prosperity index

8/14/2019 Prosperity Index

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2012 Prosperity IndexMEASURING THE SACRAMENTO

REGIONS COMPETITIVE POSITION

LIV

ABILIT

Y

ECONO

MY

SUSTAIN

AB

IL

ITY

RESID

EN

T S

PRESENTED BY
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Acknowledgments

The Center for Strategic Economic Research (CSER) is grateful for the support of the Underwriters of this projec

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2012 PROSPERITY INDEX 1

What is the Prosperity Index?

Prosperity Index Indicators

Economy Job Growth Establishment Growth Ofce Vacancy Rate Unemployment Rate Payroll Growth Small Business Loans

Residents

College Enrollment Population Growth High School Progress Educational Attainme Median Household Household Income

Income Spread

Livability Culture & Recreation Commute Time Crime Rate Charitable Contributio Fair Market Rent Housing Affordability

Growth

Sustainability Air Quality Green Buildings Alternative Commutes Solar Capacity Efcient Homes Vehicle Miles Traveled

The Center for Strategic EconomicResearch (CSER)developed theProsperity Indexin 2005 to providebusiness and community leaders in theSacramento Region a valuable tool tomeasure regional economic prosperity andtrack its performance against competitors inorder to evaluate the competition, identifyopportunities for improvement, and ultimatelyimpact change in the Region. Along with thenational average, 12 competitor regions werechosen as benchmarks for this analysis basedon feedback from economic developmentorganizations regarding metropolitan areasthat often compete with the Region forbusiness location and expansion projects.

In the past, prosperity was primarily describedby economic performance and a selectnumber of demographic trends. This viewemphasized elements such as job growth,

Competitive Regions

LIVABILITY, and SUSTAINABILITYthat span

characteristics of the local business climate,workforce, quality of life, and sustainablecommunities. The Economy element relatesto aspects that describe a regions economyand business climate. Factors that describethe population or workforce in a regionare encompassed in the Residents element.Features that reect a regions quality oflife are captured in the Livability element.Finally, the Sustainability element focuses on

the environment and sustainable communitypractices. A balance of strong performanceacross all four components contributes toregional prosperity.

In order to create a quantitative measurefor the four separate elements as well asoverall regional prosperity, a select numberof indicators were chosen. Each indicatorwas chosen for two main reasons. First, theindicator must act as a key characteristic in

unemployment, population growth, and

income. Reecting the results of economicrestructuring, increased competition, andthe importance of sustainable communities,contemporary views of prosperity provide amuch broader accounting of assets that includeall the traditional factors, but also embraceother important locational characteristics suchas education, workforce, environment, andinvestment. Overall, regional prosperity includesfour main elementsECONOMY, RESIDENTS,

Austin


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2 CENTER FOR STRATEGIC ECONOMIC RESEARCH

describing either Economy, Residents, Livability,or Sustainability overall. Second, comparativedata must be available nationally from readily-available sources that provide consistent

methodology across regions and over time.All indicators used in the project reect abalance of historical, current, and futureperformance and relate to aspects that regionalorganizations can inuence or directly affect.

Every indicator receives a score between0 and 10 based on relative rankings. Thebest performing region scores a 10, thelowest receives a 0, and all other regionsreceive scores between 0 and 10 based on

where they fall between these two extremes.The Economy, Residents, Livability, and

Sustainability elements are each created asa simple average of six indicators while theProsperity Index is a simple average of all 24indicators. The average scores are scaled as

a percentage of the best performing region.The highest scoring region receives an indexscore of 10 and all others receive scores thatdepend on their performance as a percentageof the best-performing region. When available,changes in indicator and index scores overtime reect shifts in performance relative to theselected regions and the national average.CSER updates the Prosperity Index and allrelated elements annually. The 2012 Prosperity

Index is the 8th annual release and includesthe 29th quarterly measure of the Economyelement.

How is the Sacramento Region doing?

ranked above three of the ve other measuredCalifornia regionsLos Angeles, the InlandEmpire (Riverside and San BernardinoCounties), and Stocktonall of which placedbelow the national average along withAlbuquerque. Overall, the Sacramento Regionmaintained a middle of the pack competitive

position among the regions it competes withregularly for business location and expansionprojects. Sacramentos workforce and cleantech strengths stand out in the measures alongwith the lingering negative effects of the severerecession.

PROSPERITY INDEXThe Sacramento Region placed ninth onthe 2012 PROSPERITY INDEXwith anoverall score of 7.8 out of a possible 10,as shown in Figure 1. This ties year 2007(when fewer regions were measured) for thelowest ranking Sacramento has receivedover the eight annual updates. The Region

demonstrated strong performance on theSustainability element along with a moderatescore on the Residents element. However,these strengths were offset by a somewhat lowscore on the Livability element and a last placeranking on the Economy element. Sacramento


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The SF Bay Area ranked rst on the 2012Prosperity Index, receiving healthy scores inthree of the four elements. Austin and Portlandfollowed in second and third place with very

close index scores. The same three regionstopped the previous annual Prosperity Index.

Two of Californias inland regions, the InlandEmpire and Stockton, were at the bottom ofthe 2012 list as a result of poor performanceon most of the measured elements. These two

regions, along with Albuquerque, were alsoat the bottom of the 2011 ranking.

1. SF Bay Area, CA

2. Austin, TX*

3. Portland, OR-WA*

4. Denver, CO

5. Seattle, WA

6. San Diego, CA*

7. Salt Lake City, UT*

8. Phoenix, AZ

9. Sacramento Region, CA

10. United States*

11. Los Angeles, CA*

12. Albuquerque, NM

13. Inland Empire, CA*

14. Stockton, CA*

*Note: Decimal point difference, masked by rounding in the bar chart, separate regions with similar scores.

