In this article I will summarize Hickory's lack of growth and look at MSA's that have drastically improved their economic outlook since 2002. The indices for The Best Performing Cities on the Milken Institute's website go back to then, although there appears to be no data for the year 2006.
What I am looking at are the big gainers from the last two years of data (2007 & 2008) according to position of rank and I am going all the way back to 2002 to see these cities progress over time. Below is the list of the cities that improved the most. To the far right you will see their statistical improvement from their worst ranking compared to 2008 and the year of their worst ranking. (Click on the picture to enlarge it):
Looking at the top ten cities that have improved the most over this time, we see in order Tie -1) Wichita, KS Tie-1)Peoria, IL 3)El Paso, TX 4) Asheville, NC 5)Tulsa, OK tie-6)Houston, TX tie-6)Beaumont, TX Tie-8) Seattle, WA Tie-8) Greenville, SC Tie-10) Shreveport, LA Tie-10) Lafayette, LA. Below I will try to summarize the cities above and what caused them to see improvement.
1-84) Wichita, KS MSA - Wichita Economy - 596,452 +4.43% Unemp. 8.3%
Wichita saw the greatest improvement over the last couple of years. The city fell from the top of the third quartile in 2002, all the way down to one of the ten worst economies in the U.S. two years later, before rebounding to the top quartile by 2008.Wichita’s labor market was harder hit by the 2001 recession than the national labor market. Wichita’s initial recovery following the 2001 recession was also decidedly sluggish. However, in most quarters since fourth quarter 2005 Wichita’s labor market has been substantially outperforming the nation.
Manufacturing accounted for 21.6 percent of all jobs in the Wichita MSA during 2007. About 87 percent of manufacturing jobs are in the durable goods sub-sector and dominated by jobs in aviation manufacturing. About 13 percent of manufacturing jobs are in the non-durable goods sub-sector, dominated by jobs in food processing.
Cessna and Hawker Beechcraft are based in Wichita, along with Learjet and Spirit AeroSystems, and both Airbus and Boeing maintain a work force in Wichita. Prior to its dissolution Air Midwest, a regional airline, was headquartered in Wichita.
1 - 133) Peoria, IL MSA - Pop. 371,206 Pop. Growth +1.18% Unemp. 8.9%
According to Milken - In the case of Peoria, whose ranking rose from 168th to 68th, industrial machinery manufacturing has been given a huge lift, thanks to Caterpillar Inc., generating valuable indirect impacts.
Peoria is a an MSA that we have already looked at. It is pretty much the same size as the Hickory-Lenoir-Morganton MSA. The numbers show that Peoria's economy was in the doldrums at the beginning of the millenium, but has seen a big upswing the past two years.
Peoria shows smart steering can buck the economic tide - This article. Peoria relies heavily Caterpillar, which is headquartered there. Other companies in Peoria - AmerenCILCO, Archer Daniels Midland, Bergner's, Carson Pirie Scott & Co. Caterpillar Inc. (world headquarters), CEFCU — Credit union, Clifton Gunderson LLP (national headquarters) Komatsu Mining Systems, Maui Jim (world headquarters) , National Center for Agricultural Utilization Research — largest USDA research facility, RLI Corp. (world headquarters).
3 - 68) El Paso, TX MSA Pop. 734,669 Pop. Growth 8.10% Unemp 8.3%
According to Milken - The most improved metro, El Paso, Texas, climbed an impressive eighty-five spots to place 37th overall. El Paso saw a boost in economic activity due to a major expansion of the U.S. Army base at Fort Bliss under the Pentagon’s Base Realignment and Closure (BRAC) program. Nearly 21,000 soldiers are expected to transfer from other bases, with more than 7,000 having already arrived so far.
El Paso is the Operational Headquarters of Helen of Troy Limited, a NASDAQ listed company that manufactures personal health care products under many labels such as OXO, Dr. Scholls, Vidal Sassoon, Sunbeam, among others. Also headquartered in El Paso is Western Refining, listed on the New York Stock Exchange. More than 70 Fortune 500 companies have offices in El Paso, including The Hoover Company, Eureka, Boeing, and Delphi (auto parts).
