These efforts yielded revealing lists identifying the top largest metros; the top leading metros with small, mid-size, or large population; and the top metros for economic strength, prime workforces, and with the best year-over-year growth and five-year economic growth success. This number-crunching exercise created an extremely positive scorecard for the U.S. economy overall.
Over the past few years the U.S. has seen a significant amount of business investment in equipment and plants, she notes, partly due to new tax cuts and a notable reduction in regulations holding back growth. “As a result, regions with relatively large manufacturing sectors benefitted greatly, and we see that in some of the rankings,” says Chmura. And although investments slowed in the beginning of the second half of 2019 due to uncertainty related to trade wars, particularly with China, “we still expect to see real GDP of 2 percent in 2020. That’s due to the consumer sector remaining strong; that’s important since consumers comprise about 70 percent of GDP growth,” Chmura explains.
More good news: As of October 2019, the nation’s unemployment rate was 3.6 percent, and wages grew 4.89 percent year over year (from October 2018 to October 2019). If these kinds of positive trends continue and the consumer sector remains strong, Chmura predicts America will continue to grow and prosper in 2020. “And if we see an end to the uncertainty about the trade wars soon, we could see even higher growth than what economists are forecasting,” she notes.
Broadly speaking, 14 of the top 50 leading metro locations reflecting the nation’s continuous economic expansion are in the Pacific region. “Looking at the first five, they’re all high-tech hubs with a relatively young, highly educated workforce, typically well compensated,” says Chmura. “Unfortunately, since home prices are so high in those areas, they’re often unaffordable to the young workforce they’re attracting. But that simply helps nearby metros.” For example, Portland benefits from housing overflow from California and Seattle.
The second-most-represented region among the leading metro locations is the South Atlantic, with 11 metros on the list. This is due mainly to its manufacturing-intensive activity, says Chmura. For example, the Charleston region “has benefitted greatly from Boeing’s expansion in the past decade, and the Volvo plant that opened in June 2018 will continue to expand over at least the next three years.” In the near-term, Chmura expects to see population and employment continuing to shift to the Pacific and South Atlantic.
The Mountain and the Midwest regions each include seven leading metro locations, while the Mid-Atlantic region has five, the South has four, and the New England region, only two.
Four of the top 10 metros tagged as prime workforce locales are in California: San-Francisco-Redwood City-S. San Francisco, San Jose-Sunnyvale-Santa Clara, Napa, and Oakland-Hayward-Berkeley.
A major reason setting San Francisco apart from other cities in the state is its sub-region of Silicon Valley (3.1 million people), supporting a whopping 1.6 million jobs averaging $139,775 in annual pay.
In November 2019, a California government agency announced the state’s unemployment rate fell to a new record low of 3.9 percent in October, and that employers had added 23,600 nonfarm payroll jobs. Those new positions concretely contributed to the current country-wide job expansion. Specifically, since the expansion began in February 2010 in California, the state gained 3,377,900 jobs which made up over 15 percent of America’s 22,230,000 job gain recorded in the same timeframe.
Other particularly strong workforce showings are in locations widely spread across the U.S., such as Ithaca, N.Y.; Seattle-Bellevue-Everett, Wash.; Philadelphia, Pa.; Columbus, Ind.; Orlando-Kissimmee-Sanford, Fla.; and Idaho Falls, Idaho.
In the category of economic strength, the leading two metros identified by Area Development research are cities named Decatur. The one in Alabama took spot #1, while the other in Illinois earned spot #2. Both also were ranked high among small metros and in the top 20 overall.
These cities are followed by Reno, Nev., Spartanburg, S.C., and Gainesville, Ga., in the economic strength category. Reno also attained the #1 ranking for year-over-year growth as well as five-year economic growth and is the #1 leading metro location overall.
The Reno-Sparks metro area (population: over 500,000) is no longer heavily focused on gaming and entertainment. Today, about 65 percent of Reno’s workforce is employed in the trade and services sector, and its total employment rate is more than triple the national average. Corporate citizens now include diverse players in healthcare, technology, and entrepreneurial startup businesses.
A notable regional addition is Elon Musk’s Tesla Gigafactory 1, the world’s highest-volume battery plant, built just outside Reno. Meanwhile New Deantronics is set to open a $40 million, 200-job medical device R&D and manufacturing campus in the Reno-Sparks area in 2020. Not surprisingly, the metro is now enjoying an expansion in distribution and warehousing facilities as well.
Chmura points out that the commonality shared by metros flexing brawny economic strength muscles is their emphasis on attracting, supporting, and retaining manufacturing companies. “Communities that champion their manufacturing sector benefit not only from the success of those firms, but also from the large ripple effect they cause,” she says. “For every one manufacturing job, typically two to three additional jobs are created; that’s a large multiplier for any region of any size.”
Looking at the top 30 metros for economic strength, Chmura sees manufacturing again is behind their excellent rankings. For example, Decatur, Ala., saw employment growth in the food, metals, and chemical manufacturing industries, while Decatur, Ill., has found success with help from its prominent construction machinery manufacturing players. In the last three years alone, Reno added 12,000 jobs in battery manufacturing; Spartanburg, S.C., saw growth in auto-related manufacturing; and Gainesville, Ga., boosted its economy with food and machinery manufacturing.
When it comes to year-over-year economic growth — in addition to Reno and Decatur, Ala., and Decatur, Ill. — other metros posting remarkable year-over-year economic growth stats include Vineland-Bridgeton, N.J. (flush with jobs from temp health agencies and wholesale trade “possibly due to quick delivery operations,” notes Chmura); plus manufacturing-friendly Ogden-Clearfield, Utah.
Not surprisingly, most of the top-ranked metros for five-year economic growth are “fairly dependent upon manufacturing, which has shown fairly good growth in last few years,” says Chmura. “Remember, after the last recession ended in June 2009, we went through a jobless recovery, and it wasn’t until early 2015 that we recovered all the jobs lost in that downturn.”
Midterm (Five-Year) Growth
Will the economy continue to expand? “We do not have a recession in our forecast any time soon,” says Chmura, who sees “more of the same” economic growth in the next year or two. “In early 2019 some analysts were predicting a recession for 2020, but those concerns have now dropped off as the stock market has grown, and short-term interest rates were lowered by the Fed.”
At some point “we’ll see a recession” she predicts, but it’s not expected to happen until 2021 or 2022. “When it does come, many areas with a large manufacturing base will feel the brunt of that recession the most. But as long as businesses continue to grow and add jobs, we’ll only have good news for the future.” 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 Lisa Bastian, Staff Editor.