F IGURE 1 : 2012 PROSPERITY INDEX

0 1 2 3 4 5 6 7 8 9 10

10.0

9.7

9.7

9.6

9.2

9.0

9.0

8.2

7.3

7.3

6.6

6.2

6.2

7.8

Shift inCompetitive Position

Prosperity Index

+3 Phoenix, AZ

SF Bay Area, CA Stockton, CA

-3 Salt Lake City, UT

+1 Albuquerque, NM Austin, TX Denver, CO San Diego, CA Seattle, WA

-1 Inland Empire, CA Los Angeles Region, CA Portland, OR-WA

Sacramento Region, CA United States

=


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Figure 2demonstrates that the SacramentoRegion dropped one spot from 2011 with aslight decline in the Prosperity Index score. Outof the 24 individual indicators measured in the

four elements, Sacramento posted an increasein 10 and a decrease for 10 while holdingsteady across 4. All in all, the Region moveddown in all of the measured elements exceptSustainability. Six of the competitive regions

experienced an upward shift in competitiveposition since 2011 with Phoenix benettingfrom the largest movement up three spots dueto improvements in three of the four elements.On the other end of the spectrum, six regionsmoved down in ranking in the past yearSaltLake City fell three places, the largest dropacross all regions, primarily as a result ofdeclines in the Livability and Sustainabilityelements.

1. SF Bay Area, CA

2. Austin, TX*

3. Portland, OR-WA*

4. Denver, CO

5. Seattle, WA

6. San Diego, CA*


8. Phoenix, AZ


10. United States*


12. Albuquerque, NM

13. Inland Empire, CA*

14. Stockton, CA*

F IGURE 2 : 2011/2012 PROSPERITY INDEX

0 1 2 3 4 5 6 7 8 9 10

10.0

2012 Score

2011 Score (Rank)

10.0 (1)

9.79.3 (3)

9.79.3 (2)

9.69.1 (5)

9.29.0 (6)

9.08.7 (7)

9.09.1 (4)

8.27.0 (11)

7.88.0 (8)

7.37.3 (9)

7.37.2 (10)

6.6

6.1 (13)6.2

6.2 (12)

6.25.9 (14)


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ECONOMY ELEMENTFigure 3shows that the Sacramento Regionsscore of 3.3 out of a possible 10 on theEconomy element places it last among thecompetitor regions, clearly reecting therelatively slow recovery in the regionaleconomy. Sacramento dropped two placessince 2011, falling below the two Californiaregions at the bottom of the list last year, the

Inland Empire and Stockton. Only four of thecompetitor regions surpassed the national

average in 2012 including Austin, SaltLake City, the SF Bay Area, and Portland,demonstrating the relative strength of theeconomies in these markets. Seven of themeasured areas experienced a positive shiftin competitive position in the past year led bySalt Lake City, which moved up ve spots. Theremaining seven competitor regions all moved

down with Denvers four-position drop beingthe most pronounced.

1. Austin, TX

2. Salt Lake City, UT

3. SF Bay Area, CA*

4. Portland, OR-WA*

5. United States

6. Seattle, WA

7. Los Angeles Region, CA

8. San Diego, CA

9. Denver, CO

10. Phoenix, AZ

11. Inland Empire, CA

12. Stockton, CA

13. Albuquerque, NM



F IGURE 3 : 2012 ECONOMY Element

0 1 2 3 4 5 6 7 8 9 10

10.0

8.9

8.4

8.4

7.4

7.3

7.1

4.9

6.8

5.5

7.0

3.3

3.4

6.9

Shift inCompetitive PositionECONOMY Element

+5 Salt Lake City, UT

-4 Denver, CO

+1 Austin, TX Phoenix, AZ

-2 Sacramento Region, CA San Diego, CA

Seattle, WASF Bay Area, CA

+3 United States

+2 Inland Empire, CALos Angeles, CAStockton, CA

-3 Albuquerque , NM

-1 Portland, OR-WA


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Region

Establishment

Growth

Job

Growth

Office Vacancy

Rate

Payroll

Growth

Small Business

Loans

Unemploym

RateAlbuquerque, NM 2.4 0.0 5.3 0.0 0.0 8.6

Austin, TX 9.0 10.0 7.1 10.0 2.3 9.7

Denver, CO 3.3 8.2 7.7 3.1 2.7 8.2

Inland Empire, CA 10.0 5.9 1.4 4.7 1.5 3.2

Los Angeles Region, CA 6.9 4.3 6.6 1.2 10.0 5.1

Phoenix, AZ 5.2 8.4 0.0 8.0 2.8 8.2

Portland, OR-WA 6.6 7.2 9.8 8.5 0.6 7.5

Sacramento Region 5.5 (+) 2.4 (+) 1.2 (-) 1.5 (-) 1.1 (n/a) 4.3 (=)

Salt Lake City, UT 5.0 9.6 7.3 4.4 6.3 10.0

San Diego, CA 6.8 5.6 6.7 0.6 7.4 6.5Seattle, WA 0.0 7.3 6.9 9.5 3.4 8.1

SF Bay Area, CA 7.6 8.3 10.0 4.4 3.0 7.1

Stockton, CA 8.9 4.9 7.7 1.4 0.5 0.0

United States 4.7 5.9 7.1 4.8 5.5 7.8

F IGURE 4 : 2012 ECONOMY Element Indicator Scores

Notes: + refers to improvement in score over 2011, represents decrease in score from 2011, and = means no change in score since 2011. The Small Business Loans indicator was introduced in thquarter of 2012, replacing the Venture Capital Investment indicator.