El Paso is an important entry point to the U.S. from Mexico. Once a major copper refining area, chief manufacturing industries in El Paso now include food production, clothing, construction materials, electronic and medical equipment, and plastics. Cotton, fruit, vegetables, livestock, and pecans are produced in the area. With El Paso's attractive climate and natural beauty, tourism has become a booming industry as well as trade with neighboring Ciudad Juárez.
The federal government has a strong presence in El Paso to manage its status and unique issues as a border region. The Immigration and Naturalization Service (INS), the Drug Enforcement Agency (DEA), and the Customs and Border Protection Agency (CBP) all have agency operations in El Paso to regulate traffic and goods through ports of entry from Mexico. Including these agencies, government job growth in the area is expected to rise to 64,390 jobs by 2007.
Call center operations make up 7 of the top 10 business employers in El Paso. With no signs of growth slowing in this industry, in 2005 the 14 largest call centers in El Paso employed more than 10,000 people. The largest of these in terms of employees are EchoStar, MCI/GC Services, and West Telemarketing.
Article from UTEP about El Paso's economy moving forward.
4- 122) Asheville, NC Milken rank - 46 Pop. 404,320 Unemp = 9.2%
Nice presentation from the Asheville Chamber of Commerce abour Asheville's Economic Future
Asheville has a tourism based economy. Asheville's largest employers - Ingles Markets, Mission Health System, City of Asheville, The Biltmore Company, Buncombe County Government, The Grove Park Inn Resort & Spa, VA Medical Center, BorgWarner, CarePartners, Eaton Corporation
From an Economic Conference July 15, 2009 - Asheville Economy Sees Seismic Shift - Asheville's economy has been buoyed by growth in the health-care, manufacturing, construction, business services and leisure-and-tourism sectors, said Tveidt. Over the past year, however, the Asheville area's economy lost 8,100 jobs, mostly in the manufacturing and business services sectors.
In Western NC, jobs in the green economy are taking root in Clean Energy Business Incubator at A-B Tech's Enka campus. The incubator houses 41 startup companies, which saw a total of $4 million in revenues in 2007, along with $2 million in investment, creating 51 full-time jobs with an average annual wage of $32,000. A $666,050 appropriation for A-B Tech's green-collar job training made it into the most recent spending bill approved by Congress. A $354,000 grant through the U.S. Department of Energy last year helped to create the incubator.
5 - 53) Tulsa, OK MSA Pop. 916,079 Pop. Growth +6.58% Unemp. 6.6%
According to Milken - Tulsa, which rose from 180th to 98th, has experienced more broad-based economic growth and been affected less by the weakened housing market.
Tulsa Economic Outlook from the Tulsa Chamber of Commerce - (Tulsa’s major industries are aerospace, including aerospace manufacturing and air transportation; health care; telecommunications; petroleum and natural gas; and architectural and structural metals manufacturing. Tulsa’s infrastructure for business includes the Port of Catoosa, an inland port that makes bulk shipping to and from coastal ports accessible and economical, and two central networks for broadband interconnect.
Forbes Magazine in 2007 ranked Tulsa as the sixth best city for jobs among the 100 largest metropolitan areas in the country. In 2008, as growth has slowed nationwide, Tulsa has fared better than the nation, being ranked also by Forbes in 2008 as the fifth best metro area of the 200 largest in the country to weather the recession.
During a national recession from 2001 to 2003, the city lost 28,000 jobs. In response, a development initiative, Vision 2025, promised to incite economic growth and recreate lost jobs. Projects spurred by the initiative promised urban revitalization, infrastructure improvement, tourism development, riverfront retail development, and further diversification of the economy. As of 2007, employment levels have surpassed pre-recession heights and the city is in a significant economic development and investment surge.
6 - 6) Houston-Sugar Land-Baytown, TX MSA Pop. 5,728,143 Pop. Growth +21.48% Unemp. 6.9%
The indicators for one-year job and wage growth also showed robust gains, rising 3.0 and 4.0 percentage points faster, respectively, than the national averages. Opportunities stemming from the energy industry, specifically with respect to oil exploration in the Gulf, have been a key engine for growth. Industries supporting oil exploration have also been performing well. Heavy and civil engineering construction recorded an increase of 5,700 jobs, while specialty trade contractors added another 7,800 jobs in the one-year indicator we examined (2006–2007). Support activities for mining also contributed 3,700 jobs. In terms of high-tech, machinery manufacturing grew 5.0 percent between 2006 and 2007, generating 3,800 high-paying jobs. The presence of key players in the region (namely Exxon-Mobil, Shell, Chevron, and BP) will help sustain the industry’s growth.
