YWG contributes directly to employment in the Winnipeg region, as well as the provincial and national Gross Domestic Product (GDP) at large, through its business and commercial activities and operations. More importantly, it also acts as an economic catalyst, facilitating the growth of regional businesses and industrial sectors. The economic contribution of the airport to the community is termed the Economic Impact of YWG.
This study examines the economic impact of YWG on the provincial economy. One of the most important components of the YWG economic impact is given particular attention here: Employment Impact. Other economic impact measures such as wages, GDP, and economic output are also considered and presented.
Categories of Economic Impact
The three major components of economic impact are direct, indirect, and induced impacts, as described below. These distinctions are used as a base for the estimation of the total economic impact of YWG. Each of these three components requires different tools of analysis. Employment impact analysis determines the economic impact in terms of jobs created and salaries and wages paid out. In the case of the airport, the direct, indirect, induced, and total numbers of FTEs or person years created at the airport are examined to produce a snapshot in time of airport operations.
Direct impacts account for the economic activity of the target sector itself. For instance, all employment that is directly related to the operation and management of YWG, including businesses located onsite at the airport as well as airport-dependent businesses located offsite, would be considered direct employment. Thus, the direct employment base includes airline employees, fixed base operators, aircraft maintenance, ground handling, customer service, airport authority staff, etc.
Figure 1 6: Categories of Economic Impact Generated and Facilitated by YWG
Indirect impacts are those that result because of the direct impacts. This involves employment in downstream industries that arise from the presence of YWG. For instance, indirect employment includes the portion of employment in supplier industries which are dependent on sales to the air transport sector, e.g. food wholesalers that supply food for catering on flights.
Induced employment is generated from expenditures by individuals employed directly or indirectly by the airport. For instance, if an airline employee at YWG decides to renovate her home, this would result in induced employment hours in the general economy as the renovation would support hours of employment in the construction industry, the construction materials industry, etc. Induced impact is often called the “household-spending effect”.
Total impacts are the sum of direct, indirect, and induced effects. These three categories of impacts are summarised in Figure 1-6.
- 1 A full-time equivalent (FTE) of employment accounts for part-time and seasonal employment.
- 2 Economic impact is different from a cost-benefit analysis that weighs benefits against costs.