As illustrated in Figure 4, the Sacramento Region received a decent score on only oneof the six Economy element indicators, Establishment Growth. Sacramento posted weakscores on the remaining ve indicators including notably low performance on OfceVacancy Rate, Payroll Growth, and Small Business Loans. Conversely, the top-rankingregion, Austin, received strong scores on every indicator with the exception of SmallBusiness Loans. There was some positive movement in two of Sacramentos scores overthe past yearEstablishment Growth (posting the most pronounced improvement) andJob Growthwith the remaining four indicators falling or remaining stable. Comparedto its primary competitor regions, the Sacramento Region presents a weak competitiveposition in most measures of overall economic conditions.


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Figure 5tracks the Sacramento Regions scores on the Economy element over time anddemonstrates that the Region has received scores below 4 on a 10-point scale in nineseparate periods with many of those coming in the past couple years. In fact, with theexception of the previous quarter, Sacramento has not been above 3.3 since the fourthquarter of 2010. Even during points with relatively high scores, the Region has notsurpassed a sixth place rank, which it has only received once in the fourth quarter of2009. At the second quarter of 2008 low point, the Region placed above two othercompetitor regionsit has only ranked at the bottom of the list in two recent periods,the rst and third quarters of 2012.

*Note: Index methodology changesthe Q3-11 revision is significant in that 12 rather than 10 regions are measured.

F IGURE 5 : Sacramento Region ECONOMY Element Score Trend

5.3

6.2

4.2

4.64.4 4.3

3.5 3.6

4.0

4.74.9

4.5

5.1

5.4

6.6

6.3

5.7

5.2 5.1

2.6

3.12.7

3.2

4.8

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2.52.3

2.93.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

4.6


10/24


RESIDENTS ELEMENTAs shown in Figure 6, the Sacramento Regionplaced sixth among its main competitors on

the 2012 Residents element with a healthyscore of 8.0 out of a possible 10. The Regionfell one spot since 2011, moving it belowDenver. Sacramento placed above three ofthe other measured California regions, butfell behind the SF Bay Area and San Diego.The top two regions, Austin and San Diego,remained the same, but traded places overthe past year. Denver posted the greatestupward shift in competitive position whilethe Inland Empire saw the largest drop. Two

other regions moved up in rank since 2011,

four others dropped (including Sacramento),and four held the same spot. Like in previous

years, every measured region exceeded thenational average in the Residents element,highlighting the strong ability to draw residentsand maintain a high quality workforce amongthis group of competitive regions in theWestern United States.

The Sacramento Region demonstrated strongperformance on the College Enrollment, HighSchool Progress, and Household IncomeSpread indicators in the 2012 Residentselement. The Region posted modest scoreson Educational Attainment and Median

Shift inCompetitive PositionRESIDENTS Element

+1 Albuquerque, NM Austin, TX Phoenix, AZ

Stockton, CA

-1 Los Angeles, CASacramento Region, CASan Diego, CASF Bay Area, CA

+2 Denver, CO

-2 Inland Empire, CA

Portland, OR-WASalt Lake City, UTSeattle, WAUnited States

=

1. Austin, TX

2. San Diego, CA


4. Denver, CO*

5. SF Bay Area, CA*


7. Seattle, WA

8. Portland, OR-WA

9. Albuquerque, NM

10. Phoenix, AZ


12. Stockton, CA

13. Los Angeles, CA

14. United States


F IGURE 6 : 2012 RESIDENTS Element

0 1 2 3 4 5 6 7 8 9 10

10.0

9.4

8.5

8.4

8.0

7.9

8.4

6.3

5.7

7.0

4.4

4.9

6.9

5.2


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Household Income, but received a weakscore on the Population Growth indicator.By comparison, Austin, the rst place region,garnered the top score in two indicatorsand mixed results across the remaining four.Sacramento saw upward movement in thescores on half of the measured indicatorswith the other half dropping since 2011the Household Income Spread indicatorexperienced the greatest gain among the

Region

College

EnrollmentEducationalAttainment

High SchoolProgress

HouseholdIncomeSpread

MedianHousehold

IncomePopulation

Growth

Albuquerque, NM 9.8 4.5 0.0 8.8 4.2 1.0

Austin, TX 10.0 8.5 2.8 5.7 3.9 10.0Denver, CO 2.2 8.8 8.2 6.3 5.0 4.0

Inland Empire, CA 0.4 0.1 8.1 9.5 2.3 2.8

Los Angeles, CA 6.3 4.8 5.3 3.6 0.0 0.2

Phoenix, AZ 1.5 4.1 7.6 8.8 1.7 2.3

Portland, OR-WA 0.0 6.5 8.0 8.3 3.3 2.4

Sacramento Region, CA 8.4 (-) 4.9 (+) 7.0 (-) 8.5 (+) 3.2 (+) 0.9 (-)

Salt Lake City, UT* 2.5 5.2 10.0 10.0 4.4 2.7

San Diego, CA 8.6 6.7 9.6 7.2 4.8 1.6

Seattle, WA 0.1 8.0 8.2 6.9 6.2 3.1

SF Bay Area, CA 6.6 10.0 6.3 0.0 10.0 1.7Stockton, CA 0.4 0.0 6.8 10.0 1.9 2.1

United States 1.8 4.0 3.2 7.2 1.8 0.0

F IGURE 7 : 2012 RESIDENTS Element Indicator Scores

Note: + refers to improvement in score over 2011, represents decrease in score from 2011, and = means no change in score since 2011.

group. While the Sacramento Regioncontinues to maintain a notable competitiveposition in terms of workforce and populationdynamics, it is concerning that this positionhas been steadily dropping since the rstplace ranking it received in 2005. TheRegions current strengths in population andworkforce dynamics are primarily shaped byincome equality and college enrollment.


