ACCORDING TO the key economic indicators. With the GDP growth rate expected to remain between 2 and 3 percent, unemployment hovering just below 4 percent, and inflation or deflation in check for now, there’s a general feeling of optimism sweeping much of the nation. As of May, the U.S. economy had expanded for 107 months, making it the second-longest expansion on record. THE U.S. ECONOMIC OUTLOOK IS HEALTHY www.areadevelopment.com/LeadingLocations2018 NOTE: Area Development ’s research desk compiled the statistics for this report. Locations were ranked according to the methodology explained herein. Interactive report available at By Karen E. Thuermer Reprinted with permission, Area Development Magazine, Q2 2018 Issue.
Transcript
ACCORDING TO the key economic
ind icators . W i th the GDP growth rate expected to
remain b e t w e e n 2 a n d 3 p e rc e n t , u n e m p l o y m e n t
h o v e r i n g j u s t b e l o w 4 p e rc e n t , a n d i n f l a t i o n o r
d e f l a t i o n i n c h e c k f o r n o w , t h e re ’ s a g e n e r a l
f e e l i n g o f o p t i m i s m s w e e p i n g m u c h o f t h e n a t i o n .
A s o f M a y , t h e U . S . e c o n o m y h a d e x p a n d e d f o r
1 0 7 m o n t h s , m a k i n g i t t h e s e c o n d - l o n g e s t e x p a n s i o n
o n re c o rd .
THE U.S. ECONOMIC OUTLOOK IS HEALTHY
www.areadevelopment.com/LeadingLocations2018
NOTE: Area Development’s research desk compi led the stat ist ics for this report. Locations were ranked according to the methodology explained herein. Interactive report avai lable at
B y K a r e n E . T h u e r m e r
63ADQ22018.indd 63 6/5/18 3:26 PM
Reprinted with permission, Area Development Magazine, Q2 2018 Issue.
“Tax cuts, low unemployment, and rising wages point
to more spending power to fuel economic growth,” says
Dr. Christine Chmura, CEO and chief economist at Chmura
Economics & Analytics. “Increased investment by businesses
in new plants and equipment resulting from corporate tax cuts
and reductions in regulations has been supporting economic
growth and should support future growth. If economic growth
lasts 15 more months, it will hit record territory in July 2019,
when it would surpass the longest expansion on record at 121
months.”
2 AREA DEVELOPMENT for free site information, visit us online at www.areadevelopment.com
LEADING LOCATIONS
27 Atlanta-Sandy Springs-Roswell GA South Atlantic
28 Hartford-West Hartford- CT NewEast Hartford England
29 Chicago-Naperville- IL MidwestArlington Heights
Rank CITY/MSA State Rank CITY/MSA State Region Region
63ADQ22018.indd 64 6/5/18 3:27 PM
To help track growth trends, Area Development recently
released its 8th annual “Leading Metro Locations” report
that takes a multifaceted look at 394 metropolitan statistical
areas (MSAs) and ranks them based on “Prime Workforce,”
“Economic Strength,” “Year-Over-Year Growth,” and “Five-Year
Economic Growth.” The results come from crunching a wide
variety of data and are culminated in its list of “Leading Metro
Locations.” The analysis also uses the same data to determine
the top large, medium-size, and small metros.
As was the case last year, northern California —
especially the San Francisco Bay area — and the Pacific
and Mountain regions made a good showing in this year’s
report. In fact, 14 of the top 20 metros in the survey are
in the Pacific or Mountain regions. The top three are San
Jose-Sunnyvale-Santa Clara, San Francisco-Redwood City-
South San Francisco, and Oakland-Hayward-Berkeley. These
3 AREA DEVELOPMENT for free site information, visit us online at www.areadevelopment.com
LEADING LOCATIONS
Area Development ranked 394 MSAs across 21 economic and workforce indicators. These 21 indicators were pulled from seven (7) data sets (sub-categories) originating from three sources: the Bureau of Labor Statistics, U.S. Census American Community Survey, and Emsi.
Each MSA earned a ranking within each of the 21 in-dicators based on its statistical per-formance within that indicator. The MSA with the best performance in a certain indicator earned a ranking score of “1” and the MSA with the worst perfor-mance earned a ranking score of “394.”
To calculate “Overall Rank-ing,” we added the total ranking across all indica-tors for each MSA and then divided by the total num-ber of indica-tors to reach an average ranking. The MSA with the lowest average earned the #1 overall ranking, while the MSA with the highest average ranked #394 overall.
