BRAC’s Business Intelligence team regularly analyzes a variety of data about the Capital Region and how it compares to other metropolitan areas. One area of particular focus is the diversity of the local economy. Economies with a variety of thriving industries and clusters are much more capable of maintaining stability when adverse economic conditions—such as the price of oil, tariffs on much-needed raw materials, or natural disasters—arise.
The Capital Region’s economy fared better than its neighbors, peers, and the nation as a whole through three major disruptive events: The Great Recession, a dive in the price of oil, and the Flood of 2016. Anecdotally, our team ascribed this success to the diversity of businesses in the region – different events caused unique disruptions to each industry. It has been hard to substantiate this theory, but according to new data based on an analysis of industry and cluster employment by metro area, our conclusion was well-placed.
Economic modeling firm Emsi recently released a report ranking the Capital Region as the 8th most diverse economy in the U.S., placing it in the top 2 percent of metropolitan areas nationally.
The ranking was determined by looking at employment in functional industries—in other words, those likely to draw money into the region and drive exports. This high ranking is due to an abundance of employment in the engineering-intensive manufacturing, higher education, and government sectors, while still maintaining competitive employment numbers in the corporate management and healthcare sectors. Every sector measured has employment within 1.3 percent of the national average. The lack of any truly weak sector is a key to the region’s high ranking on the list.
Another state capital with a flagship university, Madison, Wisconsin, took the top spot, with the nation’s most diverse grouping of industries. College towns Eugene, Oregon and Lexington, Kentucky also made the top-10. This ranking demonstrates the strength of our regional assets, including: being the seat of state government, hosting the flagship university, and being home to a robust manufacturing sector. By maintaining these advantages while growing sectors such as tech and distribution, Baton Rouge’s ranking will only rise.
The Baton Rouge Area wasn’t the only Louisiana metro to be recognized; Lake Charles finished 65th (top 17 percent) and New Orleans ranked 94th (top 25 percent).
For more information, read the full Emsi report.