Investor Presentaiton
Section III - The Economic Impact
of Agribusiness on South Carolina
METHODOLOGY
As outlined above, the agribusiness cluster is one of
the primary components of South Carolina's economy,
generating billions of dollars in economic activity and
directly employing thousands of workers across the
state every year. Yet these activities do not provide a
complete picture of the impact of agribusiness on the
Palmetto State. The expenditures that occur as part
of all ongoing operations of businesses within the
cluster represent direct economic activity within the
local regions in which they are made. However, these
expenditures also lead to additional job creation and
economic activity by way of the economic multiplier
effect (or economic ripple effect).
Economic multiplier effects can be divided into direct,
indirect, and induced impacts. The direct impact reflects
all in-state purchases made by agribusiness firms
themselves, including - for example - those made by
all South Carolina farms, mills, and food processors
& manufacturers. These expenditures incorporate
employee wages and benefits, equipment, building
maintenance, and other overhead or administrative
costs. This spending activity increases demand and
leads to the creation of new jobs and more income for
employees and suppliers of these agribusiness firms.
The indirect impact reflects all additional economic
activity that results from inter-industry linkages
between local firms in South Carolina. For example,
when a South Carolina paperboard mill purchases
raw materials from in-state vendors such as power/
energy or packaging materials, these in-state vendors
experience an increase in demand. To satisfy this
demand, they must purchase additional inputs from
their own suppliers. These suppliers must then purchase
additional supplies as well, and so on. These indirect
effects ripple through the economy and affect
sectors throughout South Carolina.
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