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Leading Locations for 2014 Methodology

Area Development Magazine Special Presentation (Q2 2014)
Leading Locations for 2014 Resources
Area Development ranked 379 MSAs across 21 economic and work force indicators. These 21 indicators were pulled from seven (7) data sets (sub-categories) originating from four sources: the Bureau of Labor Statistics, Bureau of Economic Analysis, U.S. Census American Community Survey and Moody’s Analytics.

Each MSA earned a ranking within each of the 21 indicators based on its statistical performance 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 performance earned a ranking score of "379."

To calculate "Overall Ranking," we added the total ranking across all indicators for each MSA and then divided by the total number of indicators to reach an average ranking. The MSA with the lowest average earned the #1 overall ranking, while the MSA with the highest average ranked #380 overall.

We also calculated overall ranking across four categories: "Prime Work Force," "Economic Strength," "Recession-Busting Cities" and “Year-Over-Year Growth.” To calculate the overall ranking within these four categories, we produced an average ranking across only certain sub-category indicators. An indicator did not have to be exclusive to our category rankings. For instance, the "Employment Growth Net 3-Year Change as Percentage of Population" was used within both the "Economic Strength" and "Recession-Busting Cities" 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 each region (defined by Area Development Online taxonomy), and we also ranked the top MSAs across three size groups: "Small" (population < 160,000), "Mid-sized" (population 160,000-600,000), and "Big" (population > 600,000). We ranked the cities within each size group against our overall rankings and "Prime Work Force," "Economic Strength," "Recession-Busting Cities" and “Year-Over-Year Growth” categories.

Sub-Categories and Indicators Used in the Leading Locations Report


Sub-Category:
"Young, Prime Work Force"

Indicators:

  • 2012 work force 18-44 years with Bachelor's degree or higher as % of total work force1

  • Work force 18-44 years with Bachelor's degree or higher as % of total work force1 3-year change rank (2012-2009)

Data Set Source:GEOGRAPHICAL MOBILITY IN THE PAST YEAR BY EDUCATIONAL ATTAINMENT FOR CURRENT RESIDENCE IN THE UNITED STATES 2008-2011 American Community Survey 3-Year Estimates - U.S. Census Bureau American Community Survey




Sub-Category:"Prime Work Force Inward Migration"

Indicators:

  • Total inward migration for 2012 with Bachelor's degree or higher as a % of total work force1 rank

  • Total inward migration Bachelor's degree or higher as a % of total work force1 3-year change rank (2012-2009)

Data Set Source:EDUCATIONAL ATTAINMENT 2009-2012 American Community Survey 3-Year Estimates - U.S. Census Bureau American Community Survey

Economically vital as well as physically or culturally appealing regions do best in attracting an educated work force from outside regions.



Sub-Category:"Local Area Unemployment Rate"

Indicators:
  • December 2013 local area unemployment rate rank

  • Local area unemployment rate 1-year change rank (December 2013-December 2012)

  • Local area unemployment rate 3-year change rank (December 2013-December 2010)

  • Local area unemployment rate 5-year change rank (December 2013-December 2008)

Data Set Source:Local Area Unemployment Rate, U.S. Bureau of Labor Statistics



Sub-Category:
"Wage and Salary Growth"

Indicators:
  • Average hourly earnings 1-year rate change rank (December 2013- December 2012)

  • Average hourly earnings 3-year rate change rank (December 2013- December 2010)

  • Average hourly earnings 5-year rate change rank (December 2013-December 2008)

Data Set Source:State and Area Average Hourly Earnings (Private) 2008 to 2013, U.S. Bureau of Labor Statistics

Wage and salary growth measures the quality of the jobs being created and sustained. Earnings are a measure of productivity and economic contribution. "As regional economies emerge from one of the most severe recessions in recent history, changes in earnings can be an early indicator of developing opportunities or challenges." - Garner Economics LLC



Sub-Category:"Per Capita GDP"

Indicators:

  • Per capita real GMP Q4 2013 rank3

  • Per capita real GMP 1-year rate change rank (Q4 2013- Q4 2012)3

  • Per capita real GMP 3-year rate change rank (Q4 2013 - Q4 2010)3

  • Per capita real GMP 5-year rate change rank (Q4 2013 - Q4 2008)3

Data Set Source: Gross Metro Product: Total, (Bil. $, SAAR) - BEA; BLS; Moody's Analytics. Moody's Analytics is a leading independent provider of data, analysis, modeling and forecasts on national and regional economies, financial markets, and credit risk.

A rise in per capita GMP signals growth in the economy and tends to translate as an increase in productivity.



Sub-Category:
"Manufacturing Job Growth"

Indicators:

  • Manufacturing/goods-producing employment 1-year net change as % of population2 rank (December 2013-December 2012)

  • Manufacturing/goods-producing employment 3-year net change as % of population2 rank (December 2013-December 2010)

  • Manufacturing/goods-producing employment 5-year net change as % of population2 rank (December 2013-December 2008)

Data Set Source:Bureau of Labor Statistics Current Goods Producing Employment Statistics - CES (non-seasonally adjusted)

A measure of growth in the goods-producing sectors, primarily consisting of manufacturing and energy.



