Best-Performing Cities Biggest Gainers: Sectors on the Upswing
This year the Milken Institute’s Best-Performing Cities index shows that tech is still king, with the Top 10 dominated by technology hubs. So what are the other metros doing differently to drive their growth, and how real has this growth been? This year, a few industries really impacted movement up the list with some outliers. This was clearest among the Top 25 metros that improved their rankings the most—the “biggest gainers.” Construction, real estate, transportation equipment manufacturing and health care are the industries driving the economies making the biggest gains.
The transportation equipment sector had the largest impact on the most improved economies. Employment growth in this sector has averaged 25 percent in these regions over the last five years. Detroit-Warren-Dearborn has seen its share of hard times in the past decade, requiring both state and federal assistance, but the metro has replaced 16,400 jobs across all sectors over the last five years and climbed 44 places on our 2016 index. It has seen a 53 percent increase in transportation equipment manufacturing employment over this five-year period, including 8.7 percent over the last year. The one-year growth of Detroit-Warren-Dearborn is 3.5 percent greater than the average of the sector’s biggest gainers. Though Detroit-Warren-Dearborn by far added the most jobs in this sector both in the last year and in the past five years, Toledo, OH, and Rockford IL, also stand out. Over the five-year period, transportation equipment manufacturing employment in these two metros grew 96 percent and 84 percent, respectively, adding a combined 11,490 jobs.
Construction has gone from bust to boom in the last five years, and the sector had the greatest employment gains in the Midwest and East Coast. This particular sector also yielded employment opportunities in real estate. These two sectors both saw employment growth in the vast majority metros on the biggest gainers list. At the top of the list is Deltona-Daytona Beach-Ormond Beach, FL, where real estate employment increased 6.7 percent in one year and 21 percent over the last five years. The metro also saw strong gains in construction, with 38 percent employment growth over the last five years and a 17.5 percent increase in 2015.
Beyond saving lives, health-care services also added economic life to the biggest gainers. Health care has been a growing sector for a long time, but ambulatory health-care services, hospitals and nursing and residential care facilities have been averaging 7 percent employment growth over the last five years. Collectively, the biggest gainers in this year’s index have seen 183,030 jobs added across these three sectors. These sectors offer stable, higher paying jobs than many other service-sector positions. Hospitals, in particular, offer higher-wage jobs and also bring talent and research into an area. In the last year, 50,010 jobs have been added in these sectors among the most-improved metros, representing 27 percent of the jobs created over the last five years. New York-Jersey City-White Plains, NY-NJ, has added 82,100 jobs in the last five years and almost 20,000 in the past year alone just in the ambulatory health-care services sector.
Source: Moody’s Analytics.
The combination of construction, real estate, transportation equipment manufacturing and health-care have played an important role in this year’s index to help some metros grow. Changing demographics, pent-up demand and favorable macroeconomic conditions have helped these sectors grow these Top 25 largest gainers on this year’s Best-Performing Cities index. We will continue to track whether gains made by these metros are sustained as the Milken Institute continues to look more in-depth at resilience in a series of forthcoming case studies and expands on our previous work on how metros perform over time. (http://www.milkeninstitute.org/publications/view/815)
Source: Milken Institute.