We also calculated overall ranking across four catego-ries: “Prime Work-force,” “Economic Strength,” “Five-Year Growth,” and “Year-Over-Year Growth.” To calculate the overall ranking within these four catego-ries, we produced an average ranking across only certain indicators. An indi-cator did not have to be exclusive to our category rank-ings. For instance, the “Employment Growth Net 5-Year Change as Percent-age of Population” is used within both the “Economic Strength” and “Five-Year Growth” categories.
We have also produced a set of lists, using our overall results and category results, grouping the MSAs by region and size.
We ranked the Top 5-20 MSAs in eachregion (definedby Area Devel-opment Onlinetaxonomy), andwe also ranked thetop MSAs acrossthree size groups:“Small” (popula-tion < 160,000),“Mid-Size” (popu-lation 160,000–600,000), and“Big” (population> 600,000). Weranked the cities within each size group against our overall rankings and “Prime Work-force,” “Economic Strength,” “Five-Year Growth,” and “Year-Over-Year Growth” categories.
For a full explana-tion of the method-ology behind our Leading Locations report, go to www.areadevelopment.com/Leading Locations2018/methodology.
METHODOLOGY
1 San Jose-Sunnyvale-Santa Clara CA 1
2 San Francisco-Redwood City-South San Francisco CA 2
locations benefit from clusters of high-tech and biotech
companies and renowned institutions of higher education,
including UCSF, Stanford, and UC Berkeley, that provide a
steady stream of skilled workers and R&D.
San Jose-Sunnyvale-Santa Clara, once the world’s
largest canning and dried-fruit packing center prior to World
War II, has sustained high rankings largely because it is
home to the world-renown Silicon Valley, one of the hottest
addresses in the world.
“High technology and an educated workforce will always
be key factors that differentiate the leading locations for firm
expansion,” comments Chmura. “The most profitable firms rely
on a creative and productive workforce. Technology underpins
a firm’s ability to be more productive, and education supports a
worker’s ability to perform at high levels.”
Showing a particularly upward swing is Oakland-Hayward-
Berkeley, which rose from a 25th position in 2016 to 3rd in
both 2017 and 2018 based on improved economic strength
and workforce. The location benefits from less expensive and
more available real estate compared to San Francisco and
Silicon Valley locations.
Other northern Pacific locations made overall strong
showings. Most noteworthy, Portland-Vancouver-Hillsboro,
OR-WA received its highest overall ranking (7th) in the
4 AREA DEVELOPMENT for free site information, visit us online at www.areadevelopment.com
LEADING LOCATIONS
1 Reno NV 4
2 Elkhart-Goshen IN 8
3 Boulder CO 13
4 Santa Rosa CA 14
5 Fort Collins CO 19
6 Santa Cruz-Watsonville CA 23
7 Norwich-New London CT 34
8 Barnstable Town MA 37
9 Portland-South Portland ME 41
10 Kalamazoo-Portage MI 42
11 Vallejo-Fairfield CA 44
12 Fort Wayne IN 46
13 San Luis Obispo-Paso Robles-Arroyo Grande CA 57
14 Provo-Orem UT 58
15 Lansing-East Lansing MI 60
16 Manchester-Nashua NH 62
17 Salem OR 66
18 Fayetteville-Springdale-Rogers AR-MO 68
19 Oshkosh-Neenah WI 71
20 Ann Arbor MI 72
TOP 20Mid-Size Metros
Rank CITY/MSA State
Rank Within Leading
Locations
1 Napa CA 5
2 Columbus IN 6
3 Carson City NV 9
4 Bend-Redmond OR 17
5 Wausau WI 20
6 Kokomo IN 31
7 St. George UT 35
8 Sheboygan WI 51
9 Kankakee IL 54
10 Niles-Benton Harbor MI 56
11 Fond du Lac WI 65
12 Elizabethtown-Fort Knox KY 69
13 Glens Falls NY 77
14 Albany GA 86
15 Winchester VA-WV 87
16 New Bern NC 97
17 Jackson MI 98
18 Idaho Falls ID 103
19 Sumter SC 107
20 Albany OR 108
TOP 20Smal l Metros
Rank CITY/MSA State
Rank Within Leading
Locations
63ADQ22018.indd 68 6/5/18 3:28 PM
eight years of the survey. Helping the area is its tech boom
and desirable lifestyle. Here both hardware and software
sectors are growing strongly.
