july snapshot: employment trends & establishment growth in metro atlanta

Atlanta Regional Commission

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All Things Big and Small: Employment Trends & Business Establishment Growth in Metro

Atlanta

About the Data

• Bureau of Labor Statistics (BLS): We used BLS data to explore up to date industry sector change in Atlanta and the U.S. as a whole.

• Quarterly Workforce Indicators (QWI): A set of economic indicators including employment, job creating, earnings, and other measures of employment flows. We have used the QWI to study and compare business and employment patterns in metro Atlanta to other peer metro areas.

• Zip Code Business Patterns: We used Census business establishment/ firm numbers to look at total establishments and change in establishments on the Zip Code level.

Note: We mention both firms and establishments numerous times throughout the report. There are subtle differences, but, in general, when using these terms, we simply mean “businesses.” To learn more about the difference between firms and establishments, please visit: https://ask.census.gov/faq.php?id=5000&faqId=487

What the data tell us…

• Overall, Atlanta performs well when compared to other U.S. metros in terms of job change and employment. Atlanta ranks 2nd in relative job change against 12 other metros over the past year.

• Metro Atlanta exceeded its pre-recession employment peak in May 2014, finally digging out of the hole the Great Recession wrought.

• At the county level, Forsyth, Henry, and Paulding counties have had the highest relative increase in employees from 2000 to 2013.

• At the Zip Code level, areas in North Fulton, Forsyth, and Hall Counties have the largest increase in business establishments since 2005. Specifically, a Suwanee Zip Code has seen the largest increase.

• The Zip Codes with the highest concentrations of small businesses are all clustered along the exurban fringes of the region.

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Job Change, May 2014- May 2015

Metro Atlanta is adding jobs at a nice clip recently, especially compared with the 11 other large metros in the nation. The chart on the left shows total numbers and the chart on the right shows percentages. For total jobs added, between May 2014 and May 2015, metro Atlanta has added the fourth-most jobs. Metro Atlanta ranks second in percent change of jobs over the past year.

Source: Bureau of Labor Statistics

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Metro Atlanta's Relative Strengths Compared to Other Large Metros (Location Quotient by Super Sector)

Strengths of Metro Atlanta’s Economy

We examined metro Atlanta’s strengths by comparing the percent of employment by each “super sector” in metro Atlanta to the percentage of employment in each sector in the other 11 large metro areas. Each value above one means that metro Atlanta is relatively stronger in that sector. So Information; Trade, Transportation & Utilities, and Professional & Business Services are metro Atlanta’s relative strengths, according to this analysis.

Source: Bureau of Labor Statistics. NOTE: For comparison purposes, Mining and Logging are included with Construction

Atlanta Boston Chicago Dallas HoustonLos

Angeles Miami New York Philadelphia PhoenixSan

Francisco Washington

Construction 2 1 1 7 7 1 1 1 1 2 3 2

Manufacturing 7 10 9 9 10 10 9 10 7 10 5 10

Trade, trans., and utilities 5 9 4 4 3 5 7 6 5 7 7 4

Information 10 5 7 10 5 9 8 8 9 9 2 9

Financial activities 4 7 9 2 8 8 3 8 6 5 10 8

Professional and bus. services 3 2 2 3 6 6 5 5 10 4 1 3

Education and health services 6 4 3 4 2 2 2 2 4 3 9 1

Leisure and hospitality 1 8 5 1 1 4 3 4 3 6 4 5

Other services 9 3 8 8 9 3 6 3 2 1 6 7

Government 8 5 6 6 4 7 10 7 8 8 8 6

Ranking the Sectors in Each of the 12 Largest Metros: (% Change, May 2014-May 2015)

This chart shows which sectors have increased the most in each of the largest 12 metros by ranking the percent increase in each sector. In metro Atlanta, for example, Leisure and Hospitality as well as Construction experienced the largest percent gains in employment. In the table above, greens indicate the largest percent increases, while reds indicate the smallest increases, or, in some cases, declines.

Source: Bureau of Labor Statistics. NOTE: For comparison purposes, Mining and Logging are included with Construction

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Year-Over-Year % Change: Total Employment2008-Present

ATL U.S.

This chart indicates that Atlanta (Blue trend line) is outperforming the U.S. (Red trend line) in terms of year-over-year employment change. Atlanta’s growth in employment has outpaced the U.S.’s employment growth for almost three years now.

Job Change, 2008- Present


This shows total employment in metro Atlanta from January 2000 to May 2015. The pre-recession peak employment of 2.48 million jobs occurred in December 2007, the month the Great Recession officially began. Metro Atlanta exceeded that pre-recession peak in May 2014, and today is trading well above the December 2007 number.

Total Employment, 2000-2015


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Pre-recession peak employment: December 2007

This chart looks at business firm size, specifically small firms, as small local businesses are critical to a sustainable and healthy economy. For this snapshot, small business firms are defined as firms with 0-49 employees. Of these metros, Atlanta has the second highest percentage of small firms at 23.8%. It is right behind Chicago with 24.4% of firms that are considered “small”.

