Sunday, 20 October 2019

The Most Important Industries in America’s Largest Cities

The Most Important Industries in America’s Largest Cities
11 Jul
7:48

Most important industries

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When starting a new business, you could build your venture around industries that are thriving in your area. Some cities are known for certain types of companies, and you may want to enter a market where businesses are already succeeding.

But what about opportunity for employees in those industries? The highest-paying jobs in the largest industries can be the most difficult to land. Ideally, a city’s top-paying industry would present plenty of lucrative job options for residents.

MagnifyMoney researchers determined the most prominent industries in the country’s 50 largest metro areas and analyzed how well those industries pay compared with the cost of living. In many instances, industry density doesn’t equate to more money in workers’ pockets.

When we plotted all 50 cities across 20 industries, retail jobs, for example, appear relatively plentiful but tend to be lower paying. High-paying utilities jobs, on the other hand, are among the scarcest positions.

Key findings

  • New Orleans has the top-paying industry relative to local cost of living: agriculture, forestry, fishing and hunting. Monthly payroll per employee in this field is roughly 160 times median monthly housing costs or 13.3 times median annual housing costs here. However, this industry has a small presence in the area, just 0.16% of all establishments.
  • Washington, D.C. takes the top spot as the metro area with the highest concentration of one industry. In the nation’s capital, nearly 22% of all establishments qualify as part of the professional, scientific and technical services industry.
  • Patterns emerge despite geographic differences: Retail makes up nearly 13% of establishments in each of the 50 cities and pay is usually low. The information industry and the management of companies and enterprises industry leaves a small footprint in cities but pays its workers well.
  • Of all industries in the study, only the professional, scientific and technical services industry shows significant variation from metro to metro. While it makes up nearly 22% of all establishments in D.C., as we noted earlier, it claims just 8.7% of establishments in Riverside, California.

Industries that pay the most based on local costs

1. New Orleans – Agriculture, forestry, fishing and hunting

Although agriculture, forestry, fishing and hunting makes up just 0.16% of all establishments in New Orleans, the industry offers employee pay that’s 159.8 times median monthly housing costs.

New Orleans has a long history of farming and agriculture in the region, thanks to rich soil resulting from years of flooding. To shorten supply chains in the city and build the local food economy, the New Orleans Food and Farm Network connects urban and regional farmers with restaurants, stores and farmers markets. Louisiana ranks No. 33 in the United States for farm cash receipts, about $3 billion, a significant drop from its 2012 peak of nearly $4 billion. The state issued more than 2.5 million recreational hunting, fishing and trapping licenses in fiscal year 2017, the most recent data available.

2. Cincinnati – Management of companies and enterprises

The management of companies and enterprises sector is made up of businesses that own equity in other companies and influence management decisions. In Cincinnati, this industry comprises 1.24% of all businesses in the metro area. These companies provide employee pay that’s 139.2 times median monthly housing costs.

The Cincinnati housing market includes counties in Ohio, Kentucky and Indiana, areas that support sectors such as professional and business services, financial activities, and educational and health-related services. Retail dominates this area’s economy — 13.7% of establishments.

3. Houston – Management of companies and enterprises

Not far behind Cincinnati, payroll per employee in Houston’s management of companies and enterprises sector is 139 times median monthly housing costs. But the industry accounts for just 1% of businesses in the area.

Houston is often thought of as a hub for the oil and gas industry, but our research showed professional, scientific and technical services is the most prolific industry in the city. To keep up, the oil and gas sector is reportedly incorporating new technology, like fintech and artificial intelligence solutions, from experts outside the field.

Industry density in major metro areas

1. Washington, D.C. – Professional, scientific and technical services

The U.S. capital’s economy is dominated by the professional, scientific and technical services sector — 21.8% of all businesses, the highest rate on our list. Average payroll per employee in that industry is quite high at $102,331 but an elevated cost of living makes that figure less impressive. Monthly payroll per employee is 58.6 times median monthly housing costs.

Jobs in the professional, scientific, and technical services sector include accounting, legal representation, engineering, computer services, advertising and consulting.

2. St. Louis – Health care and social assistance

St. Louis is slightly behind Washington, D.C., with 21.6% of all companies falling in the health care and social assistance industry. Payroll per employee in the industry is 45.6 times median monthly housing costs.

Hospitals support more than 116,000 jobs in St. Louis, according to research from the Missouri Hospital Association. Hospitals in Missouri contribute more than $26 billion in gross state product.

3. San Jose – Professional, scientific and technical services

In San Jose, 18.4% of businesses fall into the professional, scientific, and technical services sector. Jobs in the industry pay 66.9 times more than the median monthly housing costs in the area.

San Jose is the country’s most expensive housing market, where the median cost of a single-family home is $1.1 million. Rent is expensive, too — the city says renters must earn $108,920 per year to afford the average effective monthly rent of $2,723 for a two-bedroom apartment. Our study found that the highest-paying jobs belonged to those in the information industry with employee payroll 113.6 times higher than median housing costs.

Methodology

In order to find the highest paying industry and most common industry in every metro area, researchers analyzed data from the U.S. Census Bureau. To find the highest paying industry in every metro area, researchers looked at the ratio of payroll per employee to local median monthly housing costs. To find the most common industries, researchers divided the number of industry establishments by the total number of establishments.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Melissa Wylie

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Source: https://www.magnifymoney.com/blog/small-business/most-important-industries-in-americas-largest-cities/

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