Uncovering the Bangor Region’s Competitive Economic Sectors

Bangor Region Development Alliance In cooperation with

Action Committee of 50 and

Eastern Maine Development Corp.

February 5, 2015

What Drives the Regional Economy?

Exports.

BRDA’s role: Recruit Exporters

But Exports Come in Two Flavors

Exports: Sales that bring $$

into the Region

Goods & services sold

outside of Region

Non-residents spending $$ in

the Region

$ $

Also a Service Component of Economy

Service: Sales that re-

circulate or keep $$ in the Region

These businesses prevent $$ from leaking

out of Region

Major Finding #1: Bangor’s Greatest Strengths

EXPORT BUSINESSES

Bring New $$ into the Region

Producing for Sale or Use OUTSIDE of

Region

Selling to Non-Residents

WITHIN the Region

SERVICE BUSINESSES

Re-circulate $$ within the Region

Selling to Non-Residents

WITHIN the Region

SERVICE BUSINESSES

Re-circulate $$ within the Region

How do we know? Specialization Ratios

A Specialization Ratio well >1 implies

• competitive advantage and

• significant net exporting (or little leakage)

Calculated for ~500 business sectors. A bit like an X-Ray of the Economy.

Our Broad Export Sectors with High SRs and Growing Are All in 2nd Category:

• Higher Education

• Health Services

• Comparison Goods Retail Stores

For Example:

SR v Maine/US Growing?

4-Yr Colleges & Universities 3.0/3.2

General & Surgical Hospitals 1.2/1.6

Psychiatric & Subst. Abuse Hospitals 5.0/7.1

Medical & Diagnostic Labs 2.9/3.2

General Merchandise Stores 1.4/1.3

“Other” Motor Vehicle Stores 1.3/2.6

And Moving Up Fast

• Some Arts, Entertainment Sectors

• Travel Accommodations and Food Service

For Example:

Spec Ratio ME/US Growing?

Gambling Industries 4.7/3.5

Promoters – Perf. Arts and Sports 1.1/1.7

Hotels 0.9/1.2

Full Service Restaurants 1.0/1.0

Limited Service Restaurants 1.2/1.0

What About Exports Out of Region?

EXPORT BUSINESSES

Bring New $$ into the Region

Producing for

Sale or Use

OUTSIDE of

Region

Selling to Non-Residents

WITHIN the Region

SERVICE BUSINESSES

Re-circulate $$ within the Region

Producing for Sale OUTSIDE

of Region

Major Finding #2

The Bangor Metro Area does not specialize in broad industrial sectors that produce goods and services for sale out of the region.

E.g, not a Manufacturing Center or a

Professional & Technical Services Center

Specialization & Growth Rates (at the Broadest Level of Industries)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

-40% -20% 0% 20% 40% 60% 80% 100%

Spe

cial

izat

ion

Rat

io

Growth Rate 2005-2013

Health Care & Social Assistance

Retail Trade

Utilities

Accommodation & Food

Ag, Forest, Fish & Hunting

Information

Other Services

Real Estate Construction

Public Administration

Manufacturing

Management of Companies

Arts, Entertainment, & Recreation

Educational Services

Admin Support & Waste Management

Transportation & Warehousing

Wholesale Trade

Professional & Technical Services

Finance & Insurance

3 Broad Categories that Include Exporters of Goods and Services

But Dig Deeper into Sub-Sectors

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

-150.0% -100.0% -50.0% 0.0% 50.0% 100.0% 150.0%

Growth Rate, 2005-13

Spe

cial

izat

ion

Rat

io

A number of these are significant exporters

Major Finding #3 Region hosts a number of sub-sectors with high SRs that produce goods and services for export:

• Several manufacturing sub-sectors • Forestry support activities • Specialty construction trades • Long-distance freight trucking • Elec power generation – esp. renewables • Contract telemarketing & admin. services Some sub-sectors in structural decline, but many are growing

Manufacturing

Spec Ratio ME/US Growing?

Food-related Products

• Frozen Pastries 7.8/48.3

• Frozen Specialty Foods 1.9/9.2

Forest & Wood-related Products

• Pulp Mills 3.7/79.8

• Specialty Wood Products 1.8/16.1

• Wood Cabinet & Countertops 2.1/1.0

Boat Building 1.3/11.4

Turbine Unit Manufacturing 9.4/34.0

Manufacturing, cont’d.

Spec Ratio ME/US Growing?