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1. Denver, CO

2. Seattle, WA*


4. San Diego, CA*

5. Albuquerque, NM*

6. United States

7. Portland, OR-WA

8. Los Angeles, CA

9. Phoenix, AZ

10. SF Bay Area, CA*

11. Sacramento Region, CA*

12. Austin, TX


14. Stockton, CA


F IGURE 8 : 2012 LIVABILITY Element

0 1 2 3 4 5 6 7 8 9 10

10.0

8.4

8.4

8.1

7.8

8.1

7.6

6.8

6.8

7.5

4.3

4.5

7.4

5.0

Shift inCompetitive PositionLIVABILITY Element

+7 Seattle, WA

+6 Albuquerque, NM

-5 Los Angeles, CAUnited States

+3 Denver, CO

+1 Inland Empire, CAPortland, OR-WA

-1 Salt Lake City, UTStockton, CA

-2 Austin, TX

-4 Phoenix, AZSacramento Region, CA

+2 San Diego, CASF Bay Area, CA

LIVABILITY ELEMENTThe Sacramento Region was in the bottomtier of regions on the 2012 Livability Element,

coming in eleventh place with a score of6.8 out of 10, as shown in Figure 8. Thisreects a four-place drop since 2011, shiftingSacramento below several other regions itsurpassed in the previous year. Despite thisdrop, the Region remained above three othermarkets including two in California, the InlandEmpire and Stockton (which were also at thebottom of the list last year). Denver moved upthree spots to take the rst place rank in 2012

followed by Seattle, which experienced asignicant jump of seven places since 2011.

Five other regions posted a positive shift incompetitive position with seven dropping inrank (Los Angeles saw the largest decline ofve spots). Only ve of the competitor regionsplaced above the national average in 2012,suggesting that most of the measured regionscontinue to be seen as less competitive interms of strict, quantitative quality of lifeattributes compared to the rest of the country.


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Region

CharitableContributions

CommuteTime

CrimeRate

Culture &Recreation

Fair MarketRent Growth

HousingAffordability

Albuquerque, NM 1.1 8.9 1.5 1.1 10.0 9.0

Austin, TX 2.2 6.2 3.5 2.2 0.0 5.5

Denver, CO 3.3 5.7 8.1 5.7 8.6 8.1Inland Empire, CA 0.0 0.0 8.0 0.7 1.4 7.6


Phoenix, AZ 0.9 6.2 4.4 3.4 6.0 8.4

Portland, OR-WA 3.2 7.1 7.4 2.3 2.6 7.1

Sacramento Region, CA 1.1 (=) 5.8 (+) 6.0 (-) 1.7 (-) 3.2 (-) 8.8 (-)

Salt Lake City, UT 1.2 10.0 2.8 3.8 5.5 9.7

San Diego, CA 3.4 8.2 10.0 4.2 2.9 3.1

Seattle, WA 10.0 4.0 3.2 4.6 5.7 5.8

SF Bay Area, CA 9.0 3.7 6.9 5.7 1.6 0.0

Stockton, CA 0.9 3.3 0.0 0.0 2.9 10.0

United States 3.4 6.5 6.8 3.8 2.7 7.5

F IGURE 9 : 2012 LIVABILITY Element Indicator Scores


Figure 9demonstrates that the Sacramento Region did well in the Housing Affordabilityindicator with moderate scores also seen in the Commute Time and Crime Rate indicators.Sacramento posted fairly low scores on the remaining three Livability element indicators.Denver, the top ranked region, on the other hand, illustrated healthy performance on all but oneindicator. Only one of the indicators in Sacramento showed a score increase over the previous

year, Commute Time, while four of the other indicators dropped and one held steady. On thewhole, the Sacramento Region is struggling with quality of life relative to its main competitorswith affordability acting as the dening characteristic.


14/24


SUSTAINABILITY ELEMENTThe Sacramento Region moved up three spotson the Sustainability element, ranking third with

a score of 8.1 out of a possible 10. Figure 10reveals that the Region placed above allmeasured California regions besides the SF BayArea, which took trst place in 2012. The SFBay Area traded places with Portland, whichfell into second place in this update. In total,seven regions moved up on the Sustainabilityelement since 2011 with Phoenix seeing the

greatest shift of four places. Salt Lake Cityposted the largest decline in competitive

position dropping ve spotsve other regionsshifted down compared to last year while oneremained in the same place. All of themeasured regions except the bottom two(Albuquerque and Salt Lake City) placedabove the national average, showing thecontinued leadership on environmental factorsand adoption of sustainable practices in theseregions, particularly those at the top of the list.

Shift inCompetitive Position

SUSTAINABILITY Element

+4 Phoenix, AZ

+3 Austin, TXSacramento Region, CA

-5 Salt Lake City, UT

+1 Los Angeles, CASF Bay Area, CAUnited States

-1 Inland Empire, CAPortland, OR-WASeattle, WA

-4 Denver, CO

+2 San Diego, CA

= Albuquerque, NM

-3 Stockton, CA

1. SF Bay Area, CA

2. Portland, OR-WA


4. Austin, TX

5. Seattle, WA

6. Phoenix, AZ*

7. Denver, CO*

8. Stockton, CA

9. San Diego, CA



12. United States*


14. Albuquerque, NM


F IGURE 10: 2012 SUSTAINABILITY Element

0 1 2 3 4 5 6 7 8 9 10

10.0

9.7

8.1

7.6

7.1

7.5

7.1

5.2

5.0

6.5

3.8

4.5

5.8

5.0


15/24


Region

AirQuality

AlternativeCommutes

EfficientHomes

GreenBuildings

SolarCapacity

Vehicle MilesTraveled

Albuquerque, NM 4.1 0.0 10.0 0.7 0.9 0.0

Austin, TX 4.7 3.8 6.6 6.6 5.7 3.7

Denver, CO 3.2 3.3 8.3 9.5 1.4 3.4

Inland Empire, CA 0.0 2.3 5.3 0.2 7.6 5.8


Phoenix, AZ 3.2 3.0 9.5 1.5 9.1 2.7

Portland, OR-WA 10.0 6.3 2.0 10.0 1.1 10.0

Sacramento Region, CA 5.1 (+) 3.4 (=) 2.8 (+) 6.1 (+) 8.5 (-) 7.1 (=)

