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Leading Locations for 2016 Commentary: Small and Mid-Size Cities Dominate

There are currently 13 small- to mid-sized cities in the top 20 for Economic Strength, while in 2015 there were only 8 in the top 20. That is a 62 percent increase.

Q2 2016
My first surprise is the strength of two Midwestern cities. Grand Rapids, Michigan, and Columbus, Indiana, are punching way above their weight. The report describes Grand Rapids as a “Large” MSA and, while technically accurate, the city is probably one of the smallest “large” cities. For two cities that are small to medium in size, ranking #3 and #4 overall this year and #3 and #8 last year is remarkable.

My second surprise is how far and how fast the Texas cities have dropped. Houston went from #2 in 2015 to #225 this year. Plus, in 2015 there were six Texas cities in the top 20 for overall performance and this year there are none. The rate and depth of the drop indicates just how big the energy sector is in the U.S. For companies looking to expand, now would be a good time to look at Texas. Labor and construction costs are soft and, while far from liquidation prices, there are bargains to be had.

My third surprise is the strength of small to mid-size communities in this year’s report. There are currently 13 small- to mid-sized cities in the top 20 for Economic Strength, while in 2015 there were only 8 in the top 20. That is a 62 percent increase. What’s remarkable is that this growth occurred in communities that are typically lacking in airport accessibility or high rankings in the millennial aged work force. There must be something else that is not quite apparent from the data driving this performance. (I think there is a bigger story here.)

Leading Locations for 2016 Results

Area Development’s research desk compiled the statistics for this report. Locations were ranked according to the methodology explained herein. This article was written by Steve Stackhouse-Kaelble, Staff Editor.
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