6 - 131) Beaumont-Port Arthur, TX MSA Pop. 376,241 Pop. Growth -2.30% Unemp. 9.1%
According to Milken - Benefiting from the Energy Boom and Experienced Refinery expansion.
In 2005 and 2008, Beaumont and surrounding areas suffered extensive damage from Hurricane Rita and Hurricane Ike. A mandatory evacuation was imposed upon its residents for about two weeks.
After decades of stagnation and neglect in the area economy, Port Arthur is in the early stages of an economic boom. Several large projects involving the energy infrastructure are underway or proposed, the two largest being the Golden Pass and Sabine Pass LNG terminals. These separate projects under construction in neighboring Sabine Pass have brought cumulative initial investments of $2 billion, and will employ thousands at peak construction.
Home to a large chunk of United States refining capacity, Port Arthur is now seeing renewed investment in several key installations. Motiva Enterprises is undertaking a major addition to its western Port Arthur refinery, expanding capacity to 600,000 barrels per day. This $10.0 billion project is the largest US refinery expansion to occur in 30 years. Premcor Refining (Now Valero) recently completed a $775 million expansion of its petrochemical plant, and BASF/Fina commenced operations of a new $1.75 billion gasification and cogeneration unit on premises of its current installation, which had just completed its own $1 billion upgrade.
Long past its heyday in the early 1900s, successive waves of economic recession have delivered a nearly vacant, boarded up, and sometimes dangerous central business district. The Hotel Sabine, the tallest building in Port Arthur, was abandoned and purchased by the city. An attempt to sell the building failed in 2005, with no interested buyers. Hurricane Rita struck a direct hit on the Proctor Street Seawall, and damaged many downtown businesses and homes. As economic activity picks up in the region, calls for downtown revitalization have been advanced. The true center of commercial activity has gravitated towards the junction of US 69 and Texas 365, with larger white-collar businesses moving to downtown Beaumont. As of 2008, the last downtown banking establishment, Capital One will relocate to Texas 365, which coincides with the closing of the last pharmacy, Walgreens, and the last grocery store, Lucky 7. Several municipal and county offices have moved in to fill the void.
8- 15) Seattle-Tacoma-Bellevue, WA MSA Pop. 3,344,813 Pop. Growth +9.89% Unemp. 8.8%
According to Milken - Jumped an impressive sixty spots to claim 17th place in this year’s index. The indicator for recent job momentum (comparing March 2007 with March 2008) showed a healthy 2.0 percent employment growth. Transportation equipment manufacturing, which encompasses the aerospace sector, was responsible for generating 5,600 of the jobs measured in our indicator for one-year growth between 2006 and 2007. In the same period, professional R&D services added another 6,200 jobs. Most of the growth can be attributed to the vast presence of Boeing and Microsoft (and the secondary impacts of these two behemoths throughout the region). Increased global demand for more fuel-efficient commercial aircraft has sweetened Boeing’s outlook. The metro’s high-tech sector produces 1.3 times the national average for output. In addition, this sector depends on highly skilled labor, resulting in above-average wages—so it is no surprise that the indicator for one-year growth in wages and salaries was 3.2 percentage points above the national average.
Seattle had problems after the Dot.com bust due to the technical industries that make up it economy. The city also was hurt when Boeing moved its headquarters to Chicago in September 2001. Seattle never fell below the middle of the third quartile (#127). Great Article about Seattle Economic Trends. A few bits from the article above: Seattle is the economic and cultural capital of the northwestern United States. The growth of the Pacific Northwest helped propel Seattle to its current stature, and the economic expansion of the Pacific Rim is likely to sustain Seattle's growth well into the future. Seattle's residential and business districts have not experienced the blight and decay found in many other big cities around the United States.
Seattle built its prosperity by taking advantage of its strategic location. The city is situated on an excellent deep-water harbor in the center of the Puget Sound basin. This location gave Seattle an advantage in the competition for regional and international trade. Seattle serves as the gateway to both the Pacific Northwest and Alaska. Trade with Asia has grown considerably in importance over the past 20 years, a trend that is expected to continue well into the future. Seattle is situated at the junction of two Interstate highways: 5 and 90. In 1996, voters approved a $3.9 billion regional mass-transit system to serve King, Snohomish, and Pierce counties.
