The other day a group of chamber of commerce and economic development folks — myself included — got into a discussion about which community statistics should always be on the tips of the tongues of community leaders.
These are characteristics of an area that should be known so well that the phrase, “I’ll get back to you on that,” would not apply.
After much discussion we agreed that among the myriad mounds of data and statistics every community leader should know:
POPULATION — Everybody in the community, not just the chamber of commerce crowd, should know the population of a community. Didn’t they use to put that on the sign coming into town?
LOCAL SALES TAX COLLECTIONS are generally considered the best indicator of a community’s economic health. If local residents are spending more money it indicates that they are making more and have confidence in their financial futures. When sales tax collections in an area increase faster than the local income it is an indicator that people from outside the area are coming to town and spending money. When that happens there is usually an increase in the number of local businesses.
ACT scores (or SAT scores, in applicable) are of major interest to parents of high school age children. Often, parents will choose one school over another based on the ACT score average of the school. Likewise, prospective residents will compare ACT averages of one school district versus another.
NET NEW BUSINESSES refers to the number of new businesses established minus the number of businesses that have closed. Obviously, a positive number is desirable. If there is a negative number of net new businesses then investigation and remediation are required. Are businesses closing for good, or moving to another location? In some rural communities there are businesses that close because the owner simply has no one to take over the business and cannot sell it to someone else. Does this mean that young people are leaving the community?
AVERAGE HOME PRICE tells a lot about the local real estate market and is a good clue to the cost of living in a community versus another town. In Mississippi, the average price for a new home has been between 85% and 90% of the national average for over a decade. Mississippi new home prices are currently rising faster than the national average.
HIGH SCHOOL DIPLOMAS, or at least the percentage of population that have them, is an extremely important indicator for prospective industries. The greater the percentage, the better the industry’s chance of hiring a trainable workforce. Fortunately, this percentage is moving up in Mississippi. Workers and schools are realizing that the number of manual labor jobs is declining and that high school diplomas are necessary to even minimum skill jobs.
EMPLOYMENT RATE refers to the percentage of people working in the local economy. In today’s world an employment rate of 95% or greater is common in areas with a thriving economy. An employment rate of less than 93% these days is cause for concern.
ANNUAL INCOME measured both per capita and as median household, is one of the most oft-quoted statistics. It appears more frequently in rankings of communities and states than just about any other statistic.
DISTRIBUTION OF WORKFORCE refers to the different types of jobs in the community. A diversified economy would have no more than 40% of its workforce employed in one industry. The typical economic segments used are manufacturing, mining, construction, transportation/public utilities, wholesale/retail trade, finance/insurance/real estate, service/miscellaneous, government and public education.
These nuggets of economic, educational and social data constantly change. Good economic developers and chamber officials pay attention to the changes in these numbers and how to influence the changes in a positive manner. In this manner, they can PLAN AHEAD.
Phil Hardwick’s column on Mississippi Business appears regularly in the Mississippi Business Journal. His e-mail address is firstname.lastname@example.org.