Measuring a region’s economic performance is the next critical step to a corporate site location analysis. Again, population growth, regional Gross Domestic Product growth, market size and other factors are critical to measuring the economic attractiveness of a market. The population size of a market is an important measure of a region’s overall attractiveness. The larger the population, and the growth of that population, the more attractive that market is from a consumer and workforce standpoint.
Source: US Census Bureau
The federal government has identified 382 Metropolitan Service Areas (MSAs) in the United States. MSAs are a geographical region with a relatively high population density at its core and close economic ties throughout the area. These regions are not legally incorporated as a city or town would be, nor are they legal administrative divisions like counties or separate entities such as states. However, MSAs are worthy of analysis as they are often a basis for regional economic markets. As the chart above illustrates, the population growth rates of MSAs illustrates the relative strength of these regions. From 2010-16, the following MSAs had population growth rates of:
- Detroit grew only .39% but still remains the 14th largest MSA in the United States;
- Cincinnati barely gained population in their MSA and Cleveland actually lost population;
- Columbus grew over 9% and is moving to become the largest MSA in Ohio;
- Indianapolis grew over 7% and still dominates the Indiana marketplace but is facing challenging regional competition; and
- Raleigh is booming with an 18% population growth rate and is by far the fastest growing market in this analysis.
Gross Domestic Product (GDP) is the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production and is equal to the sum of personal consumption expenditures, gross private domestic investment, net exports of goods and services, and government consumption expenditures and gross investment. As an example, Raleigh is a top fifty market from a population standpoint with a Metropolitan Service Area (MSA) ranked 44th largest in the US. Austin is the only top fifty market with population growth higher than Raleigh’s 15% growth rate since 2010. [i] Wake is one of 100 counties in North Carolina. It is part of the Raleigh, NC Metropolitan Statistical Area. Its 2016 population of 1,046,791 ranked 2nd in the state.[ii] Raleigh’s MSA is the 44th largest in the United States as measured by GDP and has a regional GDP of $79,843,000,000 growing from $37,313,000,000 in 2001.[iii] From an economic standpoint, Raleigh’s MSA at 44th is smaller than Cincinnati, Cleveland, Columbus, Pittsburgh, Nashville and Seattle.[iv]
Measuring a region’s GDP growth over time illustrates trends in growth. Comparing the GDP growth overtime illustrates how a region compares from an economic growth standpoint with like competitors. As the chart below illustrates comparing the Raleigh MSA GDP recent growth with competitor communities, the Pittsburgh region has not grown as quickly as competitor regions. From 2001-2016:
- Raleigh’s MSA GDP grew 113%;
- Columbus’ MSA GDP grew 77%;
- Detroit’s MSA GDP grew 81%;
- Indianapolis MSA GDP grew 83%;
- Cincinnati’s MSA GDP grew 84%; and
- Cleveland’s MSA GDP grew 84 %.[v]
Again, much like its population growth, Raleigh is a slightly smaller market than many of its competitors, but its recent economic growth rate is extraordinary. This recent growth rate makes Raleigh an attractive market even though it is currently a relatively small size market.
Personal income includes net earnings by place of residence, dividends, interest, rent, and personal current transfer receipts received by an area’s residents. Personal income is an important measure that illustrates the spending power of consumers in a market. As an example, in 2016, Wake County had a per capita personal income (PCPI) of $54,063.[vi] This PCPI ranked Wake 3rd in the state and was 128 percent of the state average, $42,244, and 110 percent of the national average, $49,246.[vii] The 2016 PCPI reflected an increase of 1.5 percent from 2015.[viii] The 2015-2016 state change was 2.1 percent and the national change was 1.6 percent.[ix] In 2006, the PCPI of Wake was $44,583 and ranked 3rd in the state.[x] The 2006-2016 compound annual growth rate of PCPI was 1.9 percent.[xi] The compound annual growth rate for the state was 2.2 percent and for the nation was 2.6 percent. State personal income grew 0.7 percent on average in the second quarter of 2017, after increasing 1.4 percent in the first quarter, according to the Bureau of Economic Analysis. Personal income grew in 2016 in 2,285 counties, fell in 795, and was unchanged in 33, according to the U.S. Bureau of Economic Analysis. On average, personal income rose 2.5 percent in 2016 in the metropolitan portion of the United States and rose 1.0 percent in the nonmetropolitan portion. In 2016, Wake County had a personal income of $56,592,270. This personal income ranked 2nd in the state and accounted for 13.2 percent of the state total. In 2006, the personal income of Wake was $34,954,963 and ranked 2nd in the state.
