Target Industry Snapshot
In this section, the potential for economic advancement for the City of Plainfield is evaluated by examination of the targeted industries for the area. The methodology for this analysis is the Location Quotients (LQ) tabular and charting technique. In this method, industry employment is plotted for the 2023-2024 period using ESRI data.
Increases in employment are generally considered as the truest indicator of business growth, revenue gains and profitability. The Snapshot illustrates those industries that are present in Plainfield and that have demonstrated growth or are of such legacy value that continuing efforts for sustainability are paramount.
What is an LQ and How is it Used?
Location Quotients (LQ’s) are developed by comparing the local employment concentration by industry against a larger sample, in this case the State of New Jersey. By example, if an industry has a local employment of 150 which might represent 5% of total the local labor market and the same industry for New Jersey has a 7% share of the State’s total, the LQ for this industry is produced through the quotient of 5% divided by 7%, or, an LQ of 0.71.
The goal of the LQ analyses is to identify local industries that are performing at higher levels of employment concentration than their state counterparts, thereby indicating that these industries have a more important role locally than regionally. Locally strong industries are more easily promoted and reinforced by economic development initiatives and help to identify the locality’s unique characteristics. Thus, an industry of LQ greater than 1.0 (parity with State levels) reveals an indication that this industry should be considered as locally relevant.
Due to the impact of Covid-19 and the recovery of temporarily lost jobs, the most recent two years of data collection have been selected for analysis. For statistical reasons, the Snapshot uses a two-year over a five-year period which is the better option for obtaining a clearer picture of normalized employment changes.
From the LQ chart, the following industries are Competitive, ranked by employment:
1. Educational Services (2,220) 2. Public Administration (1,082) 3. Other Services (except Public Administration) (950) 4. Construction (544)
These are dominant industries in Plainfield, and even though they may exhibit a slight job loss in some instances, they are, nevertheless, not in specific of economic development efforts for their advancement. The Competitive industries account for 4,796 jobs. or 41% of the total.
For the Emerging sector, the following are present:
1. Retail Trade (1,173) 2. Real Estate, Rental & Leasing (319) 3. Wholesale Trade (188) 4. Arts, Entertainment & Recreation (99)
As becoming more important to the marketplace, these industries will need some degree of support by economic development. The Emerging industries account for 1,779 jobs. or 16% of the total.
For the At-Risk sector, the following are present:
1. Health Care & Social Assistance (1,918) 2. Transportation & Warehousing (365) 3. Utilities (70)
Considered as legacy industries, this sector will require monitoring of employment performance by economic development to curtail fuhther deterioration. The At-Risk industries account for 2,353 jobs. or 21% of the total.
For the Declining sector, the following are present:
1. Manufacturing (671) 2.Accommodation & Food Services (656) 3. Administrative, Support & Waste Management Services (334) 4. Professional, Scientific & Tech Services (298) 5. Finance & Insurance (132) 6. Information (129) 7. Agriculture, Forestry, Fishing & Hunting (4) 8. Management of Companies & Enterprises (3)
As weakening industries, these are of critical importance that will require significant effort by economic development. The Declining industries account for 2,227 jobs. or 20% of the total.
Resulting from this analysis, a projection of industries that should receive economic development support can be determined. Industries with the above parity of 1.0 LQ in all likelihood do not require intervention, but should be observed for performance going forward. On the other hand, industries below the 1.0 threshold will need support.
In the table below, an estimation of the number of jobs that should be targeted for growth are shown. As expected, these industries fall into either the Emerging or Declining quadrants. In aggregate, the City of Plainfield should focus on creating 1,903 new jobs in 12 industry categories. While this is an important goal, any real progress made in the next few years at reaching or even surpassing the State parity benchmark should be welcomed as a success.
The City should focus on those areas where return would be the highest. Accordingly, the top 5 industry categories which account for 77% of the forecasted new jobs are as follows:
1. Professional, Scientific & Tech Services (32%) 2. Finance & Insurance (14%) 3. Wholesale Trade (14%) 4. Arts, Entertainment & Recreation (9%) 5. Information (8%)
The employment by industry analysis of the City of Plainfield’s Labor Force provides information about the connection of labor to local employment. Source for the data is the US Census American Community Survey (2022). As of 2022, the City of Plainfield has a civilian employed population 16 years and over of 26,528 persons. The chart below illustrates the distribution of employment by industry. The top 5 industries by percentage of labor forces which account for 65% of Plainfield's labor supply are:
1. Educational services, and health care and social assistance (17%) 2. Professional, scientific, and management, and administrative and waste management services (14%) 3. Transportation and warehousing, and utilities (13%) 4. Construction (11%) 5. Manufacturing (11%)
To identify synergies between the labor supply and the targeted indsutries. A “crosswalk” chart is compiled that compares the two elements. By only examining only the 5 leading categories in each group, it is readily apparent that Plainfield needs to encourage more white-collar industries which in turn will result in the need for more office space development:
It should be noted that according to the US Census, 81.7% of Plainfield residents commute to work in areas outside of the City. This figure is significantly higher than that of Union County or the State of New Jersey, whose statistics are 50.3% and 48.0%, respectively. It is estimated that approximately 21,700 residents leave Plainfield for work daily. It must become the goal of economic development to attempt to capture a portion of this out-commuting employment by providing opportunities in the City of Plainfield for business expansion.