In late 2008 the status became official: that
the Mankato-North Mankato region was changed by the federal Office of
Management and Budget from a Micropolitan Area to become Minnesota’s newest
Metropolitan Statistical Area. Of
course, most local officials knew this change of status was coming as all of
the population estimates since the 2000 Census suggested that the 50,000
threshold was near and most expected that this would be confirmed as soon as
the 2010 Census was completed. But
getting the official status declared in late 2008 was to some an early
Christmas present. It opened the door
for new levels and categories of federal funding and more importantly, it put south
central Minnesota on the screen of many corporations and their site-selection firms
seeking to expand to new, emerging and dynamic metropolitan areas.
But
is the population size of the region the only factor that makes a region
dynamic? What about MSAs like Detroit
and Cleveland whose size far surpasses south central Minnesota’s, but whose
economy has stalled and population decreasing?
No, the true measure of a dynamic region is its ability to both serve as
a hub and magnet for new job creation and sales; as well as its capacity to
reciprocate growth in its smaller outlying region.
So it
was with great interest that I read a recent report focusing on the “Trade
Center Hierarchy in Greater Minnesota” by U of M researchers William Craig and
Bruce Schwartau
( http://www.cura.umn.edu/sites/cura.advantagelabs.com/files/publications/Reporter-41-3&4-Craig-rev2.pdf). Like many demographic and economic
researchers before them, Craig and Schwartau rank greater Minnesota communities
by their 2009 taxable retail and service sales.
But in addition to this simple ranking of sales, they also examine changes
in the population size, retail sales, and sales per capita. For you see, it is in these statistics that
one can get sense of how dynamic the economy of a trade center really is; i.e.
is the community truly serving a broader region, or is it primarily serving its
own population?
A
simple example of this is to look at the communities of Willmar and
Alexandria. Willmar is by far the larger
of the two communities with a 2010 population of 19,610; while Alexandria’s
population is significantly smaller at 11,070.
Yet the smaller Alexandria had retail and service sales in 2009 totaling
$287 million, while the much larger Willmar’s sales were only at $282
million. In fact retail and service sales
grew in Alexandria (1990-2009) at a rate of 68 percent, while sales growth in
Willmar was less than half at 31 percent.
Translated into sales per capita, the smaller Alexandria reported sales of
$25,958 per person in 2009, while the larger Willmar reported similar sales of
$14,382 per person. Clearly it suggests that Alexandria is serving as a trade
center that is drawing upon a much larger area and possibly a more affluent
population than Willmar. And as one who visits both of these communities on a
periodic basis, I can attest to the significant growth in retail shops, strip
malls and hotels in Alexandria over the past decade, while such growth was not
as apparent in Willmar.
So
how did the Mankato-North Mankato MSA fair in these rankings? Well the short answer is extremely well. Of all greater Minnesota Cities it is clear
that Mankato deserves its spot at number 4 in the rankings, behind Rochester,
Duluth and St. Cloud. While Mankato’s
2009 sales were just shy of $1 billion ($904 million to be exact), the
remaining three all surpassed the billion dollar mark with Rochester leading
the pack and nearly $1.2 billion.
However, what really secured Mankato’s ranking at number 4 was the sales
figure for number 5 Brainerd, MN, whose sales were $421 million -- less than
half of Mankato’s. Clearly, the Mankato-North Mankato MSA deserves its place
and status with greater Minnesota’s other metro areas.
But
what was truly most impressive was the sales growth of the Mankato-North Mankato
region. While sales from 1990-2009 grew
at a rate of 39 percent in Rochester; 27 percent in Duluth; and 42 percent in
St. Cloud; sales grew in Mankato over the same time period at a rate of 123
percent (from $406 million in 1990 to $904 million in 2009)! Translated into sales per capita, the Mankato
area actually generated $17,153 in retail and service sales per resident, while
the similar number are $10,976, $10,986 and 10,041 for Rochester, Duluth and
St. Cloud respectively.
As I
noted earlier, having a large enough population to create a critical mass is
certainly an important factor in creating a dynamic regional center, but
population alone is not enough. Rather
the ability of a community to evolve into a truly dynamic regional center for
sales, service, health care, education, the arts and entertainment is the true
test. And based upon this analysis, it
certainly seems like the Mankato-North Mankato MSA is passing this test quite
successfully. With a 2010 population of
52,703, the Mankato-North Mankato MSA is half the size of the St. Cloud MSA at
101,206. Yet in 2009 it reported 89
percent of the retail and service sales of the St. Cloud MSA. If this trajectory continues will Mankato jump
to the number 2 spot by 2020?
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