Salt Lake City, UT 3.5 2.1 4.8 0.1 0.4 7.6

San Diego, CA 6.3 2.7 0.0 5.0 9.0 0.9

Seattle, WA 9.8 6.8 0.7 9.1 0.0 4.2

SF Bay Area, CA 9.6 10.0 1.3 8.5 10.0 1.4

Stockton, CA 6.8 3.3 0.9 0.0 6.0 9.4

United States 5.7 2.6 4.0 2.1 1.9 4.0

F IGURE 11: 2012 SUSTAINABILITY Element Indicator Scores


As Figure 11illustrates, the SacramentoRegion posted strong scores on the SolarCapacity and Vehicle Miles Traveledindicators along with moderate scores in AirQuality and Green Buildings. Sacramentoreceived relatively weak scores on theremaining two indicators, AlternativeCommutes and Efcient Homes. Incomparison, the SF Bay Area garnered thehighest score for Alternative Commutes andSolar Capacity coupled with high scores on

Air Quality and Green Buildings. TheSacramento Regions scores moved up sincethe last reading for three indicators, held steadyon two, and dropped on only one. While stillposting a low score, the Efcient Homes

indicator experienced the largest improvementin Sacramento. Overall, the SacramentoRegions competitive strength in sustainability isbecoming more evident with continued solidperformance in the adoption of solartechnologies.


16/24


What data are behind the SacramentoRegions scores?

Economy ElementFrom the fourth quarter of 2010 to 2011,the number of business establishments in theSacramento Region increased 1.6 percent,slightly higher than at the national level whereestablishments increased by 1.2 percent. The

Regions performance was stronger than thesame period in the previous year where growthwas minimal at 0.1 percent (fourth quarter of2009 to 2010).

Employment in the Sacramento Regionremained stable between the fourth quarters of2010 and 2011the nation overall posteda gain of 1.3 percent in the same period. Incomparison, at the same time last year, theRegion experienced -1.3 percent job growth(fourth quarter of 2009 to 2010).

considerably higher than the national averagethat measured 8.3 percent. This marks a modestdecrease for the Region over the same measurelast year of 12.9 percent (12 months ending

June 2011).

Residents Element In 2011, 9.1 percent of theSacramento Regions populationwas enrolled in college or graduateschool, while the national averagewas only 8.6 percent. This shows aslight decrease for the Region fromthe same measure in 2010 of 9.3percent.

The Sacramento Region posted a 23.5percent ofce vacancy rate for the secondquarter of 2012, which was notably higherthan the national average of 15.7 percent. The

Regions same measure last year was just slightlylower at 23.1 percent (second quarter of 2011).

Total industry payroll in the Sacramento Regiondeclined by 2.1 percent between the fourthquarters of 2010 and 2011, which reected amuch greater decrease than the national averageof -0.5 percent. The Regions annual payrolldecline marks a setback from the previous yearwhere payroll increased by 2.2 percent (fourthquarter of 2009 to 2010).

Small business loans per employee in the

Sacramento Region in the fourth quarter of 2011equated to $7.70, signicantly lower than themeasured loan amount per employee at thenational level of $60.40. As this indicator wasintroduced after the 2011 Prosperity Index (rstquarter of 2012), no comparisons can be madeto the previous update.

The Sacramento Regions averageunemployment rate for the 12 months ending

June 2012 was 11.7 percent, which was

About 38.5 percent of the SacramentoRegions population had an Associate Degreeor higher in 2011, a level of educationalattainment higher than the national average of

36.3 percent. The Region showed a slightlylower level in 2010 (38.0 percent).

Approximately 17 percent of the SacramentoRegions population age 15 to 19 was enrolledin 12th grade in 2010, which is a greaterlevel of high school progress than the nationalaverage of 15.9 percent. This same measurelast year in the Sacramento Region was slightlyhigher at 18.3 percent (2009).

With a divergence between median andaverage household income in 2011 of

$17,317, the Sacramento Region had a muchsmaller income spread than the national averageof $19,319. This is a somewhat higher levelof divergence for the Region than the samemeasure in 2010 of $16,288.

At $54,579, median household income inthe Sacramento Region in 2011 surpassedthe national average of $50,502. The samemeasure for the Region in 2010 was higher at$55,578, not adjusted for ination.


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Selection of Regions:In addition to the national average, twelve competitor regions were chosen as benchmarks based on feedback from

economic development organizations in the Sacramento Region regarding metropolitan areas that often compete with

the Region for business location and expansion projects. Five of the regions are located in California and the other

seven are located throughout the Western United States.

How are regions and indicators defined?

Sacramento Region, CAEl Dorado,Placer, Sacramento, Sutter, Yolo, and YubaCounties

Albuquerque, NMBernalillo, Sandoval,Torrance, and Valencia Counties

Austin, TXBastrop, Caldwell, Hays,Travis, and Williamson Counties

Denver, COAdams, Arapahoe, Boulder,Broomeld, Clear Creek, Denver, Douglas,

Elbert, Gilpin, Jefferson, and Park CountiesInland Empire, CARiverside and SanBernardino Counties

Los Angeles, CAOrange, Los Angeles,and Ventura Counties

Phoenix, AZMaricopa and PinalCounties

Portland, OR-WAClackamas,Columbia, Multnomah, Washington, andYamhill Counties in Oregon and Clark andSkamania Counties in Washington

Salt Lake City, UTBox Elder, Davis,Morgan, Salt Lake, Summit, Tooele, andWeber Counties

