is the component indicators used in the Index. The indicators used by the Conference Board are reported only annually with a significant time lag at the county level. For this reason, it was necessary to use different indicators, many of which are collected locally. All individual indicators, except for number of employed residents, are smoothed by 12 month moving average to reduce the noise level, and deflated when necessary before being aggregated into the Index. Then, individual indicators are aggregated into a single summary index based on a weighting scheme, which reduces undue influence of volatile indicators by setting the weight based on the inverse of the standard deviation of each series. The table below presents the comparison between the two indexes in their component indicators.
Table 1: Component Variables
|Non-Farm Payrolls (the number of jobs)||Household Employment (the number of employed residents)|
|Personal Income||Wage and Salary Disbursements|
|Manufacturing and Trade Sales||Rooms and Meals Revenues, and
|Industrial Production||Industrial Electricity Consumption|
Why Coös County?
State-wide economic indicators are dominated by the much more industrial southern regions of the state, and do not adequately represent New Hampshire’s rural regions. Among the four northern counties, Coös County is a good place to start the project because of its geography and economic conditions. There have been significant efforts to revive the County’s economy; and it is hoped that NCEI will play a role as a guiding light for these continuing efforts.
The NCEI will complement other studies currently underway in New Hampshire’s North Country, such as the multifaceted social and demographic research of the Carsey Institute at UNH. Taken together, the NCEI and Carsey Institute research will provide a robust analysis of a rural region undergoing social and economic change. Few rural regions in world have such focused research, and it is likely that other regions in the United States will be able to learn from lessons of New Hampshire’s North Country.
Why is NCEI unique?
Despite the usefulness of economic indicators for government, businesses and individual citizens, they scarcely exist at the county level due to a lack of timely data. There are only two counties nationwide that are currently publishing economic indexes regularly. California’s Humboldt State University has reported the economic index for Humboldt County, which resembles Coös County in that it is a rural county both distant from metropolitan areas and dependent on tourist dollars. In addition, the University of Nevada at Las Vegas has published the business activities index for Clark County. Its focus, however, is on the metropolitan Las Vegas, which has little in common with Coös County’s economy and community structure.
Why is this important?
Community efforts to revive the local economy depend on good information. At sub-state levels, however, economic data are scarcely reported without significant time lag, often two or three years. Communities lack up-to-date information for the real-time decision making. NCEI fills this void by providing an objective tool for measuring the current status of the local economy. Thus, it can help communities better understand their local economy and focus resources on core problems.
How should economic index be interpreted?
An increase in the index indicates improving economic conditions, while a decline means the opposite. Due to the volatility in the economic indicators, however, it is not always clear whether an increase in the index reflects a true change in the underlying trend. The Conference Board recommends “Three Ds” for interpreting decline in its Leading Index – Duration, Depth and Diffusion. “The longer the weakness continues, the deeper it gets; and the more widespread it becomes, the more likely a recession may occur.” [Business Cycle Indicators Handbook, p16] This Three Ds principle may also apply in interpreting the coincident index. The longer the increase (decrease) continues, the larger the increase (decrease) gets; and the more widespread it becomes, the more likely economic conditions are improving (worsening).
What does NCEI not do?
Although NCEI is a good resource to see the current and past economic performance of the local economy, it focuses on providing the up-to-date information and is the only one piece of the decision-making puzzle. The following are sources of additional data for those who are interested in the North Country:
It reports daily mortgage rates at sub-state levels based on survey data.
- Bureau of Justice Statistics
It provides criminal justice data for states, counties, and cities.
- Census of Agriculture at the U.S. Department of Agriculture
USDA conducts Census of Agriculture every five years. The farm statistics include the number of farms, market value of farm products sold, government payments, and value of sales by commodity group.
- Community Economic Development HotReport
CED HotReport provides a variety of data, which are useful in community development decision making. Topics include economic, demographic, housing, transportation, and community assets.
- Community Economic Toolbox
It provides online economic tools to understand county economy including location quotients and shift-share analysis.
