Industrial specialization in Jacksonville

Transcription

1 University of North Florida UNF Digital Commons City and Regional Planning Florida George W. Simons, Jr. Publications and Printed Materials Industrial specialization in Jacksonville Research Department, Jacksonville Area Chamber of Commerce Follow this and additional works at: Suggested Citation Research Department, Jacksonville Area Chamber of Commerce, "Industrial specialization in Jacksonville" (1968). City and Regional Planning Florida This Book is brought to you for free and open access by the George W. Simons, Jr. Publications and Printed Materials at UNF Digital Commons. It has been accepted for inclusion in City and Regional Planning Florida by an authorized administrator of UNF Digital Commons. For more information, please contact Digital Projects All Rights Reserved

2 INDUSTRIAL SPECIALIZATION in Jacksonville

3 INDUSTRIAL SPECIALIZATION IN JACKSONVILLE Research Department Jacksonville Area Chamber of Commerce 604 Hogan Street Jacksonville, Florida 32202

4 TABLE OF CONTENTS Page Summary and Conclusions Introduction i i Background. Growth in Employment Components of Growth.. Specialization: Jacksonville Compared to National Economy 6 Government o o o Finance-Insurance-Real Estate Transportation-Communication-Utilities o Contract Construction o o o. o Trade o 0 o o o o o Service 0 Weak Commitment 0 ' 0 Specialization: Jacksonville Compared to Southeast Finance-Insurance-Real Estate Government o o o o o o Transportation-Communication-Utilities 0 Trade Contract Construction Weak Commitment Specialization: Jacksonville Compared to Florida 14 Government o o o o o o o Finance-Insurance-Real Estate o o o o Transportation-Communication-Uti 1 ities o Trade. o o o o o o o ~ 0 Weak Commitment. '

5 LIST OF TABLES Page Table l, Change in Employment by.industry Groups in Duval County, Table 2, Components of Employment Change by Decade, l Table 3, Specialization Ranking, Table 4, Specialization in Duval County as Compared to United States Table 5, Specialization Ranking, Table 6, Specialization in Duval County as Compared to Southeast Table 7, Specialization Rankin9, Table 8, Specialization in ~ Duval County as Compared to Florida

6 SUMMARY AND CONCLUSIONS This report is designed to reveal industrial specialization of the Jacksonville community (Duval county) by comparing its industrial mix with much larger areas, namely Florida, Southeast and United States. Industrial specialization is the structural adaptation of a community's economy to a particular economic activity. The economy of Jacksonville more than doubled in size during the study period, All industries did not grow at the same rate. Interindustry growth was dissimilar in many respects to the structural changes in the economy of the state, Southeast, and nation. Consequently, there were shifts in industrial specialization within the local economy compared to these base economies. Jacksonville greatly diversified its economy during the study period. A high degree of specialization was evident in several industry groups in Many of these are still prominent in the local economy but at a lower degree of specialization. Without qualification, there are four industry groups in which Jacksonville specializes. They are: {1) government, (2) finance-insurancereal estate, (3) transportation-communication-utilities, and (4) trade (wholesale and retail). These are basic industries to the local economy and are a source of economic growth. Jacksonville is very weak in those industry groups usually classified as basic industries. The community has a weak and decreasing commitment to manufacturing as measured in terms of specialization. It has a very weak commitment to agriculture-forestry-fisheries-mining.

7 INTRODUCTION People frequently inquire as to the principal economic activity of the Ja :ksonvi lle economy in the hope of determining industrial specialization. A large number of employees in one industry does not necessarily indicate specialization in that industry. Some industries are naturally larger than others. Each person inquiring about the principal economic activity has a general notion as to the economic structure of his home community and attempts to judge the Jacksonville economy on that basis. His point of reference may be too small to properly evaluate the Jacksonville economy. This report is designed to reveal industrial specialization of the Jacksonville community (Duval County) by comparing its industrial mix with much larger economies. Industrial specialization is the structural adaptation of a community's economy to a particular economic activity. Florida, the Southeast and the United States were selected as base economies upon which to compare and evaluate the Jacksonville economy. States making up the Southeast include: Florida, Georgia, South and North Carolina, Tennessee, Alabama and Mississippi. Specialization was derived by the following procedure. Employment was determined for each industry making up the local economy~ and a percentage distribution was calculated. The percentage distribution among the industries was calculated for each of the base areas (Florida, Southeast and United States) and compared to the Jacksonville economy. For example, manufacturing represents 12 percent of total employment in Duval County, 13 percent in Florida, 24 percent in the Southeast and 26 percent i i