Wake County Personal Income Growth Rate Comparison
| Area | 2015-2016 percent change | 2006-2016 Compound Annual Growth Rate |
| Wake County | 3.9% | 4.9% |
| North Carolina | 3.2% | 3.5% |
| United States | 2.3% | 3.4% |
Workforce Analysis
The availability of a skilled and affordable workforce is a critical piece of any corporate site location decision. A workforce analysis tied to a corporate site location analysis examines the occupational trends of a region to get a long-term perspective on the economy, reviews the skill level of its workers often measured by college graduation rates for the state and the regions within the state and finally measures the skills gap a region has targeting specific occupations in a region.
With the retirement of the Baby Boom generation and the invasion of the Millennial generation, no issue for a region matters more than the availability of a skilled workforce.
Ohio v. North Carolina Employment by Industry Trends 1990 v. 2017
| Industry | 1990 North Carolina | 2017 North Carolina | 1990 Ohio | 2017 Ohio |
| Goods-producing | 1,012,830 | 706,728 | 1,307,783 | 930,920 |
| Natural resources and mining | 25,827 | 30,917 | 30,951 | 27,497 |
| Construction | 166,746 | 208,547 | 195,190 | 216,958 |
| Manufacturing | 820,256 | 467,264 | 1,081,643 | 686,465 |
| Service-providing | 1,589,367 | 2,926,330 | 2,790,434 | 3,715,835 |
| Trade, transportation, and utilities | 626,155 | 825,702 | 979,023 | 1,018,107 |
| Information | 57,615 | 78,814 | 104,735 | 71,562 |
| Financial activities | 134,904 | 226,622 | 258,696 | 288,503 |
| Professional and business services | 233,311 | 615,901 | 372,577 | 724,577 |
| Education and health services | 225,739 | 578,456 | 519,101 | 897,275 |
| Leisure and hospitality | 233,901 | 493,470 | 410,579 | 560,090 |
| Other services | 77,170 | 107,364 | 145,445 | 155,241 |
Comparing industry job growth or loss in Ohio compared to North Carolina illustrates why North Carolina is succeeding. While the North Carolina economy continues to transition away from manufacturing jobs and grow in the service, financial activities, professional services, education and health care, the above table comparing the number of jobs in Ohio and North Carolina in 1990 versus 2017 by industry illustrates North Carolina’s success in the tech sector with an increase of over 20,000 jobs in the high-wage information sector. Ohio on the other hand has lost over 30,000 jobs in the information sector over this same timeframe.
As the economy transitions from low-skilled manufacturing work to high-skilled, technology oriented jobs, the availability of college graduates to fill skilled positions is critical. The table below illustrates Ohio is slightly behind most regional competitors and even further behind competitors like North Carolina when it comes to the availability of college graduates to fill high-wage jobs.
All Ohio regions are not on the same equal footing when it comes to educational attainment in the state and this clearly impacts their region’s ability to retain and attract high-skilled jobs in a range of fields.
As the table above illustrates, Ohio’s urban and suburban centers have a higher percentage of college degree attainment while the rural and a handful of urban communities losing population have a lower college degree attainment rate. These urban and suburban centers are clearly strong targets to high-skilled jobs in the advanced services, manufacturing, and technology sectors.
Finally, measure the number of open jobs in relevant occupations is an important measure for companies considering a corporate site location project. All regions face a skills gap in a number of occupations. The chart below looks at the issue from a regional level and illustrates that even a tech center like Raleigh is facing a skills gap when it comes to information technology workers. LinkedIn has 2,374 and Indeed.com has 3,594 open job postings under the category of information technology in the Raleigh market.
[i] U.S. Census Bureau
[ii] Ibid.
[iii] St. Louis Federal Reserve Bank
[iv] Ibid.
[v] U.S. Bureau of Economic Analysis
[vi] Ibid.
[vii] Ibid.
[viii] Ibid.
[ix] Ibid.
[x] Ibid.
[xi] Ibid.