Sub-Category:
"Job Growth"

Indicators:
  • Employment growth net 1-year change as percentage of population2 rank (December 2013-December 2012)

  • Employment growth net 3-year change as percentage of population2 rank (December 2013-December 2010)

  • Employment growth net 5-year change as percentage of population2 rank (December 2013-December 2008)

Data Set Source:U.S. Bureau of Labor Statistics Current Total Non-Farm Employment Statistics - CES (Non-seasonally adjusted)



Ranking Categories


Overall Ranking
Each MSA is ranked based on the average sum total ranking across all seven (7) data sets and 21 indicators.



Prime Work Force
In most of the cities that rank well in our "Prime Work Force" indicators, you will find a strong university, providing the kind of technology-transfer capacity that attracts a talented labor pool, sparks entrepreneurial activity, and provides an attractive destination for the types of startups and advanced manufacturing companies that will propel metropolitan economies as the economy bounces back and takes shape.

Indicators:

  • 2012 work force 18-44 years with Bachelor's degree or higher as a percentage of total work force1

  • Work force 18-44 years with Bachelor's degree or higher as a percentage of total work force 3-year change rank1 (2012-2009)

  • Total inward migration 2012 with Bachelor's degree or higher as a percentage of total work1 force rank

  • Total inward migration with Bachelor's degree or higher as a percentage of total work force1 3-year change rank (2012-2009)

  • Average hourly earnings 1-year rate change rank (December 2013- December 2012)

  • Average hourly earnings 3-year rate change rank (December 2013- December 2010)

  • Average hourly earnings 5-year rate change rank (December 2012-December 2008)



Economic Strength
We looked at all economic indicator factors and excluded work force indicators.

Indicators:


  • Per capita real GMP Q4 2013 rank

  • Per capita real GMP 1-year rate change rank (Q4 2013- Q4 2011)3

  • Per capita real GMP 3-year rate change rank (Q4 2013 - Q4 2010)3

  • Per capita real GMP 5-year rate change rank (Q4 2013 - Q4 20083
  • )
  • Manufacturing/goods-producing employment 1-year net change as % of population2 rank (December 2013-December 2012)

  • Manufacturing/goods-producing employment 3-year net change as % of population2 rank (December 2013-December 2010)

  • Manufacturing/goods-producing employment 5-year net change as % of population2 rank (December 2013-December 2008)

  • Employment growth net 1-year change as % of population2 rank (December 2013-December 2012)

  • Employment growth net 3-year change as % of population2 rank (December 2013-December 2010)

  • Employment growth net 5-year change as % of population2 rank (December 2013-December 2008)

  • December 2013 local area unemployment rate rank

  • Local area unemployment rate 1-year change rank (December 2013-December 2012)

  • Local area unemployment rate 3-year change rank (December 2013-December 2010)

  • Local area unemployment rate 5-year change rank (December 2013-December 2008)



Recession-Busting Cities
We looked at only the economic indicators ranking change from 2007 (just around the beginning of the recession) against the most recent data for that indicator. This provides some measure of which cities have come back the furthest from where they originally were.


Indicators:

  • Local area unemployment rate 5-year change rank (December 2013-December 2008)

  • Average hourly earnings 5-year rate change rank (December 2013-December 2008)

  • Per capita real GMP 5-year rate change rank (Q4 2013 - Q4 2008)

  • Manufacturing/goods-producing employment 5-year net change as % of population2 rank (December 2013-December 2008)

  • Employment growth net 5-year change as percentage of population2 rank (December 2013-December 2008)



"Year-Over-Year Growth” Cities We looked at only the economic indicators ranking change from 2012 against the most recent data for that indicator. This provides some measure of which cities have had the strongest short-term economic growth.

Indicators:

  • Local area unemployment rate 1-year change rank (December 2013-December 2012)
  • Average hourly earnings 1-year rate change rank (December 2013-December 2012)
  • Per capita real GMP 1-year rate change rank (Q4 2013 - Q4 2012)
  • Manufacturing/goods-producing employment 1-year net change as % of population2 rank (December 2013-December 2012)
  • Employment growth net 1-year change as percentage of population2 rank (December 2013-December 2012)



1 Work force total is provided for each year by the same 2009-2012 American Community Survey 3-Year Estimate used for educational attainment metrics.

2 Job growth estimates are measured against the 2010 population of each metropolitan area based on U.S. Census statistics. We used this instead of "total work force" because work force figures fluctuate; as unemployed people stop looking for jobs, they are no longer considered part of the work force. This could skew percentages higher, rewarding metropolitan areas whose work forces had declined due to dropouts.

3 Per Capita GMP is calculated using 2010 population of each metropolitan area based on U.S. Census statistics
Article Discussion
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