Business Firms by Size

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Atlanta Chicago Dallas Houston Washington Phoenix

% Employees in Small Business Firms, 2014 (Q2)

Source: Quarterly Workforce Indicators (All years show data for Q2)

Payroll by Business Firm Size

19.1%20.6% 21.5%

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Atlanta DC Phoenix Dallas Chicago Houston

% Payroll going to Small Business Firms (0-49 Employees)

While Atlanta has the second largest percentage of people working in small business firms, QWI payroll numbers tell us something slightly different. In terms of the percent of payroll going to small firms, we fall to 4th in ranking. These data suggest that even though many of our employees work in small firms, they are just not paid as much in comparison to other metros. Of course, cost-of-living differences among the metros explain most of this variation.


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% Employees in Medium Sized Business firms, 2014

58.5%54.6%

58.6% 56.3%50.8%

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% Employees in Large Business Firms, 2014

Distribution of Employees in Medium and Large Business Firms-Atlanta and other U.S. Metros

Medium Business firms are defined as 50-499 employees and large business firms are defined as 500+ employees

In comparing business firm size across large metros, there isn’t much variation of the percentage of employees working for medium or large firms. In general, Atlanta has a lower percentage of employees working in medium-sized firms, and a slightly higher percentage of employees working in large firms.


Distribution of Employees by Business Firm Size in Metro Atlanta

This chart shows how the distribution of employees has changed from 2000 to 2014. Due to the recession, not surprisingly, each firm size lost employees around 2010. But businesses have recovered nicely since 2010 as firms of all sizes have more employees in 2014 than in 2000.

465,430

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Small (0-49 Employees) Medium (50-499Employees)

Large (500+ Employees)

2000 2010 2014


Percent Change in the Number of Employees from 2000-2014, by County

74%70% 71%

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We used QWI data to determine the percent change in the number of employees from 2000 to 2014 in each county. We can see that the largest increases in employees are in Forsyth, Henry and Paulding counties, three counties that experienced tremendous population growth during the 2000s as well.

Source: Quarterly Workforce Indicators

Now we will look at the number of business establishments by size (instead of the number of employees by business firm size) using data from the U.S. Census’ Business Patterns program. Because the data are different, the groupings we use will be different. But, as the pie chart shows, the VAST majority of business establishments employ fewer than 20 employees (almost 86 percent).

57.5%16.4%

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Number of Business Establishments, 2013

1 to 4 employees

5 to 9 employees

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1,000 employees or more

Number of Business Establishments by Size, Metro Atlanta (2013)

Source: Business Patterns, U.S Census

Because the definition of metro Atlanta changed in 2012, we can only look at growth in the number of business establishments between 2012 and 2013. As the chart and table show, there isn’t a lot of difference in the rates of growth among the different business establishment sizes, although those employing one to four employees had the slowest rate of growth.

Change in the Number of Business Establishments by Size, Metro Atlanta, 2012 - 2013

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1 to 4 employees 5 to 9 employees All Other Establishment Sizes

Percent Change in the Number of Business Establishments

2013 2012 Change % Change

1 to 4 employees 75,789 75,168 621 0.8%

5 to 9 employees 21,617 21,387 230 1.1%

All Other Establishment Sizes 34,377 33,834 543 1.6%


129,130

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2005 2006 2007 2008 2009 2010 2011 2012 2013

This chart analyzes the total number of business establishments in the 20-county Atlanta region between 2005-2013. As the line shows, the Great Recession destroyed many business establishments, and the 20-county area has yet to recover. There are roughly 6,000 fewer establishments today than in 2007. The good news, however, is that there are about 3,400 more establishments today than during the nadir of 2011.

* Zip Codes do not adhere to county boundaries, so we included only Zip Codes that have their center point in one of the 20 counties.

Total number of Business Establishments in 20-County Atlanta Region Zip Codes*: 2005-2013


Distribution of Business Establishments, by Zip Code

The map on the left shows the total number of business establishments in 2013, with the bulk of the establishments located in the northern parts of the region, between I-75 and I-85. There is a Zip Code in Henry County that has among the most number of establishments in the region as well. The map on the right shows the number of establishments per 1,000 people. Although there isn’t much difference between the two, the areas with the most establishments per 1,000 people are clustered in the region’s most affluent areas (North Fulton, Buckhead, Decatur and Fayette County).

Total Business Establishments, 2013Total Business Establishments per 1,000

Population, 2013

Source: Business Patterns, U.S Census, via Neighborhood Nexus

Change in the total number of Business Establishments, 2005-2013

This map illustrates the number of change in business establishments from 2005 to 2013. As the map shows, the most dramatic increases the number of establishments are in North Fulton (Alpharetta/Johns Creek area), Forsyth, and Gwinnett (Suwanee/Duluth areas).

This map reflects earlier findings in the percent change in employees in each county. Forsyth County and the largest increase in establishmentsAND the largest percent increase in employees.

Business Growth, 2005-2013


Focus on small Business Establishments (1-9 Employees), 2013

This map highlights those Zip Codes where at least 90 percent of all business establishments have fewer than 10 employees – so where the heaviest concentrations of small businesses are located. As the map shows, all of these Zip Codes are located on the exurban fringes of the region, which makes some sense given that many small businesses may not require “foot traffic”, thus they don’t necessarily need to be in heavily populated areas.

Highest Concentrations of Small Businesses, 2013


july snapshot: employment trends & establishment growth in metro atlanta

Business

metro atlanta ranks

metro atlantas strengths

large metro areas

peer metro areas

business establishments

total change

employment patterns

percent of employment