Overall, the software industry is 2.5 times more
concentrated in Oregon than other states. It doesn’t hurt
that the commercial real estate market in Portland continues
to be hot with tech companies, along with their supporting
businesses, taking much of the space. Industrial space is also
breathing new life into the market.
Chmura adds: “Many metro areas in the Pacific Northwest
and Mountain regions were hit harder than other areas
around the nation during the Great Recession. Home prices,
for example, were down significantly. Economic growth in
these regions lagged the nation in the first few years after the
recession as they worked through the imbalances.”
Bucking Workforce TrendsIn recent years, there’s been plenty of news about the
skilled labor shortage. The Leading Locations analysis shows
that more attractive tax structures support employment
growth in the first few years after taxes are lowered. “Other
factors, such as quality of life and a strong public K-12
education system, are important as well,” says Chmura.
According to the report, a number of cities are bucking the
labor shortage trend and rising in their overall ranking. Among
those showing significant upswings are Philadelphia and Salt
Lake City. Philly ranked an overall 47th in 2018 up from 141st
in 2017. Salt Lake jumped to 12th this year from 32 in 2017.
Both cities attribute their improved marks to increasingly
attracting educated workers. It doesn’t hurt that Philadelphia is
home to University of Pennsylvania with its Wharton School of
Business as well as Drexel University and Temple University.
Stalwarts like Columbus, Ind., and San Jose, Calif., have
consistently shown high rankings, although the two places
could not be more different from one another. The point here
is one does not have to be a tech haven or a large city to
score well year after year. What keeps the small Midwest city
of Columbus, Ind., among the top-10 MSAs year after year is
its ability to attract an educated workforce — the MSA ranks
fourth among the top metros for Prime Workforce.
Also making Columbus attractive has been its
ability to revitalize the city through architectural excellence,
5 AREA DEVELOPMENT for free site information, visit us online at www.areadevelopment.com
LEADING LOCATIONS
1 Elkhart-Goshen IN 8
2 Napa CA 5
3 Carson City NV 9
4 San Jose-Sunnyvale-Santa Clara CA 1
5 Norwich-New London CT 34
6 San Francisco-Redwood City-South San Francisco CA 2
7 Reno NV 4
8 Hartford-West Hartford- East Hartford CT 28
9 Worcester MA-CT 49
10 Kankakee IL 54
11 Boston-Cambridge MA 33
12 Kokomo IN 31
13 Oakland-Hayward-Berkeley CA 3
14 Fort Wayne IN 46
15 Portland-Vancouver-Hillsboro OR-WA 7
16 Urban Honolulu HI 30
17 Sheboygan WI 51
18 Lake County-Kenosha County IL-WI 58
19 Santa Rosa CA 14
20 Wausau WI 20
21 Boulder CO 13
22 Denver-Aurora-Lakewood CO 10
23 Grand Rapids-Wyoming MI 15
23T Barnstable Town MA 37
25 Vallejo-Fairfield CA 44
26 Warren-Troy-Farmington Hills MI 16
27 Santa Cruz-Watsonville CA 23
28 Fort Collins CO 19
29 Green Bay WI 93
30 Detroit-Dearborn-Livonia MI 43
TOP 30 MetrosEconomic Strength
Rank CITY/MSA State
Rank Within Leading
Locations
63ADQ22018.indd 70 6/5/18 3:28 PM
a task that began in the mid-20th century when the
Cummins Foundation made it a mecca of modern
architecture. Economic development efforts, widespread
beautification innovations, various tax incentives, and
increased law enforcement have helped Columbus
overcome downward economies.
Besides Columbus, other small cities that show noteworthy
marks for their Prime Workforce include Bend-Redmond, Ore.,
Auburn-Opelika, Ala., and St. George, Utah. Mid-size metros
scoring high for their Prime Workforce include Olympia-Turnwater
in Washington State, Reno, Nev., and Gainesville, Fla.
Economic GrowthWhile some locations are economically sound and offer many
attributes, those that show both year-over-year and longer-
term growth receive higher marks in this analysis. In the
past, there have been numerous booming growth cities in
the South and Southwest – e.g. Austin, Texas, and Nashville,
Tenn. But in recent years, overall rankings for these cities have
slipped. The Nashville MSA fell to 26th from the No. 7 spot in
2017, and Austin dropped from a 10th place ranking in 2015
to 46th in 2016, 47th in 2017, and 50th for 2018.
