St. Louis earns an overall grade of A+ with a composite score of 73.7th percentile, ranking it among the top metros in the US. The city's economic character is defined by its strong labor demand, with a composite score of 6.69, and its highly affordable cost of living, ranked in the 98th percentile. The labor demand is driven by a 0.98% year-over-year employment growth rate and a 1.019% deviation in weekly hours above its own trend.
Labor Demand
The employment growth rate of 0.98% and weekly hours deviation of 1.019% above trend signal a genuine demand expansion in St. Louis, indicating that the city is adding jobs and workers are putting in more hours. This combination suggests a strong and growing economy. The labor demand composite score of 6.69, ranked in the 82nd percentile, further reinforces this assessment.
Unemployment
The unemployment rate in St. Louis is 3.40%, which is ranked in the 78th percentile, indicating a relatively tight labor market. This means that businesses may face challenges in hiring, as the pool of available workers is smaller, and may need to offer competitive wages to attract talent. The tight market also implies upward pressure on wages.
Wage Growth
The year-over-year wage growth rate in St. Louis is 4.35%, which is ranked in the 62nd percentile, indicating moderate wage growth. This rate suggests that labor costs for employers are rising, but at a manageable pace, and worker purchasing power is increasing. The moderate wage growth also implies a relatively stable labor cost environment.
Cost of Living
St. Louis has a cost of living ranked in the 98th percentile, with a price-to-salary ratio of $163/sqft to $38.21/hr, or 4.27, and a year-over-year decrease in PSF of 1.8%. This makes the city highly affordable relative to its peers, which is a significant advantage for talent attraction, as businesses can offer competitive wages without needing to account for a high cost of living.
Labor Force Growth
The civilian labor force in St. Louis is growing at a rate of -0.09% year-over-year, which is ranked in the 54th percentile, indicating a slightly contracting labor pool. This contraction may pose a structural headwind for hiring, as the supply of available workers is not expanding. However, the slow contraction rate may not significantly impact businesses in the short term.
Building Permits
The number of building permits in St. Louis is increasing by 7.38% year-over-year, which is ranked in the 58th percentile, indicating a moderate expansion of housing supply. This growth suggests that the city is investing in its future housing stock, which will help maintain affordability and accommodate a growing workforce.
Days on Market
The median days on market in St. Louis is 51 days, with a year-over-year increase of 13.3%, which is ranked in the 84th percentile. This indicates a relatively slow market, making it more accessible for workers relocating to the city, as they have more time to find a suitable home. The slow market also suggests a more competitive environment for buyers.
Office Economy
St. Louis has a professional and office worker share ranked in the 38th percentile, with a composite score of 2.40. This indicates a relatively shallow talent pool in these sectors, making the city less suited for businesses that require a deep pool of specialized office workers, such as tech or finance companies. However, the city may be more suitable for industries with less specialized labor requirements.
In conclusion, St. Louis offers businesses a unique combination of strong labor demand, affordable cost of living, and moderate wage growth, making it an attractive location for companies looking to expand or relocate. However, the slightly contracting labor pool and relatively shallow office economy talent pool are risks that decision-makers should consider when evaluating the city as a potential business location.