Naples has been ranked 18th on a list of the top 25 metro areas in the United States for economic development recently released by Milken Institute.
Provo, Utah, comes in at number one, but six Florida cities, more than any other state, made the top 25. Sarasota ranks highest at 6th, with Orlando coming in at 7th and Tampa showing up at 15th. The Milken Institute has been compiling the rankings every year since 1999 and gives weight to a number of economic factors, including job growth, wage growth, and high-tech GDP, to make its selections.
“Our goal is to help businesses, investors, industry associations, development agencies, government officials, academics, and public-policy groups monitor and evaluate how well their region is adapting to and planning for both current and future economic trends,” said Kevin Klowden, executive director of the Milken Institute’s Center for Regional Economics.
The Naples metro area has appeared in the top 20 of the rankings for the last three years in a row, boasting the third highest job growth number of any metro area between 2015 and 2016. The report praised Naples’ strong tourism and retail sectors, but pointed out that this can be a double-edged sword due to both industries being particularly vulnerable to business cycles and natural disasters. Minoli Ratnatunga, who co-authored the report, said that the small but fast-growing tech sector in Naples may be a way to diversify the economy down the road, but that tourism and retail would continue to be the major drivers for the foreseeable future.
“Tourism and retail and the quality of life are core assets for that region,” said Ratnatunga. “Figuring out how to leverage those to attract people who want to be entrepreneurial but also want to live somewhere they enjoy may be another opportunity to broaden the economy.”
The healthcare industry in Naples is also singled out as a strong economic driver with employers like Arthrex and Naples Community Hospital supplying more than 5,500 jobs to the area.
One challenge the report does see on the horizon for Naples is affordable housing. Its authors note that the median sales price of existing single-family homes in the metropolitan area went up by 83.5 percent from 2011 to 2016, reaching $424,124 in 2016. Apartment rental rates also climbed by more than 10 percent between 2013 and 2016. The median family income over the same time period only increased by 11.6 percent to $70,457 in 2016.
Arthrex Senior Vice-President John Schmieding told the Collier County Commission in December that his company was having to send jobs to states like South Carolina because his employees could not afford to live in the Naples area.
“We simply can’t pretend that our obligation to house individuals is limited to a market focus,” said Schmieding. “As the market drives people in the workforce out of the ability to be housed in the county, companies like Arthrex will be forced to take a piece of the pie somewhere else.”
Ratnatunga said that other metro areas, like San Jose, have seen a net loss of population in 2016 despite strong economic growth due to affordability issues, but Naples’ demographics bring their own set of issues.
“In regions like Naples there is also a concern that people who are retiring to the region are bringing their wealth with them and crowding out local families,” Ratnatunga said.
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