THE ECONOMIC IMPACT OF MANUFACTURING INDUSTRY ON THE ECONOMY OF WOLISO TOWN

Abstract

Manufacturing industry is an important economic sector in many developed and developing countries. The purpose of this study was to assess economic impacts of manufacturing industry in the economy of Woliso town. In this study the research was focus on direct and induced economic impact and exclude indirect economic impact because of different limitation. For the purpose of this study, the researcher used quantitative method with quantitative data. A total of 290 questionnaires were distributed to owners or managers and employees of manufacturing industry selected based on random sampling technique of which 194 (66.89%) questionnaires were properly filled and returned. The secondary data were collected from office of Woliso town labor and social affairs, office of Woliso town investment, office of micro and small enterprises. The Microsoft-Excel 2010 version was used to analyze the primary data that collected through questionnaire. The result is presented in the form of tables and figures with discussions for further interpretation on the findings. The findings indicate that there is a positive direct economic impact of manufacturing industry in employment opportunities, income generation and tax revenue on the economy of Woliso town. The effect of manufacturing industry has 1051 employment, 26532000 birr income generation and 5850000 birr tax revenue for local government. Manufacturing industry has induced economic impact in household and house rent in the economy of Woliso town. The share of large scale manufacturing industry in employment, income generation and tax revenue is larger than small scale manufacturing. Therefore, based on the findings the researcher has recommended that the government must provide incentive to develop the share of small scale manufacturing industry. Another recommendation is the government creates different policy to link large and small manufacturing industry. Economic impact assessment is important instrument to understand economic impacts in different sector so, the government established institution that collect and organize important economic data that support the process of economic impact assessment.