8 i n the United States (figures rounded). It is apparent that Jacksonville has a relatively weak commitment to that industry and, therefore, does not spec ialize in that activity. An index has been developed to measure the degree of specialization or weak commitment. That was determined by dividing the percentage figure for Jacksonville by each of the percentage figures for the three base economies. Manufacturing in Jacksonville compared to Florida in 1960: 12.06/12.52 = Jacksonville compared to Southeast: 12.06/23.64 = Jacksonville compared to United States: 12.06/26.39 = An index of l.00 is a normal commitment compared to a base economy. The hi gher above l.00, the greater the degree of specialization; and conversely, the lower the index is below 1.00, the weaker the commitment. Industrial specialization was derived for three different time periods: 1940, 1950 and Although voluminous statistics are available for more recent years, they are limited in detail and do not permit a realistic computation of specialization for all industries making up the economy of Jacksonville. The next decennial census will make possible an updating of specialization for the total economy. Trends evident during the 20-year period from provide insight as to recent and future structural changes in the Jacksonville economy. iii

9 BACKGROUND There are two broad groups of industries making up the economy of a community. All industries can be classified as either basic or nonbasic. A basic industry produces primarily for nonlocal markets and promotes economic growth by bringing "new'' money into the community. Nonbasic industries are geared to serve the local market and only aid in recirculating the existing money supply. Agriculture, forestry, fisheries, mining and manufacturing are generally recognized as classical examples of basic industries. Other types of industries are also basic when they bring unew" money into the community. A high degree of specialization indicates an industry is basic to the local economy. Growth in Employment The economy of Jacksonville more than doubled ins ize during the study period. Employment stood at 79,400 in 1940 and rose to 176,100 in All industries did not grow at the same rate during the 20-year period. Table l gives employment and grow~h by industry groups for the years 1940, 1950 and A perusal of this table will reveal that the classical, basic industries have not expanded rapidly but some of the nonbasic industries have. Jacksonville's interindustry growth was dissimilar in many respects to the structural changes in the economy of the state, Southeast and nation. Consequently, there were shifts in industrial specialization within the local economy compared to these base economies. Components of Growth The economic base of any community is a prime determinant of its destiny. A technique of measuring growth in terms of three major components has been a developed to evaluate the economic or industrial base of an area. a. See footnote with Table l. It is also

10 Table 1. Chang e in Employment by Industry Groups in ~uval County, Industry Group 1940!_9_5_Q l_960 Percent Increase Agriculture-Forestry-Fishe ries-mining Agriculture Forestry and fisheries Mining 2,061 l ' ' ' ,262 1, l Contract Construction 5,428 10,074 13, N Manufacturing Food and kindred produc t s mfg. Textile mill products mfg. Apparel mfg. Lumber, wood products, furniture mfg. Printing & publishing mfg. Ch~micals and allied products mfg. Electrical and other machinery mfg. Motor vehicles & equipment mfg. Other transportation equipment mfg. Other & miscellaneous mfg. 10,981 2, l, l ' ,861 15,294 2, ,036 l,409 l' l '221 5' '236 3, l,496 2,003 l' 145 l, ,426 8, l Transportation-Communication-Utili t ies Railroads & railway express Trucking & warehousing Other transportation Communication Utilities & sanitary service ll '371 4,593 l '225 3,585 1 ' ,796 6,539 2,002 3,951 2,103 l,201 15,763 4,623 3,023 3,585 2,799 1, Trade Wholesale trade Food & dairy product stores Eating & drinking places Other retail trade 19,203 4,489 3,218 2,820 8,676 30,200 7,252 4,638 4,412 13' ,086 9,005 5,678 4,246 18, Finance, Insurance & Real Estate 3,497 6,051 12, (Cant 1 d)

11 Table l continued... Percent Increase lndustr:t Grou~ ~ ~ Service 22,830 26' , Hotels & other personal services 5,426 6,490 6, Private households 10,074 7,675 8, Business & repair services 1,647 3,063 l+' Entertainment recreation service 753 l, ' l Medical & other professional services 4,930 8,542 15, Government 3, , ' Public administration 3, 171 9,657 11, Armed forces - 5,418 15' Industry Not Reported 833 l '553 9, '038.4 w TOTAL 79, , , Source: U.S. Department of Commerce, Growth Pat_teCI1_? in_employment by_cou l"l_ly, and , volume 5, Southeast.

