Beyond Urban vs. Rural: New Report Reveals Five Distinct Local Economies

Mid-sized city
Mid-sized city
(Getty Images)

WASHINGTON — August 30, 2017 — A comprehensive analysis of local economies released today by the National League of Cities (NLC) finds that 84 percent of cities report their local economies have improved since 2016. The new report, Local Economic Conditions: The Untold Story of the Varied Middle, reveals a dynamic economic landscape that has given rise to five distinct types of local economies: a highly rural cluster; a large central city cluster; and three types of mid-sized economies.

“Local leaders know that the unique assets and needs of their cities require customized approaches to economic development,” said Clarence E. Anthony, CEO and executive director of the National League of Cities (NLC). “Our report shows that both promising economic trends and complexities underlie local economies. America’s cities power the national economy, and with an even better understanding of the variance in local economies, city leaders will work together to move the country forward.”

The five groupings of local economies revealed by a cluster analysis of 224 cities are:

  • Rural Brain Drains (pop. <50k) – a cluster of highly rural cities with shrinking populations and a lack of affordable housing
  • Cities on Par (pop. 50-99k) – one of three mid-sized clusters that seems to be experiencing the national trend of slow, positive growth driven by new business starts
  • Room to Grow (pop. 100-299k) – one of three mid-sized clusters that is defined by favorable commercial property values, affordable housing stock and population growth
  • Mid-sized Business Boomers (pop. 100-299k) – one of three mid-sized clusters that features business expansions but faces significant misalignment of workforce skills and employer demands
  • Major Job Centers (pop. >300k) – a cluster of large cities with bountiful employment and business expansions that also faces significant affordable housing shortages and poverty issues

The report provides an in-depth analysis of the positive and negative economic drivers of each economy type and outlines other features such as location, percent of the total sample and city examples.

Other key findings from the 2017 analysis include:

  • New business starts and expansions drive economic growth across economy types
  • Misalignment of workforce skills and employer needs is a pressing economic challenge across economy types
  • Availability of affordable housing is an economic barrier for 42 percent of cities, with Room to Grow cities being the only economy type to identify affordable housing as positive factor

“Until now, our glimpse into mid-sized cities has been limited to a fuzzy picture of places that are not rural, not large, but someplace in between,” said Christiana McFarland, director of research at National League of Cities (NLC). “This analysis enables us to tell the untold story of the varied middle and help cities localize solutions to meet their specific needs and better harness their assets.”

Find the full analysis here.

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The National League of Cities (NLC) is dedicated to helping city leaders build better communities. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans.