Leading Locations for 2015 Resources
Most community leaders would agree that what is most important for economic sustainability is not a one-time, lucky swing at the plate that brings in a big company, but a holistic strategy of economic development with well-thought-out goals. Community and business leaders then collaborate to make the necessary investments to achieve those goals five, 10, or 15 years down the road.
The benefits of this mindset go far beyond the bottom line. When cities invest in themselves to create a strong workforce and a prosperous, conscientious business community, they create a place with a high quality of life. This leads to in-migration of talented people with multiple skills and talents. Successful companies will attract suppliers and other business investment — possibly even creating clusters or corridors that gain national attention. All these things increase the leverage a community has for attracting new business, as well as its ability to offer compelling incentives to top-level companies — creating a track record of economic success.
Included in the Leading Locations report on AreaDevelopment.com is an interactive table that will allow viewers to sort the rankings of all 373 MSAs included in this year’s study. The report includes an overall ranking that is based on 21 economic indicators. Area Development also created category rankings that are based on sub-groups of indicators from the 21 used for the overall results (refer to the methodology to learn more). Readers can use filters to easily segment MSAs by region, population size, and state, or use the search field to locate specific MSAs. The expanded version of the chart displays how each city ranks in every one of the 21 indicators used in the study.
Area Development’s research desk compiled the statistics for this report. Locations were ranked according to the methodology explained herein. Location profiles/articles researched and written by Mark Crawford, Staff Editor.
Denver-Aurora-Broomfield, Colorado
Population: 2,543,482
Overall Rank: 1
- Knowledge-based industries play above-average role
- Sturdy housing market; prices at a new peak
- Rapidly improving migration and strong population growth
- Highly skilled workforce
- High employment diversity and low volatility
Strengths
- Tourists continue to flock to Denver and boost leisure/hospitality employment more than expected
- Lower oil prices push faster real consumer spending growth, providing a broad-based jolt to the economy
Upside
All three cities have similar diverse economies, including advanced manufacturing and other high-tech industries like aerospace, telecommunications, biotechnology, and clean energy. The Solar Technology Acceleration Center in Aurora is the largest test facility for solar technologies in the U.S. In fact, metropolitan Denver and the Northern Colorado corridor combined rank sixth in the country for clean-energy employment.
Denver is also emerging as a financial services center. WorldRemit, a London-based financial services firm, recently announced it would open a North American headquarters and operations center in Denver. “Denver offers the perfect combination of a highly skilled workforce, supportive local authority, and idyllic location,” says WorldRemit CEO Ismail Ahmed. “The city is gaining a reputation as a go-to destination for the burgeoning financial-tech sector and stealing the thunder of New York and Silicon Valley.”
Houston-Sugar Land-Baytown, Texas
Population: 5,946,800
Overall Rank: 2
- Global leadership in oil and gas technology supports technical and professional service jobs
- Significant trade and export links, owing to location on Texas Gulf Coast
Strengths
- Strong job and income growth boosts single-family construction faster than expected
- Improvement of distribution facilities boosts trade, transportation businesses
Upside
Key industries for job growth in the Houston-Sugar Land-Baytown MSA are energy, education, healthcare, professional and business services, transportation, utilities, construction, mining, and logging. Sugar Land continues to see big investments from a diverse range of industries. In 2014 the city announced projects totaling $89 million in capital investment that will create 2,304 new jobs. Top players in Sugar Land are Minute Maid, United Healthcare, Texas Instruments, Schlumberger, and Fluor Corporation.
Petroleum and chemicals are especially important to the Baytown economy. In 2014 ExxonMobil Chemical Company announced it would build a multibillion-dollar ethane cracker in Baytown to provide ethylene feedstock for downstream chemical processing. It has committed $1 million to the Community College Petrochemical Initiative, a training program offered by nine Houston-area community colleges, to help create its future workforce.
Grand Rapids-Wyoming, Michigan
Population: 774,160
Overall Rank: 3
- Growing biotech and healthcare center
- Many economic development initiatives and pro-business environment
- Diverse manufacturing base, including technologically advanced companies
Strengths
- Population growth exceeds expectations as the booming downtown helps retain more college graduates
- Better than expected life science investment fuels faster income growth; consumer industries benefit
Upside
In October 2014 Forbes.com ranked Grand Rapids-Wyoming fifth-best in the country for regional economic growth on a per capita basis from 2010 through 2013, based on a study by the Bureau of Economic Analysis. At 7.8 percent, Grand Rapids’ per capita gross domestic product (GDP) growth rate (2010–2013) more than doubled the national growth rate of 3.8 percent.