San Diego, CASan Diego County

Seattle, WAKing, Kitsap, Pierce, andSnohomish Counties

SF Bay Area, CAAlameda, ContraCosta, Marin, San Benito, San Francisco, SanMateo, and Santa Clara Counties

Stockton, CASan Joaquin County

United Statesnational average


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Criteria for Indicators: Key characteristic in describing either Economy, Residents, Livability, or Sustainability overall

Comparative data available nationally from sources that provide consistent methodology across regionsand over time

Relate to aspects that regional organizations can influence or directly affect

Economy Element IndicatorsJob Growthaccounts for the year-over-year percentage increase in average fourthquarter employment from 2010 to 2011.This measure is often viewed as an indicatorof overall economic performance sinceemployment is the primary source of incomefor residents and changes in the level of jobsreect local business patterns. The sourcefor this data is the Bureau of Labor StatisticsQuarterly Census of Employment and Wages.

Establishment Growthmeasures thepercentage increase in rms from the fourthquarter of 2010 to the same quarter of 2011.As an indicator of the overall business climate,this measure shows net changes in the numberof businesses and captures rm births anddeaths. The source for this data is the Bureauof Labor Statistics Quarterly Census ofEmployment and Wages.

Office Vacancy Ratecalculates thepercentage of the total net rentable areaof ofce property that was unoccupiedin the second quarter of 2012. Highvacancies indicate a lack of demand and/oroverdevelopment and can also be interpretedas signs of economic slowdown. Regions withhigh vacancy rates receive low scores on thisindicator. The sources for this data are the CBRichard Ellis Ofce Vacancy Index and MarketView reports and Colliers International MarketReports.

Payroll Growthmeasures the percentageincrease in aggregate compensation overa one-year period (in this case, from thefourth quarter of 2010 to the fourth quarterof 2011). This data provides insight intochanges in total industry payrolls, pointing togeneral business performance and the levelof available consumption and savings activity.The source for this data is the Bureau of LaborStatistics Quarterly Census of Employmentand Wages.

Unemployment Ratecalculates a 12-monthmoving average (ending in June 2012)percentage of the labor force that wasunemployed. Higher unemployment ratesindicate signs of economic slowdowns,increased competition for jobs, and decreasedability to generate income while lower ratestend to signify growth and expansion. Regionswith low unemployment rates receive higherscores on this indicator. The source for this

data is the Bureau of Labor Statistics LocalArea Unemployment Statistics.

Small Business Loansaccounts for the grossdollar volume of SBA 7(a) loans per employeein the state originating from banks withinthe measured region for the fourth quarterof 2012. This indicator not only points toregional entrepreneurial and small businessactivity, but also has future implications sincerms receiving the loans use the funds tosupport purchases to accelerate businessgrowth. The sources for this data are the

U.S. Small Business Administration Ofceof Capital Access and the Bureau of LaborStatistics Quarterly Census of Employmentand Wages. This indicator was introduced inthe rst quarter of 2012 to replace the VentureCapital Investment indicator, which wasmeasured in versions of the Prosperity Indexprior to that date.

Residents Element IndicatorsCollege Enrollmentmeasures the percentage

of the population enrolled in college orgraduate school in 2011. This indicatorpoints to the strength of higher educationinfrastructure in a region as well as potentialfuture changes in educational attainment levelsand the availability of a highly educated laborforce. The source for this data is the CensusBureaus American Community Survey.


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Educational Attainmentcaptures thepercentage of the population (age 25 andabove) whose highest level of education waseither an Associate, Bachelors, Graduate, or

Professional Degree in 2011. Higher levels ofeducational attainment reect a higher-skilledlabor force, which can attract businesses thatdemand higher skilled workers and pay highersalaries. The source for this data is the CensusBureaus American Community Survey.

High School Progressmeasures thepercentage of the late-teenage population(15 to 19 years old) enrolled in 12th gradein 2010. This indicator demonstrates theeducational systems capacity to facilitatestudents progress to the senior year of

high school and reects other elements ofeducational quality and retention. Studentswho reach 12th grade have generallyacquired aptitudes throughout the prior gradesand have the potential to receive a diploma,become part of the labor force, and pursuehigher education or training. The sourcesfor this data are the National Center forEducation Statistics Common Core Data andthe Census Bureaus American CommunitySurvey.

Household Income Spreadcalculates thedivergence between the average householdincome and median household income in2011. The magnitude of this divergencemeasures household income inequality ina regiona low divergence indicates thatthere is a lower disparity between householdincome levels than in an area with a higherdivergence. Lower inequality can create amore stabilized social and political climate inaddition to a more competitive workforce andregion overall. Regions with a low divergencereceive higher scores on this indicator. The

source for this data is the Census BureausAmerican Community Survey.

Median Household Income represents theincome level where half of all householdsin the region fall below the median incomein 2011 and the other half fall above the

median value. Measures of household incomereect both the potential consumption activityof a mid-level household and a regionsgeneral standard of living. The source forthis data is the Census Bureaus AmericanCommunity Survey.

Population Growthmeasures the percentageincrease in residents over a one-year period(in this case, from July 1, 2010 to July 1,2011). This indicator is important becauseit reects the attractiveness of a region aswell as many economic aspects including the

size of the labor force, consumer base, anddelivery of public services. The source forthis data is the Census Bureaus PopulationEstimates.

Livability Element IndicatorsCharitable Contributionscaptures publiccharity and private foundation revenue percapita from contributions, gifts, and grants in2010. Public charities include organizationsinvolved in the arts, education, health care,

and human services. Private foundationsgenerally act as grant-making organizationsand channel funds to other community andnon-prot organizations. These indicators havefuture impacts due to the fact that funds aregiven to other organizations so that they canprovide future services and conduct ongoingactivities. The sources for this data are theNational Center for Charitable StatisticsPrivate Foundation and Public CharityRevenue Source data and the Census BureausPopulation Estimates.

