Last Spring, the BLS (Bureau of Labor Statistics) released their projections for job growth through 2020. Despite the accepted belief we will benefit from “an economy built on manufacturing,” the BLS predicts US manufacturing employment will continue to decline through 2020, even as the overall economy grows. You can view the BLS findings here.

The BLS projects manufacturing’s share of jobs will drop from 8.1 percent in 2010 to 7.0 percent by 2020.

Healthcare, professional services, and education are the areas which are predicted to grow the fastest, along with the construction industry. Within these growth segments, home health care services, individual/family health care services, and management, scientific and technical consulting services should see the largest gains. Apparel and leather manufacturing will see significant decreases.

But, what does this mean for individual US metro areas? While the BLS makes predictions for national employment trends, industry growth shapes local economies. If manufacturing jobs do continue to decline, the cities dependent on manufacturing will continue to suffer more than others.

Most metro economies are focused toward some industries and away from others. Los Angeles makes movies, New York is a financial center, and Detroit builds cars. If we accept the BLS’s predictions, and each industry grows as they predict, the metro areas that should grow fastest will then be where fast-growing industries are concentrated. The Washington, D.C. area, thanks to its large share of professional services jobs, should be the big winner.

Greensboro, North Carolina, and other manufacturing centers in the South and Midwest represent the other end of the spectrum and should demonstrate the slowest growth between today and 2020.

Below is the BLS’s list of the top five U.S. metro areas (out of the top 100 largest metros) for projected job growth, with Washington in first place:

  1. Washington-Arlington-Alexandria, DC-VA-MD-WV
  2. Bethesda-Rockville-Frederick, MD
  3. Colorado Springs, CO
  4. New York-White Plains-Wayne, NY-NJ
  5. El Paso, TX

And, conversely these metros will represent the slowest growing segments, with Greensboro being the lowest:

  1. Greensboro-High Point, NC
  2. Gary, IN
  3. Los Angeles-Long Beach-Glendale, CA
  4. Grand Rapids-Wyoming, MI
  5. Columbia, SC

You may wonder, if Los Angeles is the hub of music, television and movies, what is it doing on the bottom 10 list? The projected decrease in both apparel manufacturing and a general decline in movie industry employment will slow the growth of employment in LA.

The mid-Atlantic states, Florida and parts of Texas and the Southwest all have metros where a better industry mix exists – where faster-growing industries are concentrated. The Midwest and the South, where there is less industry mix, and where manufacturing is concentrated, would have the slowest growth.

The good news for the metros on the bottom end of list is metros grew faster last decade if they had a milder, drier climate; a more educated workforce; and lower population density. A mild, dry climate attracts workers, which in turn draws businesses. A better educated workforce raises local productivity, and lower population density generally reflects a lower cost-of-living, including cheaper housing. Density is actually a better predictor of job growth, statistically speaking, than housing prices. Housing prices can fluctuate wildly, while Density, in contrast, is fairly constant.

The effect of climate and education on local growth should be no surprise – lots of academic and popular research has examined these and other factors. And even though unique and unpredictable events can change things, it’s a safe bet that metros with a nice climate and educated workforce will continue to outperform the other metros.

Density raises productivity and wage growth, and policies that limit density can stifle growth. At the same time, high-density areas have slower job growth because high density generally means high real estate prices, which force businesses and homeowners to live elsewhere. High-density metros tend to have a better educated workforce and a diverse industry mix – so high density often goes hand-in-hand with factors that boost job growth. Still, data clearly shows that high density places have slower job growth.

Combining the industry employment predictions with climate, education, and density gives us a clearer view of where jobs will be in 2020. Metros offering a good climate and low density will outperform big Northeastern and Midwestern cities. It’s a simple case of Sunbelt versus Rustbelt, and the Sunbelt wins. The five fastest and slowest job growth metros this decade now look like this:

Fastest Growth Slowest Growth
Phoenix-Mesa-Glendale, AZ Detroit-Livonia-Dearborn, MI
Tucson, AZ Milwaukee-Waukesha-West Allis, WI
El Paso, TX Cleveland-Elyria-Mentor, OH
Las Vegas-Paradise, NV Buffalo-Niagara Falls, NY
Colorado Springs, CO Gary, IN


Five fastest and slowest growth metros.

Southwestern metros, led by Phoenix, Tucson, and El Paso, lead the fast growth list. The slow-growth list is largely Northeast and Midwest, plus Los Angeles. Mild climate and low density mean that southern metros like Greensboro, North Carolina and Columbia, South Carolina, should grow faster than their unfavorable industry mix suggests, so they’re off the bottom-10 list when all factors are included.

The map below shows that employment growth will be fastest in the Southwest, Texas and parts of Florida and California. The South looks greener than before, while the Northeast and Midwest are more red. As it turns out, the metros with good climate, higher education and lower density tend, on average, to have a more favorable industry mix to begin with. But some metros blessed with industries that are likely to grow – like New York and Boston – will be held back by harsher weather and a higher cost of living. Other metros – like Phoenix and Las Vegas – should grow fast despite having concentrations of industries projected to grow more slowly.

Job Growth Map

US map of job growth

Is predicting US job growth an exact science? No. In fact, expect some of this data to be wrong. Some industries will grow faster nationally than predicted, and others will fall short of expectations. Weather, education or density could matter more or less this decade than last decade.

And there are unpredictable factors that affect metros: events far less dramatic than Hurricane Katrina can throw a city off its growth path. But people looking to move for work or pleasure need some sense of where the growth will be this decade, and industry employment projections and other factors together give us a reasonable view into where the growth is likely to be. The decades-long shift of American jobs and people from the Rustbelt toward the Sunbelt will continue.

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