Many locations fair well due to industry clusters that
set up shop in regions around the country. For example,
the South Atlantic has over the years become a magnet for
auto and advanced manufacturing, particularly along the
Interstate 75 corridor. This location has been beneficial to
Dalton, Ga., best known as being home to the carpet and
floor covering industry. While ranked 196th overall as a
Leading Metro Location, Dalton made a particular strong
No. 3 showing for Five-Year Economic Growth, thanks to
its innovation in cutting-edge technology, applied science,
global marketing, and services. These have led to new
high-tech products and patents.
Year-Over-Year Growth rankings indicate some surprises.
Kankakee, Ill., which ranked 54th overall, ranked first in
Year-Over-Year Growth. Kankakee County is regarded
among the fastest-growing metros in Illinois and benefits
from its geographic location 45 miles south of downtown
AREA DEVELOPMENT | Q2/2018 6
1 San Francisco-Redwood City-South San Francisco CA 2
2 San Jose-Sunnyvale-Santa Clara CA 1
3 Nashville-Davidson-Murfreesboro--Franklin TN 26
4 Columbus IN 6
5 Oakland-Hayward-Berkeley CA 3
6 Seattle-Bellevue-Everett WA 11
7 Bend-Redmond OR 17
8 Salt Lake City UT 12
9 Dallas-Plano-Irving TX 22
10 Philadelphia PA 47
11 Orlando-Kissimmee-Sanford FL 48
12 Charlotte-Concord-Gastonia NC-SC 32
13 Denver-Aurora-Lakewood CO 10
14 Olympia-Tumwater WA 79
15 Portland-Vancouver-Hillsboro OR-WA 7
16 Reno NV 4
17 West Palm Beach-Boca Raton- FL 67Delray Beach
18 New York-Jersey City- NY-NJ 18White Plains
19 Gainesville FL 229
20 Auburn-Opelika AL 178
21 Columbus OH 63
22 Atlanta-Sandy Springs-Roswell GA 27
23 Austin-Round Rock TX 50
24 St. George UT 35
25 Kalamazoo-Portage MI 42
26 Boulder CO 13
27 Tallahassee FL 192
28 Grand Rapids-Wyoming MI 15
29 San Luis Obispo-Paso Robles-Arroyo Grande CA 57
30 Sacramento-Roseville-Arden-Arcade CA 45
TOP 30 MetrosPr ime Workforce
Rank CITY/MSA State
Rank Within Leading
Locations
63ADQ22018.indd 71 6/5/18 3:28 PM
Chicago along the I-57 corridor. In 2014–2016 the total capital
investment in Kankakee County exceeded $1.2 billion. Its
website emphasizes “ready access to the interstate, rail, all
utilities, fiber, and workforce” in a “diverse business
community, including Fortune and Global 500 companies.”
Additionally, two Enterprise Zones provide property tax
7 AREA DEVELOPMENT for free site information, visit us online at www.areadevelopment.com
LEADING LOCATIONS
1 Kankakee IL 54
2 Carson City NV 9
3 Reno NV 4
4 Oakland-Hayward-Berkeley CA 3
5 Pine Bluff AR 299
6 Norwich-New London CT 34
7 Elkhart-Goshen IN 8
8 Kokomo IN 31
9 Sheboygan WI 51
10 San Francisco-Redwood City- South San Francisco CA
2
11 Boulder CO 13
12 Santa Cruz-Watsonville CA 23
13 Sumter SC 107
14 Merced CA 166
15 Mansfield OH 211
16 Glens Falls NY 77
17 San Jose-Sunnyvale-Santa Clara CA 1
18 Warren-Troy-Farmington Hills MI 16
19 Terre Haute IN 220
20 Charleston-North Charleston SC 21
21 Redding CA 94
22 Camden NJ 39
22T Decatur IL 150
24 Barnstable Town MA 37
25 Salt Lake City UT 12
26 Springfield MA 85
27 Lake County-Kenosha County IL-WI 58
28 Detroit-Dearborn-Livonia MI 43
29 Wheeling WV-OH 231
30 Evansville IN-KY 102
TOP 30 MetrosYear-Over-Year Growth
Rank CITY/MSA State
Rank Within Leading
Locations
1 Napa CA 5
2 Elkhart-Goshen IN 8
3 Dalton GA 196
4 San Francisco-Redwood City-South San Francisco CA 2
5 San Jose-Sunnyvale-Santa Clara CA 1
6 Reno NV 4
7 Santa Cruz-Watsonville CA 23
8 St. George UT 35
9 Columbus IN 6
10 Bend-Redmond OR 17
11 Detroit-Dearborn-Livonia MI 43
12 Gainesville GA 82
13 Grand Rapids-Wyoming MI 15
14 Vallejo-Fairfield CA 44
15 Wausau WI 20
16 Atlanta-Sandy Springs-Roswell GA 27
16T Fort Collins CO 19
18 Kankakee IL 54
19 Provo-Orem UT 58
