Springfield, MO

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Economic Development

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by David Knight

The nation. The numbers are just now coming in for 1998. On the surface most everyone would say 1998 was a strong year for the nation's economy. The gross domestic product grew 3.9 percent for the year, with 5.7 percent growth between October and December 1998. The nation's unemployment rate is at an all-time low (4.5 percent) with employers clamoring for warm bodies to fill new positions.

New home construction has continued to fuel demand for durable goods, and the stock market finished 1998 with a year-end rally to post another 20 percent annual gain.

Local employment. Locally the unemployment rate remains at a 20-year low (2.5 percent). To balance the high demand for labor, the work force has grown to 171,000 persons, a 25 percent increase over the last five years.

The service and retail industry work forces have grown significantly. The service industry work force has grown 40 percent over the last five years, employing an additional 14,000 people. The service industry now employs 50,000 people. The retail industry has seen similar increases over the last five years with 39 percent growth adding 8,000 jobs and employing a total of 33,000 persons in 1998.

The transportation sector has shown the greatest increase in job growth (43 percent) over the last five years, adding 4,000 jobs to currently employ 11,500 people.

What has happened to the manufacturing work force? It has not grown at the same rate as the other industries.

Manufacturing employment has grown 12 percent over the last five years, adding 3,700 jobs. However, in 1998, manufacturing employment remained the same as the previous year, employing a total of 23,600 people.

Currently a debate exists regarding the merits of Springfield's economic development and manufacturing job-creation strategies. From the numbers, it looks as though manufacturing jobs are not keeping pace with the rest of the community's job growth.

To continue to see any growth in the manufacturing sector, the community must continue to take an active role in the attraction and expansion of manufacturing businesses.

Retail. As noted above, the retail sector employs thousands of people in Springfield. This sector also provides significant revenues to local and state governments to fund their operations.

Retail sales growth has flattened out, showing little or no growth over the past year. This puts pressure on local government agencies that rely on the annual sales tax growth to keep pace with increased demands of providing services and improvements in the community.

The outlying communities of Republic, Nixa and Ozark are aggressively pursuing retail projects to provide shopping opportunities for their citizens and fill the city coffers with much-needed tax revenue. Springfield must continue to pursue retail development at strategic locations if it is to continue to enjoy the benefits of being the retail hub for the region.

Construction. In 1998, lots of dirt was turned in the Springfield area. It was good to see construction projects being built throughout the community: north, south, east and west. However, the ability to forge new ground in areas of town not known for higher densities will limit the ability to balance growth and continue development.

How many people depend on growth for their livelihood? The Springfield economy has been built on growth. There are plenty of opportunities to continue growth but in a balanced approach, as the Vision 20/20 plan points out.

Residential construction remained strong, posting an 8.4 percent increase in permits over 1997. Valuation for residential permits increased 4.3 percent in 1998. Commercial construction did not fare as well, declining in both number and valuation of permits. The decline in commercial permits was 8.7 percent and valuation was down 25 percent.

(David Knight is a planner with Butler, Rosenbury & Partners and former economic development coordinator for the city of Springfield.)

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