#678 – Where Small Town America is Thriving – Part TwoMar 20, 2018
This week, we are continuing a series from Joel Kotkin’s recent report, Where Small Town America is Thriving. Last week we shared his top small energy cities. We will continue with Part Two this week, which reveals Mr. Kotkin’s top picks in manufacturing cities and business and professional service hubs.
Where Small Town America is Thriving – Part Two
Over the last few decades, manufacturing has been shifting from densely population regions of the country to more rural areas. A recent surge in manufacturing investment — such as Foxconn’s planned $10 billion electronics plant to open in 2020 in Mount Pleasant, Wisc., a city of 26,000 – has benefited some smaller cities and towns, where land is inexpensive, energy often cheap and the labor force is seeking higher paid, blue-collar work. Since 2010, the country has added a million industrial jobs, roughly half of what was lost in the recession.
Pullman, Wash., our No. 1 manufacturing small city, has seen industrial growth replace farming as the primary driver of its economy. The area, which abuts the Idaho border and is home to Washington State University, has 60% more industrial jobs per capita than the national average and since 2007 has more than doubled its industrial employment to nearly 2,800. The manufacturing job boom in Pullman has been fueled primarily by Schweitzer Engineering, a maker of electrical equipment.
One striking thing about the small manufacturing hot spots is their diversity. Some have benefited from the domestic energy boom, which has contributed to strong industrial growth, like the Texas cities of Port Lavaca, Andrews and Palestine. No. 3 La Grange, Ga., where manufacturing employment has grown nearly 75% since 2007 to 11,700 jobs, is a carpet manufacturing hub and has attracted factories from Duracell, Caterpillar, and Korean companies including Kia Motors.
For No. 5 McPherson, Kansas, its 37% expansion in industrial jobs over the past decade has been driven by plastics, energy and equipment manufacturing, aided by low energy prices (it’s located in the nation’s “wind tunnel,” ideal for wind energy generation). No. 4 Columbus, Ind., where Cummins Engines is based, has a per capita share of employment in manufacturing four and a half times the national average and has seen its industrial workforce grow by 22% over the decade, making it something of a model for industrial revival in small towns.
Business and Professional Service Hubs
Ideally the information age should allow smaller cities to compete for jobs in the largest sector of high-wage employment: business and professional services. Growth in high end jobs is very diverse and its leaders widely scattered. Our No. 1 area is Battle Creek, Mich., where the largest employers are Kellogg’s and several auto-oriented manufacturers. Business service employment is up 133% since 2007 to 2,900 jobs in 2017, well above the national average growth of 15%, with particular growth in marketing and computer systems design.
Anchored by manufacturers in textiles, paper products and HVAC equipment, No. 2 Bennettsville, S.C., has grown its business services sector from next to nothing a decade ago after strong expansion of engineering services.
The highest concentration of professional and scientific service jobs can be found in Los Alamos, N.M., where professional service jobs are, on a per capita basis some 9.8 times above the average. This may be something of a special case, as Los Alamos is home to a huge federal research center which seems to be spinning out a lot of technically oriented service jobs.
Next week we will wrap up this series from Joel Kotkin’s report that reveals the top cities emerging as STEM centers.