How is the Base Multiplier calculated?

The Base Multiplier is calculated by determining how much additional economic activity is generated in an area based on the number of jobs within the basic industry sector. This is done by taking the total employment in an area and dividing it by the number of jobs within the basic or primary industries. The basic industries are typically those that bring in revenue from outside the region, which spurs further economic activity, and thus greater job creation in other sectors.

This calculation reflects the relationship between the basic sector and the overall economy. As more jobs in the basic sectors are created, additional jobs in support and ancillary industries tend to follow, which is why the total employment figure is divided by the basic industry employment figure to arrive at the Base Multiplier. This multiplier can then be used to help estimate the overall economic impact of changes within the basic industry sector on the local economy.