Commute Timeaccounts for the averagetravel time to work in minutes in 2011 (forworkers age 16 and above). Commutetimes function as an indicator of the level ofcrowding in a region, the quality of urbanplanning and transportation infrastructure,and the effects of urbanization and sprawl.Regions with shorter travel times receivehigher scores on this indicator. The sourcefor this data is the Census Bureaus AmericanCommunity Survey.


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Crime Ratemeasures the total number ofreported violent and property crimes per100,000 residents in 2010. This data canbe used to assess the relative safety of oneregion to another based on the prevalenceof reported criminal activity. Regions withlow crime rates receive higher scores on thisindicator. The source for this data is the FederalBureau of Investigations Uniform Crime Report.

Culture and Recreationmeasures the totalamount of gross regional product in the Arts,Entertainment, and Recreation industry per1,000 residents in 2010. This indicatorreects the level of cultural and recreationalopportunities that act as amenities for theregions residents and a draw for visitors and

related spending from outside the region.The source for this data is the Bureau ofEconomic Analysiss Gross Domestic Productby Metropolitan Area and Local Area PersonalIncome reports.

Fair Market Rent Growthcaptures thepercentage increase in Fair Market Rent over aone year period (2011 to 2012 in this case).Since housing is a major component of manycost of living estimates, this indicator servesas a proxy for changes in cost of living overtime. Regions with high growth rates receivelow scores on this indicator. The source for thisdata is the Department of Housing and UrbanDevelopments Fair Market Rents data.

Housing Affordabilitymeasures the share ofhomes sold in the second quarter of 2012that would have been affordable to a familyearning the median income. This indicatortakes into account behavior in both incomelevels and the regional housing market andprovides a point-in-time insight into cost of livingand perceptions of regional affordability. The

source for this data is the National Associationof Home Builders-Wells Fargo HousingOpportunity Index.

Sustainability Element IndicatorsAir Qualitycaptures the population weightedaverage air quality index (AQI) readingsmeasured specically for ozone for all days

and sites within a region in 2011. Ozone,attributed in large part of emissions fromcombustion engines, is the main cause ofsmog and presents health hazards in theform of respiratory problems. Higher AQIscores represent undesirable conditions, butare not necessarily classied as unhealthyuntil they reach established moderate andhigh readings. The source of this data is theEnvironmental Protection Agencys AirExplorerand the Census Bureaus American CommunitySurvey.

Alternative Commutesreects the proportionof commutes to work using a means otherthan driving alone in a car, truck, or vanin 2011. The use of public transportation,carpooling, and other commutes generatea lesser emissions impact and often makesmore efcient use of transportation corridors.The source of this data is the Census BureausAmerican Community Survey.

Efficient Homesreects the share of homesbuilt in 2011 that were qualied as ENERGY

STAR based on efciency guidelines set by theEnvironmental Protection Agency. This measuredemonstrates the movement of the residentialconstruction sector toward more efcienthomes as well as the demand for energy-saving features in the new home market. Thesources for this data are the ENERGY STARNew Homes Partner database and CensusBureaus Building Permits statistics.


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Data for the following area were not available from the Census Bureaus American Community Survey Salt Lake CityBox Elder County

Data for the following areas were not disclosed in the Bureau of Economic Analysiss Gross Domestic Product by Metropolitan Area Salt Lake CityBox Elder, Davis, Morgan,and Weber Counties; Albuquerquedata for this metropolitan area was estimated by CSER using statistical analysis of the relationship to sector wages and state patterns

Data for the following area were not available from the National Association of Home Builders-Wells Fargo Housing Opportunity Index Salt Lake CityBox Elder County

Complete agency data for the following areas were not available from the Federal Bureau of Investigations Uniform Crime Report Salt Lake CityBox Elder County; PortlandColumbia County (data for this area was held constant since the previous year since crime rate calculation are significantly affected in its absence)

The ENERGY STAR New Homes Partner database does not have information for the following area Salt Lake CityBox Elder County

Data for the following area were not available from Environmental Protection Agencys AirExplorer SeattleKitsap County

The Texas Transportation Institutes Annual Urban Mobility Report was not updated for use in the 2012 Prosperity Index; therefore, related indicator data was held constant over theprevious year.

Each of the indicators reflected in these data sources were deemed important in measuring economic prosperity and, despite incomplete data, the patterns presented areconsidered reasonable representations of the selected regions.

Green Buildingsmeasures the square footageof structures meeting United States GreenBuilding Council (USGBC) Leadership inEnergy and Environmental Design (LEED)requirements for building performance andsustainability on a per 1,000 employee basisas of September 2012. Buildings classied asLEED are generally more energy efcient andoffer healthier conditions with lower operatingcosts and less impact on the environment.The sources for this data are the U.S. GreenBuilding Councils LEED Certied ProjectDirectory and Census Bureaus AmericanCommunity Survey.

Solar Capacityaccounts for the totalinstalled solar photovoltaic kilowatt capacityin a region per one million residents as ofSeptember 2012. This measure demonstrates

a regions adoption of renewable energyoptions, which have the potential to generateenvironmental benets and cost savings.The sources for this data are the NationalRenewable Energy Laboratorys Open PVProject database and Census BureausAmerican Community Survey.

Vehicle Miles Traveledmeasures daily milestraveled by vehicles on freeways and arterialstreets in major cities within a region on a per1,000 resident basis in 2010. This indicatorrelates to several negative attributes such as

commute times, vehicle emissions, and roadmaintenance costs; therefore, higher levelson this indicator receive lower scores. Thesource for this data is the Texas TransportationInstitutes Annual Urban Mobility Report.