12 valuable in understanding differential interindustry growth and specialization. The three components are classified as: (1) national growth, (2) industrial mix, and (3) regional share. The first of these is the change that would have occurred at the national rate; the second is change related to a rapid or slow-growth industrial mix or distribution of industries; and the third is change related to any alteration in the regional share by addition of new plants and/or a shift in production to existing plants in one part of the country. Jacksonville has a most favorable and improving distribution of industries and much of its growth is related to the industrial mix. For every person employed in slow-growth industries, there are two workers (2.0) in rapid-growth industries. Ratios of fast-growth to slow-growth industries for the three base economies used in this study are: 1.5 for Florida, 1.2 for Southeast, and 1.7 for nation. Almost half of Jacksonville 1 s employment increase during the 20-year period is attributable to a favor~ble industrial mix. Florida has a weak industrial mix. regional share. At least two-thirds of its rapid growth is related to an increasing The Southeast has an extremely weak industrial mix and about one-third of its growth is tied to the regional share component (see Table 2). With these differential inter-component changes among the areas, it is reasonable to expect that industrial specialization for Jacksonville changed during the study period as compared to each base economy. There were, in fact, substantial changes in industrial specialization during the 20-year period, as the rest of the study indicates. 4

13 Table 2. Components of Employment Change by Decade, Area National Growth (ooo) Industrial Mix (000) Regional Share (000) Total Change (000) Duval County % of Total Change Florida % of Total Change ' Southeast l, , ' ' % of Total Change 2, ' , , Source: U.S. Department of Commerce, Growth Patterns in Employment by County, and , volume 5, Southeast. 5

14 SPECIALIZATION: JACKSONVILLE COMPARED TO NATIONAL ECONOMY In 1940, Jacksonville specialized to a great degree in the following industry groups in the order listed: (1) transportation-communicationuti 1 i ties, (2) service, (3) contract construction, (4) trade, and (5) financeinsurance and real estate. These industry groups still are prominent in the local economy but others have been added to the specialization list and the order of importance has changed, as can be seen in Table 3. Table 3. Specialization Ranking, 1960 Rank Industry Group Government Finance-Insurance and Real Estate Transportation-Communication-Uti 1 ities Contract Construction Trade Service Index l Government This was not an unusually important industry group in It now has the highest specialization index. The opening of three large naval bases and several state and federal offices have made this the most important industry group in the local economy. It is now a basic industry group and has the potential of becoming more important to the local economy because of the rapidgrowth nature of government. 6

15 Finance-Insurance-Real Estate Even in 1940, this was an important part of the local economy and it has become a more vital segment since that time, primaril y because of numerous insurance companies locating and expanding their home and regional offices in Jacksonville. 7ransportation-Communication-Utilities At the time of the 1940 census, this was the most important industry group i n the local economy. Every industry making up the group has decreased in impor ~ ance as measured in terms of specialization {see Tabl e 4). All industries in the group related to transportation and communication sti 11 represent a substantial part of the Jacksonville economy. Contract Construction In view of the fact that the community is growing faster than the nation, it is reasonable that contract construction comprises a relatively large portion of the total economy in Jacksonville; but its significance is being diminishcd as the community expands and broadens its industrial base. Trade Since Jacksonville has a large port and is the largest urban area in northeast Florida and southeast Georgia,' it is not surprising that the city tends to specialize in both wholesale and retail trade. Jacksonville 1 s prominence as a trade center has diminished since 1940 as is evident from the lower specialization indexes in 1950 and 1960 {see Table 4). Service This was the second most important industry group in the local economy in 1940; and twenty years later, it ranked 6th in importance. Those industries 7

16 Table 4. Specialization in Duval County as Co~pared to United States Industry Groups and Industries Agriculture-Forestry-Fisheries-Mining Agriculture Forestry and fisheries Mining Contract Construction Manufacturing Food & kindred products mfg. Textile mi 11 products mfg. Apparel mfg. Lumber, wood products, furniture mfg. Printing & publishing mfg. Chemicals and allied products mfg. Electrical & other machinery mfg. Motor vehicles & equipment mfg. Other transportation equipment mfg. Other & miscellaneous mfg o Transportation-Communication-Utilities Railroads & railway express Trucking & warehousing Other transportation Communication Utilities & sanitary service l Trade Wholesale trade Food & dairy product stores Eating & drinking places Other retai 1 trade l Finance, Insurance & Real Estate Service Hotels & other personal services Private households Business & repair services Entertainment, recreation service Medical & other professional services l Government Public administration Armed forces Industry Not Reported Dashes (---) indicate decreasing relative importance, and periods (.. ) indicate increasing relative importance. 8