Key industries are advanced manufacturing, life sciences, agribusiness, aerospace and defense, and information technology. With these productive science-based sectors, it is not surprising that Grand Rapids-Wyoming ranks 13 for science and engineering occupations as a percentage of total workforce.
In 2014 Grand Rapids-Wyoming announced 22 projects totaling $315 million capital investment, creating 2,183 jobs. For example, Chinese auto supplier Dicastal North America decided to establish its first U.S. facility in nearby Greenville. The $140 million plant will hire 300 workers over the next four years to manufacture aluminum-alloy wheels. The company explored 35 sites in seven states before making its final decision.
Mid-Size Cities (Population 160,000-600,000)
Greeley, Colorado
Population: 252,825
Overall Rank: 4
- Strong manufacturing base with exposure to relatively noncyclical food manufacturing
- Strong population growth and a large working-age population
Strengths
- Cheaper energy boosts growth in non-oil–related industries more than expected, buoying the economy
Upside
Greeley is also in the heart of Colorado oil country — its second key industry. Food processing, construction, and retail are also on the rise. Major companies are State Farm, Noble Energy, and JB USA — the biggest producer of meat protein in the world. According to statistics cited in the June 2014 “U.S. Metro Economies” by the U.S. Conference of Mayors, Greeley was ranked as one of the leading cities for future economic growth — about 4.8 percent — almost twice that of the U.S.
Investment continues in agriculture and energy. Leprino Foods, a producer of mozzarella cheese, is constructing an 800,000-square-foot plant that will employ 500 people. The company’s milk needs will boost the local dairy herd population by 60,000 animals. When it comes to energy, Weld County has more oil and gas well permits than any other county in Colorado. The wide-open plains around Greeley are ideal for generating wind energy. To keep up with increased demand for wind turbines, local turbine manufacturer Vestas is hiring 400 new workers to expand production at its Windsor facility, just a few miles from Greeley.
Boulder, Colorado
Population: 294,567
Overall Rank: 9
- Several emerging growth industries
- Extremely high educational attainment and above-average per capita income
- Strong house price appreciation and superior consumer credit quality
Strengths
- Construction employment receives stronger than expected lift as homebuilding accelerates and infrastructure is expanded
- Venture capital inflows foster stronger IT job growth, generating outsized job and income gains
Upside
As a result, Boulder is home to one of the most highly educated and entrepreneurial populations in the country. A February 2015 study by NerdWallet showed that Boulder had the highest density of startups among the cities it studied.
According to the PricewaterhouseCoopers/ National Venture Capital Association (NVCA) MoneyTree Report™, over the past five years more than $850 million has been invested in Boulder companies, representing more than one quarter of the total venture capital investment in Colorado firms. And so far that momentum has carried over into 2015 — five of the 23 venture capital deals in Colorado during the first quarter of 2015 involve Boulder companies, totaling $28 million.
Provo-Orem, UT
Population: 526,810
Overall Rank: 15
- Large, dynamic high-tech industry
- Stable employment and research spillovers from Brigham Young University
- Strong population growth and high educational attainment
- Low business costs
Strengths
- Faster than expected household formation leads to stronger housing demand, higher prices, and more construction
- Demand for locally produced flash memory chips strengthens more than expected
- Low costs and high educational attainment attract new industries
Upside
Therefore, it is not surprising that Provo-Orem has an outstanding high-tech reputation. A number of global IT companies, including Novell, WordPerfect, and PowerQuest, originated in Provo-Orem. Provo was listed as the second-best performing city in the U.S. in 2013 by the Milken Institute and was ranked a top city for IT job growth by NewGeography.com in 2014. Skilled scientists and engineers graduate into the MSA’s workforce every year from Brigham Young University and Utah Valley University.
The Associated Press recently ranked Provo-Orem eighth in the nation for venture money invested in tech startups during the first nine months of 2014. However, Provo-Orem scored first for average dollars per deal — $51.3 million, almost three times more than the number-two city (San Francisco) at $18.4 million per deal.
