states

9-Year Run: CEOs Rank Texas #1, California #50

Wendell Cox — Sun, 12 May 2013 22:33:40 -0400

Each year, chiefexecutive.net ranks states based upon their business competitiveness. The latest rankings have just been published in 2013: Best and Worst States for Business.

Texas on Top: For the 9th Year in a Row

For the ninth year in a row, chiefexecutive.net ranks Texas as the most business friendly state. Noting the Texas cost of living advantage, chiefexecutive.net points out that “Young programmers and engineers can actually afford to live well in Austin, where the housing cost index is 300 percent lower than in San Francisco.”

It is not surprising that Austin has emerged as the fastest growing metropolitan area in the United States adding 3.1 percent to its population annually since 2010. This is an astounding rate of growth --- twice that of the San Jose IT behemoth, which at current rate of growth will fall behind Austin in population by 2015. Austin’s growth rate is faster than some of the fastest growing developing world cities, such as Mumbai, Dhaka and Manila.

However there is much more to Texas Austin. Dallas-Fort Worth is the fastest growing metropolitan area with more than 5 million people in the high income world, though at an average annual growth rate since 2010 of 1.9234 percent retains only a narrow lead over similar sized Houston (1.9227 percent). Smaller San Antonio is growing marginally more quickly both Dallas-Fort Worth and Houston (though less than 2 percent).

Texas was joined in the top five by the South’s Florida, North Carolina and Tennessee, as well as Indiana, from the Midwest. Three of the top five (Texas, Florida and Tennessee) do not have a state income tax and chiefexecutive.net notes that other states are looking at tax reform that would improve the business climate.

California: Bringing Up the Rear for the 9th Year in a Row

Just as predictably as Texas ranking first, California has secured the bottom position for the ninth year in a row. A California CEO told chiefexecutive.net“On any particular element, if New Jersey is an ‘8’ on the pain-in-the-ass scale, California is a ‘9 … It’s an ungovernable state, and there’s no movement that will change that, though there are people who want to…”

Nearly as predictably, California is joined in the bottom five by older northeastern states New York, New Jersey and Massachusetts as well as Illinois, from which, like California, hundreds of thousands, even millions of people have fled since 2000.

The complete state rankings can be viewed at http://chiefexecutive.net/best-worst-states-for-business-2013.

Interactive Graphic: Ranking States By Competitiveness

Rob Sentz — Fri, 20 Jan 2012 17:57:35 -0500

In a previous post we looked at which states have been most competitive in terms of job creation since the recession.

In this post we teamed up with our friends at Tableau Software to produce the following interactive graphic, which details individual industries that are driving states to be more (or less) competitive. The graphic breaks down the performance of the 20 major sectors in every state in the contiguous US (plus Hawaii and Alaska) in terms of expected and actual job change from 2007-2011. Further explanation of the analysis is below.

Rundown on the data

We used shift share, a standard economic analysis method that reveals if overall job growth is explained primarily by national economic trends and industry growth or unique regional factors. Shift share analysis, which can also be referred to as “regional competitiveness analysis,” helps us distinguish between growth that is primarily based on big national forces (the proverbial “rising tide lifts all boats” analogy) vs. local competitive advantages.

To generate our ranking, we summed the overall competitive effect for each broad 2-digit industry sector by state (e.g., agriculture, manufacturing, health care, construction, etc.) and added them together to yield a single statewide number that indicates the overall competitiveness of the economy as compared to total economy. We calculate the competitive effect by subtracting the expected jobs (the number of jobs expected for each state based on national economic trends) from the total jobs. The difference between the total and expected is the competitive effect. If the competitive effect is positive, then the industries within the state have exceeded expectations and created more jobs than national trends would have suggested. Those industries are therefore gaining a greater share of the total jobs being created. If the competitive effect is negative, then the industries are not gaining jobs as fast as what we would expect given national trends. In this case the state is losing a greater share of the total jobs being created.

Observations On Most Competitive

The big thing that stands out is that most of the competitive states tend to be in the middle of the country. This is tied to the growth in the oil and gas sector, yes, but in most cases better-than-expected performance in construction, government, and other miscellany sectors. In Alaska, North Dakota, and Nebraska, smaller states in terms of population and jobs, manufacturing, transportation, and construction are some of the most competitive industries. Louisiana also fares quite well in healthcare and accommodation & food services.

Observations On Least Competitive

For states that rank toward the bottom, the housing bust and subsequent construction downturn is the biggest culprit. For instance, in Nevada, which is last on the list, construction is nearly 50,000 jobs below what would be expected given national and industry trends. Florida, a much more populous state, is more than 130,000 jobs below what would be expected. For states like Michigan, Ohio, and Indiana, the poor performance in manufacturing and government weighed heavily in our ranking.

Here is the original graphic that show the comparison between states.

Please check out the graphic and let us know if you have any questions. Email Rob Sentz (rob@economicmodeling.com) or hit us via Twitter @DesktopEcon. Data and analysis comes from Analyst, EMSI’s web-based labor market analysis tool.

