Data was collected in areas of demographics, business size, and industry composition for the 30 cities and towns on the North Shore including: Amesbury, Beverly, Boxford, Danvers, Essex, Georgetown, Gloucester, Groveland, Hamilton, Ipswich, Lynn, Lynnfield, Manchester by the Sea, Marblehead, Middleton, Nahant, Newbury, Newburyport, Peabody, Revere, Rockport, Rowley, Salem, Salisbury, Saugus, Swampscott, Topsfield, Wenham, West Newbury, and Winthrop.
This report contains data in four areas for each of the 30 cities and towns above:
The research detailed in this report reveals the following about the North Shore Region and its 30 communities:
- Small businesses dominate the North Shore Region and all of its 30 communities, with at least 84% of businesses relying on fewer than 20 employees, and 37% of all businesses having 4 or fewer employees.
- There has been considerable growth and some decline in industry sectors:
- Since 2012, jobs grew by 19,831 across the North Shore Region.
- The North Shore Region has a diverse economy with many sectors contributing to its overall health. Overall employment is distributed more evenly between industry clusters compared to a typical Massachusetts county.
- Health Care and Social Assistance, Construction, and Accommodation and Food Services have seen the most growth in terms of number of jobs. Similarly, the sectors employing the most people are in Health Care and Social Assistance, Government, and Retail Trade. .
- Manufacturing, Real Estate, Wholesale Trade, Management of Companies, and Agriculture and Fishing have declined.
- Average earnings per job are $75.400, which is $13.300 above the national average earnings per job.
- The North Shore Region’s population has grown by 15,665 over the last 5 years (2012-2017) and is projected to increase slightly. However, two thirds of the North Shore towns will actual see a small decrease in population over the same period.
One important finding of this study is that we are seeing a paradigm shift in the reporting and categorization of industries, businesses and employees/ jobs, which in turn impacts the numbers we use for comparisons. As technology advances and consumer demands evolve, new industries, production and products have emerged. Along with this evolution we have seen a change in how data is categorized. For example, a traditional industry, such as manufacturing, has seen growth in the specific types of manufacturing categories that are offered, but these are unable to capture the depth of the changes. Interviews with business owners have shed light into this area, where certain aspects of the work may be contracted out and thus possibly falling under a service category (such as business services or consulting) while other functions within the industry are more akin to engineering or R&D.
As such, some industries might appear to be in decline (such as manufacturing), but in reality, it may be a shift in the production processes, nature, or focus of a business, so those numbers would actually be reflected as growth in a different category. We also found that in some cases, contingent labor does not show up in employee counts, thereby negatively skewing the numbers.
Furthermore, companies may show a decline in employment due to the difficulty of finding the right talent to fill the jobs, (for example in the manufacturing sector there are not enough available machinists so companies don’t fill jobs) and thereby show a reduction in force. The added workload might, in these cases, be handled through overtime payments to their existing machinists.
We found that the local workforce system is experiencing severe pressure from companies to fill job openings (such as machinists in the manufacturing sector), and this type of in-person, real-time data does not show up in the traditional labor market data sources.
Thus, it is imperative that we consider how jobs and industries may be changing, and understand that our perception of traditional industry sectors may preclude our ability to understand today’s business composition by merely looking at changes in numbers. For this report, the number of employees per business was the intended focus. The supporting data is provided for context.
A region with high diversity can signal economic stability and can more easily withstand economic pressures, while a region with low diversity can signal economic instability. This report confirms that the North Shore is a region with diverse economic sectors. The North Shore’s overall employment is distributed more evenly between the industry clusters, as compared to a typical Massachusetts region. The diversity of the North Shore Region contributes significantly to its overall stability, health and competitive advantage.
Although there are many commonalities, there are also differences in trends, growth patterns, and declines that justify the need to look not only at the aggregate of the North Shore, but also at the uniqueness of each community in the region.
The Alliance will use and share the information in this report as it continues to promote economic sustainability and growth, through programming and partnerships with local communities and their municipal leaders, strategic partners, businesses and partners in state and federal government. It is clear from data in this report that our efforts should continue to focus on helping businesses start, grow and stay on the North Shore to maintain our regional competitive advantages.
Small Businesses Dominate the North Shore
There are 25,206 businesses located on the North Shore. The patterns of business are fairly constant among all 30 cities and towns, with the largest type of business, by far, being small businesses with fewer than 5 employees. In every city and town, this is the largest percentage, averaging 37% of all business types. In each city and town, the same pattern is repeated with the largest number of businesses having 1-4 employees, followed by the 5-9 employee group. The numbers of businesses get smaller as the employee size grows.
Figure 1. Businesses by Number of Employees
Figure 2. Businesses by Number of Employees
Figure 2. Size of Business by City and Town
When taken as a percentage of the whole industry, it is apparent each community across the North Shore has a substantial number of small businesses with few employees. In fact, every community has at least 82% of their businesses relying on fewer than 20 employees, with 33% of all businesses having 4 or fewer employees. A closer look at the business composition for each of the 30 communities can be found in the Appendices.