Small Cities (Population < 160,000)
Columbus, IN
Population: 76,794
Overall Rank: 8
- Strong manufacturing base with exposure to global markets
- Stable housing market with low foreclosure activity
- High affordability for residents and businesses
Strengths
- Rising educational attainment attracts business investment
- Sturdy job market induces more residents to relocate to the metro area
- Strong employment growth spurs better than expected in-migration
Upside
The Columbus economy is driven by manufacturing — in fact, nearly 40 percent of the local employment is manufacturing-related. Automotive is the key industry. Cummins, Enkei, PMG, Faurecia, and other automotive-related firms operate in the area, including top tier-1 and tier-2 suppliers. To support other advanced manufacturing industries, the Advanced Manufacturing Center of Excellence, a 43,000-square-foot facility shared by several local universities and colleges, opened in 2012. The center aims to facilitate collaboration between industry and academia to develop training in topics such as materials and heat treatment, mechanical engineering/mechatronics, and robotics.
As a result of this proactive support, manufacturers continue to invest in Columbus. For example, Sunright America, North America’s largest manufacturer of metal fasteners, recently completed a $34.6 million expansion. In another expansion move, Impact Forge Group, a manufacturer of critical safety-forged components for the automotive industry, will spend $7.5 million to expand its 138,000-square-foot Columbus production center.
Midland, TX
Population: 136,872
Overall Rank: 13
- Vast amounts of recoverable oil and natural gas
- High birth rate and strong in-migration
- Low business costs, especially office rents
Strengths
- Downtown redevelopment leads to more non-energy jobs and a more diverse economy
- Population growth surprises to the upside, and consumer-related industries impress
Upside
Midland’s dominant industry is oil and gas, which is experiencing a significant slowdown — Midland lost 300 oil jobs from February to March 2015. However, strong performances by manufacturing, hospitality, and other business services sectors helped offset these losses — from March 2014 to March 2015, Midland added 7,100 new jobs.
Midland continues to diversify its economy with the addition of aerospace. The Midland airport received a spaceport license in September 2014 and is now officially the Midland International Air and Space Port. Tenants include XCOR Aerospace and Orbital Outfitters, a space suit manufacturing company. In October 2014, Orbital Outfitters started construction on its new test, manufacturing, and headquarters facility.
“We couldn’t have gotten here without the support of the Midland community and city leaders,” says Jeff Feige, CEO of Orbital Outfitters. “The city of Midland has welcomed us with open arms, and we just can’t wait to get this facility up and running.”
Odessa, TX
Population: 137,130
Overall Rank: 17
- Vast amounts of recoverable oil and natural gas
- High birthrate and strong in-migration
- Improving quality of workforce
- Superior credit quality
Strengths
- Population growth surprises to the upside, and consumer-related industries impress
- Expansion of wind energy reduces volatility
Upside
Odessa has enjoyed continuous economic growth from 2010 to 2015. Over that five-year time period, the Odessa Economic Index (OEI) has expanded by 67 percent, averaging more than 13 percent per year, resulting in about 23,000 new jobs. Even with the current low oil prices, the March 2015 OEI is still 7.5 percent higher than it was a year ago.
The analysts behind the Odessa Economic Index believe that oil prices will almost certainly recover and again drive the Odessa economy. In the meantime, both consumer activity and outside income remained strong in 2014, especially hotel-motel tax collections. The housing and construction markets are also fairly steady. Other key economic sectors for Odessa are logistics and distribution and manufacturing. The city continues to upgrade and expand its industrial park and invest in workforce training programs. Odessa is also exploring ways to diversify its economy, including bringing in more advanced manufacturing companies, as well as clean-energy projects that include wind, clean coal, and nuclear energy.
The “Strengths” and “Upside” bullet points for each of the nine profiled MSAs was taken from February 2015 Moody’s Analytics U.S. Précis® Metro reports, which offer concise analysis and data on the current and expected economic conditions for all U.S. metropolitan areas. Each three-page report covers an individual metro area and includes a five-year forecast from Moody's Analytics' simultaneous econometric model, which is updated monthly.
Forecasts of key indicators that drive metro area economies include Gross Metro Product (GMP), industry diversity, employment, personal income, population, housing activity, migration flows, and personal bankruptcies. Moody's Analytics' exclusive indicators — including cost of doing business, cost of living, risk-adjusted return, and short- and long-term employment growth — allow for quick and easy comparisons across metro areas.