Getting ready for change — Magnet receives sobering and encouraging consultant assessment of Cape County economy

Cape Girardeau Area Magnet, the not-for-profit organization that sees as its mission attracting business and industry to Southeast Missouri, anticipates receiving a strategic plan report during the first week of January from the consulting firm Ernst & Young.

Cape Girardeau Area Magnet interim executive director John Thompson speaks Dec. 6 to the Jackson Board of Aldermen during its study session.Jeff Long ~ jlong@semissoourian.com

Magnet, headed by interim executive director John Thompson, is expected to leverage the report to hire a new leadership team and use its findings to be about the business of, in the words of the organization's website, "accelerating economic momentum and increasing prosperity."

In the meantime, Ernst & Young turned over a document in November for local officials to consider — one holding up a bright light to the region's strengths and weaknesses.

The document, titled "Cape Girardeau Regional Competitive Assessment," among other things, benchmarked Cape Girardeau County against eight other communities in five states "with economic and demographic similarities to Cape Girardeau."

The chosen eight

• Craighead County, Arkansas (Jonesboro)
• Greene County, Missouri (Springfield)
• Jasper County, Missouri (Joplin)
• Madison County, Tennessee (Jackson)
• Putnam County, Tennessee (Cookeville)
• Vandenburgh County, Indiana (Evansville)
• Vigo County, Indiana (Terre Haute)
• Warren County, Kentucky (Bowling Green)

Findings taken directly from the Ernst & Young report are put within quotation marks, unless otherwise noted.

Assessment Results in Seven Areas

• Sluggish employment growth, though optimism prevails

"Today, Cape Girardeau has fewer jobs than it did in 2001. While employment growth in Cape Girardeau was already sluggish, it has further deteriorated during the pandemic. During the past 18 months, for example, Cape Girardeau's relatively modest employment gains were entirely eliminated."

The report said between 2014 and 2019, Cape Girardeau employers added approximately 1,500 workers to their payrolls.

"At 2.8%, this increase was less than half the rate of employment growth nationally during this period."

Magnet's Thompson added his take on the statistics: "The Cape region's job growth was primarily health care and entertainment. Such growth is only sustainable when there is population growth, and some would say job growth is the key to population growth."

• An outlier in a region experiencing widespread population losses

Cape Girardeau County's population has risen approximately 3,800 since 2010, about a 5% increase. During the same period, the U.S. population rose more than 7%.

"Cape Girardeau's performance is relatively impressive when viewed in a regional context. Most communities near the confluence of the Mississippi and Ohio rivers sustained significant population declines."

To wit: Alexander County, Illinois, where Cairo is located, saw its population drop by a third between 2010 and 2020. No other county, Ernst & Young reported, saw a greater population decline, on a proportional basis, than Alexander.

"Regional population declines present a significant risk to Cape Girardeau's economy."

• A locally oriented economy fueled by a handful of industries

"Between 2014 and 2019, healthcare employment in the county rose by more than 1,000 workers. As a result, healthcare alone accounted for more than two-thirds of all jobs created in the county in the five years preceding the pandemic. Entertainment was the only other industry cluster in which employment increased by more than 350 workers. Virtually all of this job growth occurred in restaurants."

• Talent as competitive advantage and driver of economic activity

The Ernst & Young report indicated Cape Girardeau County is No. 2 out of the eight benchmarked areas in terms of post-secondary education.

"More than 34% of Cape Girardeau residents aged 25 and older possess a bachelor's degree or a higher level of educational attainment. This figure exceeds the national average."

Ernst & Young noted that during the late 2000s and early 2010s, rising enrollment at Southeast Missouri State University contributed to employment gains at SEMO — but things have changed dramatically in the past five years.

"Between 2016 and 2021, enrollment at (SEMO) has fallen nearly 25%. As a result, higher education no longer appears to be a significant driver of local employment gains."

The report said more people with a college degree moved out of Cape Girardeau in 2019 "than vice versa. The loss of skilled workers suggests the community lacks the jobs available to absorb much of the talent produced locally."

• An aging community

Ernst & Young said "the decline in Cape Girardeau's young professional (demographic) is of particular concern."

Between 2010 and 2019, the decline in 25- to 44-year-olds in Cape Girardeau County was 5.7%, while in the U.S. as a whole, this demographic gained 6.3% in the decade.

Thompson referred to the decline in what he termed a "key" age group to be "startling."

Ernst & Young, after a survey the consultant group conducted among local residents, yielded the following conclusion: "When asked what should be the county's top economic development priority in the years ahead, 'retaining and attracting young professionals' was the second most frequently given response among survey participants."

The two fastest growing Cape Girardeau County age groups in Ernst & Young's survey were 18- to 24-year-olds (up 11%) and those aged 65 and older (up 20%).

• A hunger for greater economic opportunity

A summary statement from Ernst & Young: "The rapidly aging character of Cape Girardeau, combined with declines in both the community's young professional population and its ability to capture a greater proportion of local college graduates, suggests a general lack of economic opportunity."

A positive note: Cape Girardeau County "boasts the highest level of median household income among all eight examined benchmark regions. The figure, however, is skewed by the relatively high proportion of double-income households." At 31%, double-income homes in Cape Girardeau County far exceed the community at No. 2 — Craighead County, Arkansas, at 24.8%.

Average annual prevailing wages in Cape Girardeau County, approximately $43,000, trailed most of the benchmarked areas in the Ernst & Young report.

• Cherished quality of life

Cape Girardeau County residents surveyed "repeatedly praised the community for (its) high quality of life," with quality education, an affordable cost of living and plentiful recreational offerings cited.

Specific strengths highlighted in the report included the area's college and university system, quality of life and the area's K-12 educational system — with retail and dining options also cited by survey respondents as a strength.

Public safety, Ernst & Young's report said, "was the only frequently cited threat to Cape Girardeau's quality of life."

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