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Leading Locations for 2012 Methodology
Area Development Magazine Special Presentation (Summer 2012)
 
Area Development ranked 365 MSAs across 23 economic and work force indicators. These 23 indicators were pulled from seven (7) data sets (sub-categories) originating from three sources: the Bureau of Labor Statistics, Bureau of Economic Analysis, and the U.S. Census American Community Survey.

Each MSA earned a ranking within each of the 23 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 "365."

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 #365 overall.

We also calculated overall ranking across three categories: "Prime Work Force," "Economic Strength," and "Recession-Busting Cities." To calculate the overall ranking within these three 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 10-20 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," and "Recession-Busting Cities" categories.

Sub-Categories and Indicators Used in the Leading Locations Report


Sub-Category:
"Young, Prime Work Force"

Indicators:

  • 2010 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 (2007-2010)

Data Set Source: Educational Attainment 2007-2010, American Community Survey 3-Year Estimates - U.S. Census Bureau




Sub-Category: "Prime Work Force Inward Migration"

Indicators:

  • Total inward migration for 2010 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 (2007-2010)

Data Set Source: Geographical Mobility in the Past Year by Educational Attainment for Current Residents in the United States, American Community Survey 3-Year Estimates - U.S. Census Bureau

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:
  • February 2012 local area unemployment rate rank

  • Local area unemployment rate 1-year change rank (February 2012-February 2011)

  • Local area unemployment rate 3-year change rank (February 2012-February 2009)

  • Local area unemployment rate 5-year change rank (February 2012-February 2007)

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 (February 2012- February 2011)

  • Average hourly earnings 3-year rate change rank (February 2012- February 2009)

  • Average hourly earnings 5-year rate change rank (February 2012-February 2007)

Data Set Source: State and Area Average Hourly Earnings (Private) 2007 to 2012, 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 GDP 2010 rank

  • Per capita real GDP 1-year rate change rank (2010-2009)

  • Per capita real GDP 3-year rate change rank (2010-2007)

Data Set Source: Per Capita Real GDP by Metropolitan Area 2007 to 2010 (chained 2005 dollars), U.S. Bureau of Economic Analysis

A rise in per capita GDP 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 (February 2012-February 2011)

  • Manufacturing/goods-producing employment 3-year net change as % of population2 rank (February 2012-February 2009)

  • Manufacturing/goods-producing employment 5-year net change as % of population2 rank (February 2012-February 2007)

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 rank (February 2012-February 2011)

  • Employment growth net 1-year change as percentage of population2 rank (February 2012-February 2011)

  • Employment growth net 3-year change rank (February 2012-February 2009)

  • Employment growth net 3-year change as percentage of population2 rank (February 2012-February 2009)

  • Employment growth net 5-year change rank (February 2012-February 2007)

  • Employment growth net 5-year change as percentage of population2 rank (February 2012-February 2007)

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

Employment growth is weighted most heavily in the index because of its critical importance to community vitality.



Ranking Categories


Overall Ranking
Each MSA is ranked based on the average sum total ranking across all seven (7) data sets and 23 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:

  • 2010 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 (2007-2010)

  • Total inward migration 2010 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 (2007-2010)

  • Average hourly earnings 1-year rate change rank (February 2012- February 2011)

  • Average hourly earnings 3-year rate change rank (February 2012- February 2009)

  • Average hourly earnings 5-year rate change rank (February 2012-February 2007)



Economic Strength
We looked at all economic indicator factors, excluding all work force and labor factors.

Indicators:

  • Per capita real GDP 2010 rank

  • Per capita real GDP 1-year rate change rank (2010-2009)

  • Per capita real GDP 3-year rate change rank (2010-2007)

  • Manufacturing/goods-producing employment 1-year net change as % of population2 rank (February 2012-February 2011)

  • Manufacturing/goods-producing employment 3-year net change as % of population2 rank (February 2012-February 2009)

  • Manufacturing/goods-producing employment 5-year net change as % of population2 rank (February 2012-February 2007)

  • Employment growth net 1-year change rank (February 2012-February 2011)

  • Employment growth net 1-year change as % of population2 rank (February 2012-February 2011)

  • Employment growth net 3-year change rank (Feb 2012 - Feb 2009)

  • Employment growth net 3-year change as % of population2 rank (February 2012-February 2009)

  • Employment growth net 5-year change rank (February 2012-February 2007)

  • Employment growth net 5-year change as % of population2 rank (February 2012-February 2007)



Recession-Busting Cities
We looked at only the economic indicators ranking change from 2009 (just around the height of the recession) against the most recent data for that indicator. This provides some measure of which cities have come back the furthest from that lowest point. In the case of Per capita Real GDP, for which the most recent data available is from 2010, we looked at the 3-year change from 2007 (the year many agree the recession began) through 2010 (as the recession began to wane). This provides a measure of an MSAs overall resiliency in productivity during the recession. The top performers include many Midwest cities that had nowhere to go but up and are now creating jobs and attracting business as U.S. manufacturing comes back shore; energy cities that continue to grow as U.S. energy consumption and extraction shift domestically ; and some coastal cities with strong creative classes and high-tech activity.


Indicators:

  • Local area unemployment rate 3-year change rank (February 2012-February 2009)

  • Average hourly earnings 3-year rate change rank (February 2012-February 2009)

  • Per capita real GDP 3-year rate change rank (2010-2007)

  • Manufacturing/goods-producing employment 3-year net change as % of population2 rank (February 2012-February 2009)

  • Employment growth net 3-year change rank (February 2012-February 2009)

  • Employment growth net 3-year change as percentage of population2 rank (February 2012-February 2009)


1 Work force total is provided for each year by the same 2007-2010 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.



 
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