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Employment Development Department
Employment Development Department

Industry Employment Projections Methodology

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Industry employment projections ("projections") estimate changes within an industry over time. The projections are based on the state or local area's past industry employment trends and are refined by a review of current economic developments that affect employment within each industry. Base-year data, the date for the beginning year of the projection period, are a "snap-shot" of employment at a point in time. Projections are produced using methods and tools provided by the Projections Managing Partnership (PMP). The PMP is a national consortium of state labor market information offices funded by the U.S. Employment & Training Administration that maintains the national infrastructure for the production of projections to insure consistent outcomes across the nation.

Each employer in California is classified by its primary economic activity using the North American Industry Classification System (NAICS) code and the county where the employer is physically located. The Employment Development Department (EDD) uses the NAICS to organize and track employment by industry and geographic area and construct the historical employment data series used to develop industry projections.

The state and local area long-term industry employment projections are for a 10-year period and are revised every two years. Statewide short-term industry employment projections are for a two-year period and are revised annually.

Using Industry Employment Projections Data

Projections are a source of information to estimate job opportunities by industry and can be used for:

When using projections data, users should keep in mind:

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Industry Projections Include

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Projections of Employment

Projections of employment by industry are the first phase in the employment projection process. Projections are created for each industry using historical data and current information about the economy. These projections become a primary data source used to project changes in occupational employment. Following is a description of the principal data sources and the projection process.

Principal Data Sources
The EDD collects payroll data from all private employers and government entities covered under the Unemployment Insurance, Disability Insurance, and Personal Income Tax programs.

The Process
The PMP Projections Suite software lies at the core of the projections process. This software provides the tools and national information necessary for states to produce their projections. For the state and local areas, the analyst will:

  1. Construct a historical industry series for each industry located in the area using the CES and/or QCEW employment data sources.

  2. Process the historical time series through the projections software that utilizes a variety of economic models to produce the initial target year projections by industry.

  3. Review the initial projection for each industry and select the best economic model's projection based on prior historical growth rates, knowledge of the economy, and comparisons to other forecasts.

  4. Consult with the experts. The EDD's economist reviews the state industry projections, and the LMID's local labor market consultants review local area projections. The consultants use their knowledge of the local economy, and solicit the input of local experts to recommend adjustments to the projections.

  5. Incorporate recommended changes as appropriate and finalize the projections for public dissemination.

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Industry Employment Projections

The projections are located in the EDD Data Library and features the following information:

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Economic Assumptions

The projections are based on the following assumptions:

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Other Considerations

Identifying future industry trends helps economic development professionals foster compatible growth and promote state and local area strengths. Local government agencies, non-profit agencies, researchers, and other interested parties use future industry trends to formulate plans and proposals. Job seekers and professionals who provide counseling and/or job placement may use the industry projections to learn about employment opportunities in various industries. However, it is important to keep in mind that projections are just one planning tool and that the estimates are based on information available at the time the projections were produced.

For additional information on economic conditions in a particular region, contact the LMID's local labor market consultants.

Revised: April 2018

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