Growth and Distribution of Producer Services: Metro/Nonmetro Differences

Abstract

Producer services (i.e., services generally used more by businesses than by individual consumers) are increasingly important for the efficient production and distribution of products derived from natural resources and manufacturing. However, these services tend to be concentrated in large metro areas, and research has generally neglected nonmetro areas and whether difference between areas is growing or decreasing. Using data from County Business Patterns, this research considers whether the distribution of producer services changed among three types of areas: a) the dominant metro area, b) other metro and c) nonmetro areas in Washington State between 1979 and 1986. Particular attention is given to the recessionary period of the early 1980s. Although each of the three types of areas saw a shift in employment into these services, the total state share of producer services became more concentrated in the dominant metro area during this time. The recession exacerbated this concentration, and there was no evidence of dispersion of these services in the post-recession period. These findings indicate that businesses in nonmetro and in some small metro areas may be at an increasing disadvantage in accessing the expertise needed to perform effectively in advanced industrial societies.