The Impact of Federal Cutbacks

Matthew Leiphon — Fri, 02 Dec 2011 17:52:31 -0500

During my college days, I had the opportunity to interview a local government official tasked with conducting various disaster response programs. North Dakota had, at the time, been dealing with severe flood issues for nearly a decade, and the interviewee had vast experience dealing with the ins and outs of working within the system to find mitigation solutions. Asked about the challenges of having to deal with a multitude of state and federal agencies, he informed me that the most vital contacts he had were at the federal level. His reasoning?

"That's where the money is."

Given the current political winds blowing from D.C., the conditions that spurred that view might be about to change in substantial ways.

With the recent failure of the "Super Committee" to find a deal on potential budget cuts and tax reforms, states may soon find themselves faced with a set of federal spending cuts to programs and services that undergird large parts of their economy. These automatic cuts, triggered in 2013 by the committee's failure, will total nearly $1.2 Trillion and be between domestic and defense expenditures. While many may laud such cuts as a way to help bring the federal budget back towards a semblance of order, it is worth noting that the impact on state economies moving forward could be substantial.

Federal spending, be it on defense, salaries for federal workers, infrastructure, or procurement makes up a sometimes major part of state economic activity. As outlined in a recent piece at stateline.com, some states have far greater exposure than others. In New Mexico, home to several major federal research institutions, over 12% of Gross State Product (GSP) is attributable to federal government spending. Virginia and Maryland, home to so many federal workers and contractors are even more economically dependent on federal spending, with 13.5% (MD) and 18.5% (VA) of their economies being due to federal activity. The spillover of cuts at the federal level can't help but impact on the overall economic health of such states. The impact will likely be felt throughout the nation as federal agencies find themselves forced to tighten their belts.

Scholars of federalism often refer to the period since the late 1970's as the era of "New Federalism." Beginning under President Carter, and embraced fully by the conservative movement during the 1980's, New Federalism was marked by increasing devolution of powers and responsibility to state governments and calls for states to be given more control over the reins when spending allotted federal dollars.

While states continue to play an important role in the system, actions taken over the past few years under the Bush and Obama administrations seemed to hearken back to the earlier, cooperative model of federalism, with the federal government taking on a more assertive role in working with and through state and local governments to provide stimulus, reform healthcare, and implement post 9/11 security initiatives. While state leaders might have chafed at the strings tied to certain lines of funding, the dollars provided offered states a way to backfill budget shortfalls during a time of economic stress.

With the demise of the Super Committee, continued calls for deeper spending cuts and gridlock over raising revenues are setting the table for a changed federal-state relationship. As federal agencies strike their tents on various programs and initiatives, states will find themselves receiving less direct federal largess and facing lower economic activity as federal dollars working their way through the local economy are reduced. Budget austerity may lead the federal government to increasingly leave the states to their own means- devolution by force, instead of by choice.

Interactive Graphic: Job Growth by Sector for all Counties in the Nation

Josh Stevenson — Fri, 02 Sep 2011 14:44:22 -0400

The fully interactive map below indicates job growth and decline for all US counties from 2006 to 2011. These show up as hot or cold spots; red for growth, blue for decline. You can select a state to zoom in on and find a county that way, or simply click on a county to drill in. Once you’ve chosen a county, the table under the map will show you job numbers by industry category.

The data for this graphic comes from EMSI’s Complete 2011.3 dataset, based on data from the Bureau of Labor Statistics and many other sources. Many thanks to Tableau for putting this together. If you have questions or comments about the graphic or the data behind it, please email EMSI's Josh Stevenson.

"A Cloud of Contagion": States, Cities, and Federal Default

Matthew Leiphon — Wed, 27 Jul 2011 18:25:13 -0400

The Pew Center on the States has released a new report examining the impact a potential federal default would have on state and municipal governments. The picture isn't pretty.

According to Pew, "A federal default could have a serious impact on states and cities by constricting their borrowing and budgets while they are still feeling the aftershocks of the Great Recession." Loss of faith in federal debt securities could have a knock-on effect on government debt at all levels, causing jittery ratings agencies to downgrade state and local credit ratings in turn. One ratings agency, Moody's, has already warned that up to 7000 municipalities could see their bond ratings lowered in the wake of a federal default, and has placed five currently AAA rated states on a downgrade watch list. Ratings downgrades would lead to increased borrowing costs for state and local governments, restricting their long-term ability to finance desperately needed infrastructure upgrades.

In addition to raising borrowing costs, a federal default could also directly impact federal program dollars currently allocated to state and local governments. According to Pew, such transfers amounted to "$478 billion in 2010 alone." States and municipalities, already stressed by years of budget challenges, might suddenly find themselves even more cash strapped. In addition, the report points out that the suspension of federal payments to individuals, such as social security recipients and government contractors, could cause a drop in state and local tax receipts as individual incomes drop and commerce slows. While Pew feels states and local governments are "highly unlikely" to face a shutdown as a result of a federal default, they could be left scrambling to find alternative funding sources to cover already budgeted expenses they were expecting to meet with federal support.

Infographic: Which Industries Are Growing in Your State?