High technology activities are expanding their role in Seattle's economy. The area has developed into a leading center of software, telecommunications, biotechnology, and medical-technology industries.
8 - 82) Greenville-Mauldin-Easley, SC MSA Pop. 613,828 Pop. Growth +9.63% Unemp. 11%
Greenville's economy was formerly based largely on textile manufacturing, and the city was once known as "The Textile Capital of the World." In the last few decades, low wages and favorable tax benefits have lured foreign companies to invest heavily in the area. The city is the North American headquarters for Michelin and sole manufacturing location for BMW in The Americas. Recently, the International Center for Automotive Research has been created
When the former Donaldson Air Force Base closed, the land became the Donaldson Center Industrial Air Park, and is home to a Lockheed Martin Aircraft and Logistics Center, as well as 3M and Honeywell. Also, General Electric company has a gas turbine and wind energy manufacturing operation here.
The Thomas Creek Brewery was founded on Piedmont Hwy in 1998. The company produces a range of beers, including Mobius, a lager containing taurine, ginseng, caffeine, and thiamine
10 - 127) Shreveport-Bossier City, LA MSA Pop. 387,583 Pop. Growth +3.09% Unemp. 6.8%
Shreveport is home to Shreveport Operations A General Motors plant that is slated to close before or during the year 2012. The plant currently produces the Hummer H3, Hummer H3T, Chevrolet Colorado,GMC Canyon, and the Isuzu i-Series
Today the city has largely transitioned to a service economy. In particular, the area has seen a rapid growth in the gaming industry, hosting various riverboat gambling casinos, and was second only to New Orleans in Louisiana tourism before Hurricane Katrina. Nearby Bossier City is home to one of the three horse racetracks in the state, Harrah's Louisiana Downs. Casinos in Shreveport-Bossier include Sam's Town Casino, Eldorado Casino, Horseshoe Casino, Boomtown Casino, and Diamond Jacks Casino (formerly Isle of Capri). The Shreveport-Bossier Convention & Tourist Bureau is the official tourism information agency for the region. The bureau maintains a comprehensive database of restaurants, accommodations, attractions and events. In May 2005, the Louisiana Boardwalk, a 550,000 square foot (51,000 m²) shopping and entertainment complex, opened across the Red River in Bossier City, featuring outlet shopping, several restaurants, a 14-screen movie theater, a bowling complex, and a Bass Pro Shops.
A new 350,000-square-foot (33,000 m2) convention center was recently completed in downtown Shreveport. It includes an 800-space parking garage. An adjoining 12-story Hilton Hotel opened in early June 2007. The city's direct construction and ownership of the Hilton Hotel has been a controversial issue as to the proper use of public funds. The site is managed by Hilton Hotels. The Shreveport Convention Center is managed by SMG.
Shreveport is also a major medical center of the region and state. The Louisiana State University Health Sciences Center Shreveport operates at expanded facilities once used by the former Confederate Memorial Medical Center. Major hospitals include Christus Schumpert, Willis Knighton, and Shriners Hospital for Children.
As of November 2008, the recent excitement about the Haynesville Shale has been a boon to Shreveport and the surrounding areas. Many new jobs in the natural gas industry are expected to be created over the next few years and local residents are enjoying large bonuses for signing mineral rights leases up to $25,000 per acre. However, the recent economic turndown has resulted in a lower market price for natural gas and slower-than-expected drilling activity. The city itself stands to profit by leasing the mineral rights on public lands in the near future as neighboring municipalities have already done.
Tax incentives offered by the state government have given Louisiana the third largest film industry in the country, behind California and New York, and lead to its nickname of "Hollywood South." Shreveport has seen a number of films made in the city. Facilities include sound stages, the State Fair of Louisiana Fairgrounds Complex, and the Louisiana Wave Studio, a computer-controlled outdoor wave pool.