17 classified as hotels and other personal services and private households still have a high degree of specialization. Business and repair services and entertainment and recreation services are increasing in importance. Jacksonville not only has a small commitment to medical and other professional services, it is not expanding this industry in keeping with growth of the total economy and national trends. Weak Commitment Jacksonville has a weak commitment to those industries usually classified as basic. The city would have to double employment in manufacturing to attain a normal level for this industry group as compared to the nation. All manufacturing industries have low specialization indexes and most of these indexes are decreasing. Although the industry group agriculture-forestry-fisheriesmining is increasing in importance, it represents a very small portion of the total economy. 9

18 SPECIALIZATION: JACKSONVILLE COMPARED TO SOUTHEAST The Southeast has a different industrial mix than the nation. By compa ring the industrial mix in Jacksonville to the Southeast, it is readily apparent how the city 1 s economy differs from the seven-state region it endeavors to serve. At the beginning of the study period, Jacksonville had a high commitment to the following industry groups compared to the Southeast: {1) transportationcommunication-utilities, {2) finance-insurance-real estate, (3) trade, (4) contrac t construction, {5) service, and {6) government. Differential interindustry growth rates for Jacksonville and the Southeast between 1940 and 1960 have resulted in a different specialization ranking for the local economy, as can be seen in Table 5. Table 5. Specialization Ranking, 1960 Rank Industry Group Finance-Insurance and Real Estate Government Transportation-Communication-Uti 1 ities Trade Contract Construction Index Finance-Insurance-Real Estate It is apparent from the high specialization index that Jacksonville is one of the Southeast 1 s leading communities in finance-insurance-real estate. This was the case even in 1940 at which time this industry group ranked second. 10

19 Government This industry group expanded more rapidly locally than in the Southeast during the study period. Jacksonville is now a prominent center of government in the Southeast, both in terms of public administration and armed forces {see Table 6). Transportation-Communication-Uti 1 ities Although the specialization indexes for the industries making up this group are decreasing, those industries related to transportation and communication are sti 11 very important segments of the local economy and indicate that Jacksonville is both a major transportation and communication center in the Southeast. Trade The degree of specialization is being reduced for all industries making up this group. Jacksonville is more of a wholesale than a retai 1 center in the Southeast but the importance of retai 1 ing is substantial. Contract Construction Since Jacksonville is growing at a faster rate than the Southeast, it is obvious that the city should have a relatively large number of people employed in this industry group as is in fact indicated by the specialization index. The sharp drop in the index over the 20-year perioc is more rel~ted in the construction industry in large urban areas than a change i~ to chang~~ the relative growth rates for Jacksonville and the Southeast. In recent years, the construction industry in large cities has relied more and more on supporting industries to complement their operations. Some of these supporting industries include cement mixing firms and shops to cut 1 1

20 Table 6. Specialization in Duval County as Compared to Southeast Industry Groups and Industries Agriculture-Forestry-Fisheries-Mining Agriculture Forestry and fisheries Mining o Contract Construction Manufacturing Food & kindred products mfg. Textile mill products mfg. Apparel mfg. Lumber, wood products, furniture mfg. Printing & publishing mfg. Chemicals and allied products mfg. Electrical & other machinery mfg. Motor vehicles & equipment mfg. Other transportation equipment mfg. Other & miscellaneous mfg Transportation-Communication-Utilities Railroads & railway express Trucking & warehousing Other transportation Communication Utilities & sanitary service Trade Wholesale trade Food & dairy product stores Eating & drinking places Other retail trade l 1 Finance, Insurance & Real Estate Service Hotels & other personal services Private households Business & repair services Entertainment, recreation service Medical & other professional services Government Public administration Armed forces Industry Not Reported o Dashes (---) indicate decreasing relative importance, and periods (... ) indicate increasing relative importance. 12

