The competitive effect: 10 metros with high post-recession growth

By 

Competitive effect

By Matt Ferguson, CEO of CareerBuilder and co-author of “The Talent Equation”

Economic experts declared June 2009 as the start of the U.S. recovery from the Great Recession. While that assertion was statistically true, it hasn’t necessarily been felt in all corners of the job market in the years since. The growth rate in local economies throughout the U.S. didn’t always reflect the economy at large. New research from CareerBuilder and Economic Modeling Specialists explains why some metropolitan areas have been thriving more than others since the start of the recovery.

Consider that total U.S. employment grew 4 percent from 2010 to 2013. You might assume that same growth rate occurred consistently throughout the country, but that’s not exactly what happened. For example, had Houston grown 4 percent over that period, 142,378 jobs would have been added. Instead, it added 250,607 new jobs, significantly outpacing national growth—an unexpected addition of 108,229 jobs, also known as the competitive effect.

CareerBuilder and EMSI looked at the total job growth across industries for the 50 most populous U.S. metros between 2010 and 2013. Each metro’s job growth was compared to what would have been expected during that same period based on national growth trends. The difference between the two measurements is called the competitive effect. In the case of Houston, this competitive effect—as seen in the additional 108,229 jobs—signals a unique driver in its regional economy.

Top 10 metros
Of the metros that experienced the largest post-recession growth, Houston exceeded expectations the most in terms of the raw number of jobs added. With 6 percent, Austin experienced the most growth in terms of percentage of total jobs gained due to a metro’s competitive effect.

Metropolitan Statistical Area (MSA) Employment from 2010-2013

MSA
Total employment in 2013
No. of jobs actually added
No. of jobs expected to be added *
No. of jobs added beyond expected growth  (competitive effect)
Percentage of total jobs due to competitive effect
1. Houston, TX
3,030,835
250,607
142,378
108,229
3.6%
2. Dallas, TX
3,370,536
221,161
130,742
90,419
2.7%
3. San Francisco, CA
2,336,223
165,768
80,549
85,219
3.6%
4. Los Angeles, CA
6,282,545
283,664
207,319
76,345
1.2%
5. Austin, TX
929,439
84,774
29,152
55,622
6.0%
6. Phoenix, AZ
1,956,524
124,501
70,263
54,238
2.8%
7. Miami, FL
2,540,304
134,588
83,934
50,654
2.0%
8. San Jose, CA
1,040,777
90,559
46,767
43,792
4.2%
9. Detroit, MI
1,932,779
125,330
89,148
36,182
1.9%
10. Riverside, CA
1,432,813
76,646
42,412
34,234
2.4%
* Based on national job growth

Metros by industry
Although you might expect to see some of the nation’s most high-profile metros on the top 10 list, their respective competitive effects were negative—despite adding more than 100,000 jobs each. New York experienced job loss due to downward national trends in finance, manufacturing and health care. Chicago didn’t see the expected manufacturing growth, and it lost a critical amount of government, hospital and insurance carrier positions. Meanwhile, Philadelphia suffered from losses in education, commercial banking and manufacturing jobs.
Many of these metros are heavily dominated by specialized technical industries with well-established local supply chains. The overall job growth in these markets is not primarily a product of national economic trends, but rather distinct factors in the local economy such as energy resources in Houston, technology hubs in Silicon Valley and Austin, or the motion picture industry in Los Angeles. Thirty-two of the top 50 metros have outperformed national employment growth post-recession which, in turn, can have a positive influence on other geographies.
Each of the top 10 metros for competitive growth has a core set of industries that help drive its local economy:

1. Houston: Oil and gas extraction; support activities for mining, architectural and engineering services; and education.

2. Dallas: Commercial banking; computer systems design; education; and general medical and surgical hospitals.

3. San Francisco: Computer systems design; Internet publishing and broadcasting and Web search portals; and management of companies.

4. Los Angeles: Motion picture and video industries; payroll services and accounting; agents and managers for artists, athletes, entertainers, etc.; surgical and medical instrument manufacturing; and guided missile and space vehicle manufacturing.

5. Austin: Data processing and hosting; computer system design, management, scientific and technical consulting services; and semiconductor manufacturing.

6. Phoenix: Private colleges, universities and professional schools; commercial banking; professional employer organizations; and semiconductor manufacturing.

7. Miami: Legal services; business support services; freight transportation; payroll services; and activities related to real estate.

8. San Jose: Computer system design; computer manufacturing; semiconductor manufacturing; and software publishing.

9. Detroit: Motor vehicle manufacturing; engineering services; and temporary help services.


10. Riverside: General warehousing and storage; offices of physicians; and heavy and civil engineering construction.

Follow by Email

Followers