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The Center for Strategic Economic Research (CSER) would like to thank the Board of theSacramento Area Commerce and Trade Organization (SACTO) for supporting the developmentof the 2012 Prosperity Indexand providing feedback on the publication.

OFFICERS: CHAIR: David P. Parkes, Flintco Pacic, Inc.; CHAIR-ELECT: Gary L. Bradus, Weintraub Tobin;TREASURER: Cheryl Dell, The Sacramento Bee; SECRETARY: G. Hardy Acree, Sacramento County AirportSystem; VICE CHAIR MEMBER DEVELOPMENT: Larry R. Booth, Frank M. Booth, Inc.; VICE CHAIR MEMBERRELATIONS: Steve Burnett, GALLINA LLP; IMMEDIATE PAST CHAIR: Ann Madden Rice, UC Davis Medical Center;CHIEF EXECUTIVE OFFICER: Barbara A. Hayes, SACTO

DIRECTORS-AT-LARGE:Doug Adams, RagingWire Enterprise Solutions, Inc.; Tim Albiani, McCarthy BuildingCompanies, Inc.; Debbie Augustine-Nelson, AugustineIdeas; John Boyd, PsyD, MHA, Sutter Center For Psychiatry;Mark Cirksena, DPR Construction; Jack Crawford, Jr., Velocity Venture Capital, LLC; Robert D. Dean, NewmarkGrubb Knight Frank; Steve Dominguez, Bank of the West; Diane Dusseau, Wells Fargo Insurance Services; JonFoad, Rudolph and Sletten, Inc.; Edward S. Glavis, Kaiser Permanente; David M. Higgins, Jr., Swinerton BuildersSacramento; David A. Hutchinson, Buehler & Buehler Structural Engineers, Inc.; James Leet, Boutin Jones Inc.;Christopher J. Obmann, Ernst & Young LLP; Tom Perry-Smith, Crowe Horwath LLP; Scott Rose, Runyon Saltzman& Einhorn, Inc.; Dave Roughton, SAFE Credit Union; Michael Stodden, Representing Five Star Bank; W. DavidTierney, PSG Tax Credits Group, LLC; Charles W. Trainor, Trainor Fairbrook; Dale White, Trane

DESIGNATED DIRECTORS:Mayor Kevin Johnson, City of Sacramento; Supervisor John Knight, County of ElDorado; Supervisor Kirk Uhler, County of Placer; Supervisor Don Nottoli, County of Sacramento; SupervisorDon Saylor, County of Yolo; Jeffrey M. Koewler, Downey Brand Attorneys LLP; Toosje Koll, Resources GlobalProfessionals; Jeanne Reaves, Jeanne Reaves Consulting

EX-OFFICIO DIRECTORS:William H. Duncan, IV, Sierra College; John Frisch, Cornish & Carey CommercialNewmark Knight Frank, Representing Sacramento Metro Chamber; Phil Garcia, California State University,Sacramento; Dr. Douglas B. Houston, Yuba Community College District; Dr. Linda Katehi, University of California,Davis; Steven J. Nichols, Pacic Gas and Electric Company; Narendra Pat M. Pathipati, Teichert, Inc.; Jon

Sharpe, Los Rios Community College District; Rene Taylor, SMUD Board

INDEPENDENT LEGAL COUNSEL:Joe DeAngelis, Downey Brand Attorneys LLP

CSER updates the Prosperity Indexand all related components annually. The Economy element is updated quarterly throughSACTOs Quarterly Economic Reportin order to allow for more frequent evaluations of the regional economy. The 2012Prosperity Indexis the eigth annual release of the Prosperity Index.
http://www.strategiceconomicresearch.org/


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Project Team

Ryan Sharp, Director

Center for Strategic Economic Research

Helen Schaubmayer, Deputy Director

Center for Strategic Economic Research

The Center for Strategic Economic Research (CSER), an economic research and consulting group afliatedwith the Sacramento Area Commerce and Trade Organization (SACTO), provides a full range of objectiveeconomic and demographic research services to businesses, government entities, educational institutions,

and non-prot organizations throughout the country. For more information about CSER or the Prosperity Index,visit www.strategiceconomicresearch.org.

SIGNATURE UNDERWRITER

As a major regional employer, economic driver, health provider and innovation center, UC Davis Health System advances economi

development and quality of life in the Sacramento area.The regions only academic health center is home to a nationally ranked 619-bed acute-care hospital, one of the countrys best medschools, the new Betty Irene Moore School of Nursing, an 1,000-member physicians group and renowned specialty centers such aNational Cancer Institute-designated comprehensive cancer center. Together, they offer area workers and their families highly advancare and promising new therapies for the most complex and acute health conditions.

With a workforce of roughly 10,000, UC Davis Health System is among Sacramentos largest employers. For every employee or doof output directly supported by health system operations, the north states economy gains an additional 1.1 jobs or $1.1 of output,according to a Center for Strategic Economic Research analysis. The health systems combined economic impact throughout NortheCalifornia is more than $3.4 billion and more than 20,000 jobs.

UC Davis works actively through collaboration to expand the areas promising life sciences business sector. One example is UC Danationally prominent stem cell institute, which has received more than $125 million in research and construction grants since 2005,

created new jobs and become a dynamic catalyst for public-private partnerships.

To learn more about how UC Davis Health System is improving lives and transforming health care, visit healthsystem.ucdavis.edu.

2012 Prosperity Index

CSER

400 Capitol Mall, Suite 2500

Sacramento, CA 95814-4436

PHONE: (916) 491-0444

FAX: (916) 441-2312

[email protected]
http://healthsystem.ucdavis.edu/http://healthsystem.ucdavis.edu/http://www.strategiceconomicresearch.org/http://healthsystem.ucdavis.edu/

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