21 and fabricate much of the building materials before moving to the construction site. These industries are often classified under manufacturing and are not usually found in rural or slow-growth communities. Weak Commitment Jacksonville has a weak commitment to service and manufacturing and is very weak in agriculture-forestry-fisheries-mining. There are, however, two industries within the manufacturing group in which Jacksonville tends to specialize compared to the Southeast. These include: (1) 11 other transportation equipment" or ship building and (2) printing and publishing. Specialization indexes for each of these two industries are declining. Service industries in which specialization i ~ evident include: (1) hotels and other personal services, (2) business and repair services., and (3) entertainment-recreation services. 13

22 SPECIALIZATION: JACKSONVILLE COMPARED TO FLORIDA Florida has an industrial mix which is different from both the Southeast and United States. The specialization indexes presented below reveal the similarities and dissimilarities between the economy of Jacksonville and Florida. In 1940, Jacksonville specialized in the following industry groups in the order presented: {1) transportation-communication-utilities, {2) financeinsurance-real estate, (3) trade, (4) manufacturing, (5) service)and {6) contract construction. Some of these industry groups have lost their prominence. An inconspicuous industry group in 1940 has become dominant, as can be seen in Table 7. Table 7. Specialization Ranking, 1960 Rank lhdustry Group Government Finance-Insurance and Real Estate Transportation-Communication-Utilities Trade Index Government Compared to the state of Florida, Jacksonville has a strong commitment to government and that industry group is increasing in importance. Although Jacksonville is not the capital of Florida, the state and regional offices located here have made public administration an important industry in the city. Finance-Insurance-Real Estate In view of the fact that the state of Florida is growing at a faster rate 14

23 than Jacksonville, it is not surprising that real estate is a less important industry in Jacksonville than Florida. The community is headquarters for three of the state's larges t and oldest banking groups. It has a heavy commitment to this indust ry as is evident from the specialization index of l.36. Almost one-fourth of all insurance workers in the state are found in Jacksonville. It obviously is the state's principal insurance center with a specialization index of Transportation-Communication-Uti] ities Jacksonville is increasing its prominence as a railroad and railway express center; but al 1 other industries in this group are decreasing in importance. Trucking and warehousing and communication are still important segments of the local economy. Trade Wholesale trade is a large and expanding segment of Jacksonville' s economy. The specialization indexes for retail trade are decreasing and the city has a small commitment to all retail industries except food and dairy product stores. Department and specialty stores are included in the 11 other retai 1 trade" category which has a low and rapidly declining specialization index. Weak Commitment Jacksonville has a re la t ively small number of workers in manufacturing ': ompared to Florida because the state is expanding this industry at a f a ter rate than the city (see Table 8). Since the state is growing at a faster rate and since tourist activity is concent rated in south Florida, Jacksonville has a weak commitment to both contract construction and service industries. The local economy has a very weak commitment to agriculture-forestry-fisheries - mining. 15

24 Table 8. Specialization in Duval County as Compared to Florida Industry Groups and Industries Agriculture-Forestry-Fisheries-Mining Agriculture Forestry and fisheries Mining 0. l ll o Contract Construction Manufacturing Food & kindred products mfg. Textile mill products mfg. Apparel mfg. Lumber, wood products, furniture mfg. Printing & publishing mfg. Chemicals and allied products mfg. Electrical & other machinery mfg. Motor vehicles & equipment mfg. Other transportation equipment mfg. Other & miscellaneous mfg. l. 18 l. 21 l. 50 l l l l. 76 l l. 13 l l l.04 l l.10 Transportation-Communication-Utilities Railroads & railway express Trucking & warehousing Other transportation Communication Utilities & sanitary service l l l. 96 l. 31 l l l Trade Wholesale trade Food & dairy product stores Eating & drinking places Other retail trade l. l 9 l l. 06 l. 20 l. 07 l. 27 l. l l. 08 l.ol l. 39 l Finance, Insurance & Real Estate l.40 Service Hotels & other personal services Private households Business & repair services Entertainment, recreation service Medical & other professional services l. 18 l Government Public administration Armed forces 0.96 l. 19 l l Industry Not Reported l. 06 Dashes (---) indicate decreasing relative importance, and periods {.. ) indicate increasing relative importance. 16

25 'I',I I 'I "' I 'I -:.,..... i _... ":. I... I I" 1 L'' 1'- ' I'.I. I,.. "' I - Published by Research Department Jacksonville Area Chamber of Commerce DECEMBER, 1968