Economic Impact of a New Broiler House in Alabama
The entry of a new 39,000 square foot (66’ x 600’) broiler house in Alabama causes a measurable impact in economic activity within the state in terms of construction and ongoing annual operations.
The construction of a new broiler house requires several purchases including lumber, along with steel, concrete, and equipment. Once construction is completed, the poultry integrator provides feed, veterinary care, and other professional services, while the farmer provides animal care, water, equipment, electricity, and supplies.
The direct purchase of supplies and equipment are known as direct effects. The suppliers and vendors used by the broiler integrator and farmer then purchase inputs to supply the broiler house; these are known as indirect effects. Those who construct the broiler house, those who work for the broiler house once complete, and those who work for the farm’s suppliers and vendors and then use their additional income to make household purchases, these are known as household, or induced, effects.
Taken together, the sum of direct, indirect, and induced effects are known as the total effects and accounts for the total multiplier effect present from the construction and operation of a new broiler house.
Common measures of economic activity are employment (jobs), labor income, output (sales), and value added (output minus the cost of inputs). When a broiler house is added to a local economy, it causes a series of new economic activities (impacts) to take place. For this summary, the economic impacts are broken into construction and operations. The magnitude of these new economic activities is largely related to the presence of industries that supply the needed inputs for a broiler house.
Construction costs to build a new broiler house were assumed to be $12.10 per square foot for a facility of this size.