Joshua Wright — Wed, 29 Jun 2011 16:02:57 -0400

EMSI teamed up with Tableau Software to create this industry data display. You can visualize every broad-level (2-digit NAICS) industry by state over the last decade. Also, click on the dot for each state to see the trends for each sector. The bigger the dot, the more jobs that state has in the selected industry. It may take a few seconds to load.

A few observations:

1. Right off the bat, you can see the explosive growth of the mining sector nationally over the past few years. If you scroll to mining and oil exploration in the dropdown or isolate it by clicking on the chart, you can see Texas has by far the largest number of jobs among all states. We covered this sector and specific oil and gas extraction occupations in depth recently.

2. One of the cool things to do is scroll through each year to see the changing complexion of employment. There’s widespread growth projected for most states in 2011, with a few exceptions, but clicking back through the past few years shows a much different picture.

3. Another intriguing sector is manufacturing. In the last decade, it hasn’t fared well. That much is clear. But notice the tide start to shift in 2010, with Indiana and Michigan showing slight growth. And in 2011, nearly three-quarters of the US is expected to see job expansion.

State GDP Performance

Aaron M. Renn — Thu, 09 Dec 2010 17:23:39 -0500

Gross Domestic Product is the basic measure of economic output. The government released 2009 GDP data for US states recently, so it’s worth taking a look. Here’s a map of percent change in total real GDP from 2000 to 2009, with increases in blue, decreases in red:

As you can see, Michigan actually experienced a decline in its total real output over the last decade. Given the restructuring of the auto industry, that’s not surprising.

Here’s another view, this one a similar percent change view of real per capita GDP:

Here you can see that Michigan is not alone. Some of the fast growing Sun Belt states added people at a faster rate than they grew economic output. Georgia in particular is worth noting, because even metro Atlanta has been showing declining real per capita GDP. In fact, Georgia actually declined by more than Michigan did on this metric, so obviously all is not well down there. Texas, despite its vaunted jobs engine, is expanding almost totally horizontally. It is 9th lowest in the US on real per capita GDP growth, with a nearly flat 2% performance over the last decade.

North Dakota is also interesting. They are leading the charts, I presume driven by energy and high tech. (Thanks to Great Plains software, I believe Fargo is now Microsoft’s biggest software development center in the US outside Redmond).

This post originally appeared at The Ubanophile.

Is Illinois 'Bankrupt'?

Matthew Leiphon — Tue, 19 Jan 2010 18:26:44 -0500

While California's much publicized budget battles have made the dire financial straights faced in Sacramento a topic of regular media conversation, other states are also experiencing major fiscal woes. According to experts interviewed by Crain's Chicago Business, Illinois currently finds itself in a state of de facto bankruptcy, with the state's ledgers appearing "to meet classic definitions of insolvency: Its liabilities far exceed its assets, and it's not generating enough cash to pay its bills."

According to Crain's, "While California has an even bigger budget hole to fill, Illinois ranks dead last among the states in terms of negative net worth compared with total expenditures." The state had a record $5.1 Billion in bills past due at year's end, has failed to pay some vendors for months, and has seen the average time to pay a bill double to nearly 92 days. The state also faces rapidly mounting pension obligations, and has seen it's ability to borrow restricted by its worsening credit rating. Facing piles of liabilities, and recession reduced receipts, the state is currently "living hand to mouth, paying bills as revenues come in each day, building up cash when special payments are coming due. Cash on hand varies from day to day, sometimes dipping below $1 million".

A business or municipality facing such financial challenges might be tempted (or forced) to seek the shelter of bankruptcy protection in order to place it's books in order. States, however, do not have recourse to that option under existing federal law. As a result "rather than having a court restructure its finances as in a bankruptcy filing, a state [has]to reorganize its spending and debt on its own." Lawmakers in Springfield, faced with a situation that is bankruptcy in all but name, will have to make difficult decisions regarding future taxes and services.

New Job Market Report from Jobbait Adds New Data

Mark Schill — Fri, 11 Sep 2009 10:25:26 -0400

Mark Hovind over at Jobbait.com released his monthly job market report, and this month he's expanded it significantly with sector-level data by state and metropolitan area.

Mark offers the numbers in an easily digestible format organized by state in color coded tables. It's a great way to get a feel for what's happening in your region or nationally.

Mark hopes this will help identify sectors with job prospects, even in regions where overall employment is declining.

Looking at total job growth, North Dakota is still the only state showing year-over-year employment growth, followed by Washington, DC.

Fastest declining states by growth rate are Arizona, Michigan, Nevada and Oregon.

Fastest declining states by sheer numbers are California, Florida, Illinois, Michigan, Ohio and Texas.

See Jobbait.com for the full report.

Mapping Industry Employment Trends by State

Mark Schill — Thu, 13 Aug 2009 10:56:26 -0400

Mark Hovind at Jobbait.com has released another fascinating set of maps and data on industry employment trends by state over the past few months. Here's a taste:

The maps below show the employment trends by state and industry sector for the 12 months ending June 2009 (July will be available August 21). Green is growing faster than the workforce. Grey is growing slower. Red is declining. Black is declining more than 8%. White is not available.

Head over to Jobbait.com for the full analysis.