Ames sees strong job market growth in 2013

Varad Diwate

A new analysis shows strong job growth in Ames in the last few years. The growth is expected to attract new graduates and provide opportunities for those interested in entrepreneurship.

The analysis, titled “Ames Economic Outlook,” was done by Peter Orazem, university professor of economics and Ames City Council at-large representative. The analysis notes that Ames added 1,800 jobs, a 3.6 percent increase, to its existing base from October 2012 to October 2013.

Total employment stood at 51,600. The study also notes that the employment growth is three times the growth in the Des Moines area and seven times the state employment growth.

The analysis was based on monthly employment numbers provided by the Iowa Workforce Development. It takes into account firm payments and unemployment insurance. This makes the report reasonably accurate, Orazem said.

“Midwest college towns have been successful labor markets for the last 10 to 15 years. Ames was relatively slow to start growing,” Orazem said. “The old Big 12 towns were growing faster than Ames which suggests there was pent-up potential here that we were not taking advantage of.” 

He added that the recession had an effect as 1,200 private sector jobs were lost during this period. Iowa State added new jobs during this period with the help of federal stimulus money.

The key growth areas have been sectors such as information technology with expansion of Kingland Systems and WebFilings. Orazem said the retail sector also saw a boost with the revitalized North Grand Mall.

“I think Ames would rank quite highly when it comes to having a workforce in place. We have the distinct advantage of having several thousand students leave Iowa State for their first career opportunity,” said Dan Culhane, president of the Ames Chamber of Commerce. “That’s a tremendous advantage we have over a lot of other communities.”

A combination of different factors makes Ames a place for growing job opportunities, Culhane said. One of them is the record enrollment at Iowa State which translates to more jobs to support the student population.

Orazem related his experience as a city council representative when economic growth was stagnant.

“We [new representatives] were annoyed at how little the city was accomplishing. It seemed that the city was more interested in trying to actively discourage investment. Having a city that doesn’t create jobs is not something you want,“ Orazem said. “We had gone from 6 percent of our local population working in Polk County to almost 20 percent within 20 years.”

Decisions by the City Council to encourage businesses have played a part in this growth, Orazem said.

He added diversification of the economy with more private sector jobs is a key issue. Conditions have also improved for starting businesses in the city and is an option for students interested in entrepreneurship.

There is still room to improve the business climate in the city. Orazem identified some of these issues.

Ames currently does not have a site above 10 acres for an industrial project even though it fares well in access to electricity and water. Expansion outside city limits is constrained as the surrounding land is owned by Xenia Rural Water District.

Another task is the expansion of Iowa State Center, to attract more visitors and host bigger events.

Flooding is also a perennial issue which causes damage to property in the city.

Culhane said base sectors such as manufacturing and information technology will sustain the service sector in the near future. The city is looking to attract companies from diverse sectors.

“We are going to focus continuing on information technology, plants and animal health,” Culhane said. “We think those are strong sectors in Ames for the immense infrastructure and expertise that resides here and relates to those industries.”