- Community Health Status Indicators
The goal of CHSI is to provide an overview of key health indicators for local communities. The CHSI report contains over 200 measures for each of the 3,141 United States counties.
- County Business Patterns
It reports statistics on businesses including the number of employees, payroll, and the number of establishments by industry.
- County Migration Mapper
It maps county to county migration flows based on IRS data.
It provides access to variety of data based on multitude of sources including the 1990 and 2000 Censuses, Home Mortgage Disclosure Act, Section 8 Expiring Use Database, County and Zip Business Patterns, Fair Market Rent data, HUD income estimates and limits. It also provides several easy-to-use data analysis tools that can be used to study and compare community characteristics.
- Economic Census
The Census Bureau surveys businesses every five years and complies economy-wide key statistics by industry from the national to the local level. Included are number of establishments, sales/receipts/revenue/shipments, annual payroll and number of employees. Many of these data can also be found in OCEW, which is more current. Unlike QCEW, however, Economic Census offers data on sales.
- Educational Finance Statistics
It allows comparing a school district with its peers on revenues, expenditures, and characteristics such as teacher and student ratio.
- Economic Profile System by Headwaters Economics
It allows users easily to produce free, detailed socioeconomic profiles at a variety of geographic scales.
- Educational Needs Index
The Education Needs Index (ENI) is a regional-level study of educational, economic, and population pressures that influence educational policy and planning at local, regional, and state levels. It provides searchable query tools that can be used to create peer comparisons.
- Federal Reserve Bank of St. Louis
St. Fed maintains database for economic indicators at state and various sub-state levels including county and town.
- Institute for New Hampshire Studies
It is a wonderful source of tourism indicators.
- Location Quotient Calculator by the US Bureau of Labor Statistics
It provides LQ calculator, which is a way to see how concentrated an industry is in a region relative to a larger geographical area.
- Local Area Unemployment Statistics by the US Bureau of Labor Statistics
It provides access to unemployment statistics.
- New Hampshire Data Library by Office of Energy and Planning
It contains the general information about the State, including population, housing, geography and economy. Some are complied at the county level.
- New Hampshire Department of Transportation
NHDT compiles traffic volume data for various locations throughout the State.
- New Hampshire Economic and Labor Information Bureau
NHELIB maintains database for demographic, labor market and educational data for the State
- New Hampshire Economic Review by Public Service of New Hampshire
This annual publication compares New Hampshire with other states in key economic indicators.
- Northern New England Real Estate Network
NNEREN reports real estate market statistics each month.
- Quarterly Census of Employment and Wages by the US Bureau of Labor Statistics
QCEW compiles the quarterly employment and wages data, including the number of establishments, the number of jobs, and the average wages. The data is available by industry.
- Regional Economic Accounts by the Bureau of Economic Analysis
BEA compiles the personal income data statistics.
- Regional Economic Conditions by Federal Deposit Insurance Corporations
FDIC provides employment and income, and real estate indicators, all of which are useful in the analysis of risks at facing financial institutions.
- Scorecard, the Pollution Information Site
Scorecard ranks geographic areas or pollution sources by health risks, pollutant exposures or toxic chemical releases.
- State and County Quick Facts by the US Census Bureau
It provides easy access to people, business and geography.
- State of the Cities Data Systems by HUD
The SOCES provides data on building permits, FBI crime, public finance, housing affordability strategy, and other demographic data.
- USA Counties by the US Census Bureau
USA Counties features over 6,500 data items from a variety of sources. Included are age, agriculture, ancestry, banking, building permits, business patterns, crime, earnings, education, elections, employment, government, health, households, housing, income, labor force, manufactures, population, poverty, retail trade, social programs, veterans, vital statistics, water use, and wholesale trade.
- U.S. Department of Housing and Development
HUD USER provides interested researchers with access to the original data sets generated by PD&R-sponsored data collection efforts, including the American Housing Survey, HUD median family income limits, as well as microdata from research initiatives on topics such as housing discrimination, the HUD-insured multifamily housing stock, and the public housing population.