10 - 168) Lafayette, LA MSA Pop. 256,494 Pop. Growth +7.28% Unemp. 8.8%
According to Milken - The biggest gainer in last year’s index, Lafayette, Louisiana, improved its position by another ten spots to claim 14th place this year. Last year’s dramatic climb was largely attributable to the population influx of hurricane evacuees. This sharp growth in population consequently led to increased demand in various service-driven industries. With the current housing crisis and slowdown in related sectors of the economy, growth in the metro has begun to subside. Interestingly, a shortage in health-care and education services has led to a dramatic increase in wages and salaries in those industries.27 Between 2005 and 2006, overall wages and salaries in the metro experienced the fastest increase in the nation, growing 8.0 percentage points above the U.S. average.
Energy exploration in the nearby Gulf of Mexico will continue to support local manufacturing and mining industries, helping to mitigate some losses in other sectors. Machinery and fabricated metal product manufacturing added more than 600 jobs in the last year, while support for mining generated an additional 1,000 workers. These sectors have contributed to overall job growth of 2.8 percent in the twelve months ending with March 2008.
Lafayette serves as the retail and shopping hub of the Acadiana area, serving an eight parish area. The seat of this retail is the Mall of Acadiana. The mall features department stores Macy's, Dillards, JC Penney, and Sears. It also includes over 100 specialty stores, such as Express, Abercrombie & Fitch, American Eagle Outfitters, Talbots, Chico's, Nine West, and Coldwater Creek. Other retailers/stores that have recently located in Lafayette include Kohl's, Incredible Pizza Co., and Plato's Closet. Academy Sports and Outdoors recently built a new building for its Lafayette location to become the largest store in the Academy chain.
The Hound can see that these cities have a lot in common. The saying goes Luck (or Good fortune) comes from Good Preparation meeting Opportunity. These cities formed groups to assess what their problems were and I believe Hickory has done that with the Future Economy Council and Small Business Task Force, then most of them built centers for technology and/or they naturally occurred, and then they transitioned their economies to Energy, Technology, Modern Manufacturing, Centrally focused Retail Commerce, and/or Entertainment.
If one looks at the numbers, then they can see that some of these cities have been as low as we are in the rankings, but they have all made significant improvements to their economies over that period and some did it in just a couple of years. Only one of these cities has a double-digit unemployment rate (Greenville, SC). What they have in common is focus. Once they saw what their needs were, they set goals to solve them, and they vigorously attacked those goals with energy and focus.
Hickory started out ranked #167, fell to #187 in 2003, and then to #197 the following year. We have bounced around in the bottom 5% of the ranking since that time. We must take this situation seriously. Facts show that others have improved, there is no reason we can't also recover to prosperity.
Wichita, Kansas started out the survey ranked #115 by the Milken Institute, in 2002, but quickly fell to #192 only two years later. In 2008, they were the biggest gainer moving all the way up to #47. Peoria languished along the bottom of the statistics, between #180 and #190, until the last few years. Now they have climbed to the top quartile of the statistics (#43). Other cities, such as, Beaumont, Texas and Shreveport, Louisiana have also made great strides.
What is and has been troubling to me is the way that our city has languished at the very bottom of this statistical analysis since the beginning of the decade. If you think that Milken's statistical review is off, then look at a second source. Forbes magazine ranks us as #130 out of the largest 150 MSAs, as far as "the Best places to do Business." The powers that be around here want to latch on to that #5 rank in cost of doing business, but that is only achieved by the depressed labor market here and the necessity of local citizens to adapt down and be willing to accept lower wages. That is not a good thing to achieve when it comes to the long term prosperity and viability of this community. My question is, when is it going to be Hickory's time for recovery?
We can see the path to recovery and prosperity by looking at what these other MSAs have done. Sure there are going to be obstacles and pitfalls along the way to creating positive economic momentum, but it is more than apparent that we have installed roadblocks to our progress. I don't think this happened on purpose. I think it happened, because local leaders have been in denial about how far we have fallen. In moving forward, it doesn't take a genius to understand what others have done to turn their situations around. The keys to moving forward are Energy, Technology including Biotech, Entertainment, International Trade, and Modernizing the Area.
We must find our niche in the processes that I have outlined above. I guess the optimist would look at this and exclaim, "Well, we don't have much further to fall." That is true. The real problem is that we are becoming irrelevant. Outside enterprises look at us and are starting to assume that we are always going to be towards the bottom of these rankings; that we have accepted our fate. The way city leaders look at the south side of Hickory is the way we are looked at by the nation. I challenge the decision makers of Hickory. What are you going to do to change this perception?!?
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