|Canton Economic Data Analysis
||[Nov. 17th, 2015|12:01 pm]
As one of the relatively few academic economists in Stark County, I took it upon myself to start studying the economy of the area. Here are a summary of some of my findings thus far:
(1) Canton/Massillon "specialties" as identified by LQ.
Location-Quotient (or "LQ") is a measure of unusual concentration of an industry, sector, demographic group, etc. Basically, it answers the question "How much more concentrated is this sector in this area than in the US as a whole?" As a simple example, if, say, 10% of Americans work in retail, but 20% of a city's workers work in retail, then the LQ would be 2, indicating that retail is, in a sense, "twice as important" in this area than in the US as a whole. So, for Canton/Massillon!
High LQ (>1, ranked highest to lowest): Manufacturing, Education and Health, Other Services, Minining/Logging/Construction.
Low LQ (<1, ranked lowest to highest): Information, Professional and Business Services, Government, Financial Activities, Trade, Transportation, and Utilities, and Leisure and Hospitality
Our area has a specialization in manufacturing, education and health, and mining/logging/construction (this is new - thanks to fracking).
(2) Canton/Massillon most important areas of strength
To be an area of strength, you need two things: a high LQ (indicating regional specialty) and a GROWING LQ (so the specialty is getting stronger rather than weaker).
Here, there are two: manufacturing and mining/logging/construction. It may be surprising to people that manufacturing makes that list, as the narrative of the area is that manufacturing is dying. This doesn't appear to be true in our area. While manufacturing is not as important as it was many years ago, it is still an important specialty and one that has strengthened in the past five years. (Our LQ grew from 1.73 to 1.89, indicating that Canton manufacturing is doing better than US manufacturing on average in that time.) Manufacturing is also an important sector of employment, with 16.4% of employment being in that sector in the Canton/Massillon area.
Mining/Logging/Construction is really a new specialty for our area, just 5 years ago our LQ was less than 1 (indicating that we did less in these than the US on average), but it is now about 1.1. This sector, is fairly small, though - providing only 5.7% of employment in the area.
(3) Canton/Massillon biggest concerns
To be tagged as a concern, I looked for a high but weakening LQ. This indicates that the industry was important historically, but that the region has recently begun losing its edge in this area.
The biggest cause for concern is education and health. Our LQ has slipped about 3% over the past 5 years, which should be a big concern as this is the single largest provider of jobs of any sector in the area - over 19% of workers in the Canton/Massillon area work in Education or Health.
Another potential cause for concern is "other services" - there we saw a similar 3% drop in LQ, but the LQ wasn't as high to start with, and the level of employment in this sector is fairly small (about 4.7%). I wouldn't worry too much about this one.
Some future directions - I would like to do an LQ analysis for Canton v Akron, and also check into what happens if we combine the two areas, as there is a lot of cross-pollination here. (For example, my dad lives in the Canton MSA, but works in the Akron MSA, while when we first moved here, I did the opposite.) As such, it might be that the two should be treated as one large economic area. Also, it would be interesting to get a more fine breakdown rather than these very large sectors - but that's going to take some more digging.