Plate Work & Fab. Structural Metals 2.2/2.1

• Note related truck body manufacturing

Cement, Concrete, Asphalt Products

• Asphalt Paving Mix & Blocks 5.0/30.1

• Other Concrete Products 2.7/2.8

Motor Vehicle Parts 7.4/0.5

Emerging Manufacturing?

Forest-related Bioproducts (fuel, chemicals)

Sensor Technology Products

Composites-related Products (marine, defense, bridges, boats, etc.)

Water Filtration Technologies

Microbreweries

Forestry, Surveying & Mapping

Spec Ratio ME/US Growing?

Forestry Support Activities 4.2/12.3

Logging 0.9/9.5

Timber Tract Operations 2.8/6.9

Surveying & Mapping Services 3.4/6.7

Construction and Energy Spec Ratio ME/US Growing?

Construction • Structure & Exterior Bldg Contractors 1.2/0.9

• HVAC Contractors 1.1/1.2

• Other Bldg. Equipment Contractors 2.7/3.6

Energy • Biomass Electric Power Generation 4.0/118.7

• Hydropower Generation 1.2/2.4

• Fossil Fuel Elec. Power Generation 1.6/0.4

?

?

Admin. & Support Services

Spec Ratio ME/US Growing?

Telemarketing & Contact Centers 1.1/3.1

Contract Office Admin. Services 2.3/2.8

Key Questions: Can We Trace These Export Sectors Back to Regional Competitive Advantages?

And can we build on these advantages to fill in supply chains, enhance clusters?

In cooperation with EMDC, Action Committee of 50 and others

Competitive Advantages Suggested by These Sectors

Proximity to Northern Forest*

Proximity to Gulf of Maine* Transportation Infrastructure Outdoor Recreational Brand*

Higher Ed Center/Flagship University* Center for Comprehensive Health Care* Heritage of Skilled Artisan Workforce

* High level of confidence

A Few Illustrations of How We Might Connect the Dots:

Spec. & grew 2005-13

Spec. but did not grow 2005-13

Not spec. but growing

Not spec., not growing

Emerging?

Forest

Conserv Areas 6

Wood Prod Mfg 3

Elec Power Gen 4

Out-door

Rec. 6

Forestry3

Pulp & Paper Mfg 4

Boat Bldg 6

Truck Transp

3

Amuse- ment & Rec Ind 3

Advanced structures

Scien-tific R&D

Serv. 4

Ware- hous.

3

Misc Wood Prod

Mfg 6

Hydro-power

6

Bio-mass 6

Log-ging 4

Forestry Support

4

Timber Tract Ops 4

Wood Chem Mfg 6

Higher Ed

Center

Prof, Sci & Tech Serv 3

Survey & Map-ping 6

Forest Bio-products Transp

Hub

Composites

Recreat. Resource

How dense the network? How many connections to dark blue? How many connections to broad sectors (#3 or #4?) How many connections to other competitive advantages?

Higher Ed

Center

Spec. & grew 2005-13

Spec. but did not grow 2005-13

Not spec. but growing

Not spec., not growing

Emerging?

Coll & Univ 4

Jr & Tech

Colleges 4

Tech & Trade

Schools4

Skilled Special Trades

Prof, SciTech Services

2

Forestry Support

4

Forestry 3

Scien- tific R&D

Serv. 4 Start-ups

Ag Support

4

Soft ware

Publish4

Infor-mation

3

Pulp & Paper Mfg 4

Forest

Anim Prod &

Aquacul 3

Cattle Farming

4

Aqua- Culture

4 Gulf of

Me Emerg sectors

Gen Med &

Surg Hosp 4

Health Care

Center

Engin- eering

6

Skilled Artisans

Spec. & grew 2005-13

Spec. but did not grow 2005-13

Not spec. but growing

Not spec., not growing

Emerging?

Arch & Struct Metals

4

Boat Bldg 6

Fndtn &Struct Contr. 4

Bldg Equip

Contr 4

Turbine Mfg. 4

Fab Struct Metals

6

Plate Work 6

Prefab Metal

Bldgs 6

Motor Vehicle Body Mfg 4

Higher Ed

Center

Transp Hub

HVAC Contr 6

Other Bldg

Equip 6

Sheet metal

? Misc. Wood Prod Mfg 6

Industry Roundtables

• BRDA and EMDC will organize roundtables over next 6 months

• And target our recruitment and marketing of the region around the supply chain and cluster analyses that come out of them.

STAY TUNED!

Now to Our Panelists

1. What is driving growth in your business/organization/industry, and

2. What assets in the Bangor Region/Eastern Maine are especially important to your business’s/organization’s success here?