20 Riverside-San Bernardino-Ontario CA 112
21 Denver-Aurora-Lakewood CO 10
22 Santa Rosa CA 14
23 North Port-Sarasota-Bradenton FL 114
24 Cincinnati OH-KY-IN 24
25 Sheboygan WI 51
26 Anaheim-Santa Ana-Irvine CA 36
27 Portland-Vancouver-Hillsboro OR-WA 7
28 Oakland-Hayward-Berkeley CA 3
29 Fort Wayne IN 46
29T Battle Creek MI 132
TOP 30 Metros F ive-YearEconomic Growth
Rank CITY/MSA State
Rank Within Leading
Locations
63ADQ22018.indd 72 6/5/18 3:29 PM
abatement, sales tax exemptions, and other growth incentives.
Needless to say, “Creating a competitive position varies based
on the type of firm that is expanding,” Chmura says. “Some
manufacturing plants might need proximity to rail or a large water
supply, while software providers need good Internet access.”
Metro size also did not determine whether or not a
location showed economic strength or longer-range economic
growth. Small metros like Elkhart-Goshen, Ind., and Napa,
Calif., took the first two spots in these categories, with Elkhart-
Goshen ranked No. 1 for Economic Strength and No. 2 for
Five-Year Economic Growth, while Napa was No.1 for Five-Year
Economic Growth and No. 2 for Economic Strength.
When asked about Elkhart-Goshen’s success, Mark A.
Dobson, President/CEO of the Economic Development
Corporation (EDC) of Elkhart County, told Area Development, “At
the height of the Great Recession, we never lost our optimism.
This amazing renaissance was led by our entrepreneurial spirit.
Corporate leadership combined with a workforce that has an
amazing work ethic to drive our recovery. No matter what we
faced, we remained true to vision.”
Carson City, Nev., also has experienced a remarkable
trajectory. Once known for the Comstock Lode, today Carson
City ranks third among the Top 20 Small Metros and ninth
overall. In 2015, it ranked 308th overall; in 2016, 191st
overall; and in 2017, 163rd overall. Part of the reason for its
ascent is Year-Over-Year Growth.
Robert Hooper, president and CEO of the Northern
Nevada Development Authority, attributes the region’s growth
to Nevada’s governor and state legislature putting in place
“the right formula for recovery and job creation” during the
Great Recession. “This allowed Carson City to leverage its
streamlined building process, attractive tax structure and low-
cost fees, economical industrial real estate, and competitive
utility rates for commercial operations to stabilize and grow
its economy,” he says. “The city’s geographic location,
easy access to the Silver State’s multi-modal infrastructure,
and close proximity to major U.S. markets and deep-sea
ports also play a role in the growth of the area’s advanced
manufacturing, logistics, and construction industries.”
In essence, this is what is driving growth in many U.S.
metros in today’s economy. ˚˚˚LEADING METRO LOCATIONS SPONSORS
NEVADAStan Thomas, Exec. VP, Business DevelopmentEconomic Development Authority of Western Nevada (EDAWN)5190 Neil Road, Ste. 110Reno, NV [email protected]
INDIANAMark A. Dobson, IOM, AE – President & CEOEconomic Development Corporation of Elkhart County300 NIBCO Parkway, Suite 201Elkhart, IN 46516574-293-5627Cell: [email protected]
Jason Hester, CEcD, Executive DirectorGreat Columbus Economic Development Corporation440 Fifth StreetColumbus, IN [email protected]
AREA DEVELOPMENT | Q2/2018 8
Emsi is the industry leader in labor market data and expert analysis to professionals in economic development, workforce development, commercial real estate, higher education, and talent acquisition. Emsi provides regional workforce, economic, and
location intelligence data to aid businesses and communities in site selection decisions, workforce advancement, regional comparisons, and retention and expansion efforts. Learn more at www.economicmodeling.com.
