Category Archives: Economy

Lexington’s Visitor Industries: Part 1

Lexington is an established tourism and retail destination, boasting attractions such as Keeneland, the Kentucky Horse Park, the Kentucky Bourbon Trail, UK Basketball, and the heart of the state’s horse farm industry. Key assets draw visitors year-round, such as:

  • Events and conferences at the Lexington Convention Center, which contains Rupp Arena and the Lexington Opera House
  • National and international events such as Alltech’s Annual International Symposium and the 2015 Breeders’ Cup World Championship.
  • The University of Kentucky and Transylvania University attract sports fans and parents visiting children.
  • Downtown is a recently revitalized cultural hub with attractions such as live music, art galleries, museums, theaters, and outdoor festivals.
  • Quality convention space at the Lexington Convention Center, adjacent to hotels and in a convenient downtown location.
  • Reliable workforce with hospitality experience.
  • Quality retail and commercial space, such as Hamburg, The Summit, and downtown.
  • Area aesthetics of our beautiful natural landscape, scenic horse farms, and hike and bike trails.
  • Lexington’s exceptional health care services draws people from around the state.

Over 46,000 people are employed in Lexington’s Visitor Industries, which includes three types of businesses: retail stores, travel agencies and convention center organizers, and venues for arts, entertainment, and recreation. Salaries range from an average of $43,000 to $18,000. Employment was steady between 40,000 and 41,000 from 2009 through 2012, likely as a result of the recession, but has quickly increased in recent years.

Growing the area’s visitor industries is an important area of economic development. Marketing the region for business or recreation involves many partners, namely VisitLEX, the Lexington Convention and Visitors Center. To help strengthen and grow these industries, Commerce Lexington Inc. and VisitLEX’s teams embarked upon a more formal partnership to develop strategies to recruit associations and business meetings to the area. Our teams meet quarterly to discuss various topics including infrastructure, marketing strategies, client feedback, incentives, and other items, as well as to review our strategic plan.

Check back next week for more about the Visitor Industries!

Lexington’s New Education Rankings

Lexington has again ranked among the most educated communities in the country, according to recently released U.S. Census Bureau data.

Compared to other cities in the United States with at least 300,000 people, Lexington ranks #8 for advanced degrees and #13 for bachelors’s degrees or higher. Nearly 44% of Lexingtonians aged 25 or older hold at least a bachelor’s degrees and 19.2% hold an advanced degree.

The Census Bureau estimates that 34% of degree-holders majored in science and engineering and 11% majored in science and engineering related fields, while 20% majored in business, 11% majored in education, and 24% majored in arts, humanities, and other fields.

Lexington’s number and percentage of degree-holders has increased overall in the past few years. Since 2010, the percentage of people with a bachelor’s degree or higher increased by 3 percentage points and the percentage with an advanced degree increased by 2.6 percentage points. Although the percentages are small, these numbers represent an additional 11,000 advanced degree holders and 17,800 bachelor’s degrees or higher.

An additional 42,000 people are enrolled in college or graduate school, including 64.4% of residents aged 18 to 24, indicating that Lexington will continue to offer a highly educated workforce for all industries.

Manufacturing Day

October 6th is Manufacturing Day, a celebration of modern manufacturing intended to inspire the next generation of manufacturers.

Kentucky’s manufacturing industry totaled $29.2 billion in exports last year. Nearly 2,500 manufacturing facilities employ over 252,000 Kentuckians full-time. Last year, 222 manufacturers invested over $2.2 billion in locations or expansions, creating an additional 7,535 jobs in Kentucky.

So far this year, Commerce Lexington economic development has helped eight existing manufacturing companies expand, adding 79 new jobs and investing $2.5 million, excluding the recent investments by Toyota of $1.33 billion and $121 million. In Lexington, the 2016 average annual wage for manufacturing employees was $76,509, much higher than the state average of $57,050 and the national average of $64,870, according to the U.S. Bureau of Labor Statistics. Manufacturing is the largest contributor to Lexington’s GDP, totaling $5 billion in 2015 (the most recent year for which data is available).

Three major manufacturing companies in the Bluegrass Region are Toyota Motor Manufacturing Kentucky (TMMK), CLARK Material Handling Company, and AVENTICS Corporation.

Photo: Toyota assembly. 

Toyota Motor Manufacturing Kentucky (TMMK) in Georgetown is Toyota’s largest manufacturing plant in the world, producing 550,000 vehicles and 600,000 engines annually at its 1,300-acre campus featuring over 8.1 million square feet of work space. TMMK produces four cylinder and V-6 engines, Camry, Avalon, Camry Hybrid, Avalon Hybrid, and the first U.S.-assembled Lexus.

In April 2017, Toyota announced a $1.33 billion investment in its Georgetown operations to improve equipment and add new technology to increase its manufacturing flexibility and decrease model changeover times. This investment will prepare TMMK to be the first vehicle assembly facility in North America to adopt the Toyota New Global Architecture (TNGA), a global vehicle platform for multiple configurations to create a flexible production environment allowing quick response to demand while preserving Toyota’s values of exceptional quality and safety.

Toyota announced an additional $121 million technology investment in September 2017 to expand TMMK’s facility’s 2.5-liter engine production for the growing demand for hybrid cars.

Photo: Think Kentucky Newsletter

CLARK Material Handling Company is a forklift manufacturer whose global headquarters is located in Lexington with operations worldwide and a global network of 550 dealers worldwide. In 2015, CLARK invested $4.7 million in its Lexington manufacturing facility to reshore production of its ECX (four-wheel electric) and TMK (three-wheel electric) forklift models in Lexington from Mexico. Earlier this year, CLARK celebrated 100 years in Lexington.

Photo: AVENTICS exhibition at Hannover Messe 2016.

AVENTICS is an industrial pneumatic systems manufacturer (i.e., a gas or pressurized air alternative to electric motors, such as in air brakes on vehicles). AVENTICS was originally Bosch’s pneumatics division formerly named Rexroth Pneumatics and is celebrating 53 years in Lexington this October.

TMMK, CLARK Material Handling Company, and AVENTICS represent foreign direct investment (FDI) in the Bluegrass Region from Japan, Korea, and Germany. TMMK is owned by Toyota Motor Corporation of Japan, CLARK Material Handling Company was acquired by Young An Hat Company of Korea in 2003, and AVENTICS was recently purchased by the Germany Company Triton Partners. Foreign-owned companies like TMMK, CLARK, and AVENTICS have helped Lexington and the Bluegrass Region earn recognition for exceptional foreign direct investment and manufacturing such as:

  • #7 Best City for FDI Strategy, Business Facilities (2017)
  • #7 Top Small American City of the Future 2017/2018 for FDI Strategy, fDi Intelligence (2017)
  • #4 Top Mid-Sized Metro for Economic Development, Site Selection Magazine (2017)
  • #6 Top Manufacturing State, Business Facilities (2017)
  • #2 Automotive Manufacturing Strength (Kentucky), Business Facilities (2017)

Click here to read more about manufacturing in the Bluegrass Region.

Lexington’s Unique Equine Industry

The equine industry is a leading sector of Kentucky’s economy, and Lexington is a substantial part of that industry. With 24,000 horses in Lexington’s 283 square miles, Lexington takes up less than 1% of Kentucky’s land but is home to 10% of Kentucky’s horses, according to the most recent Kentucky Equine Survey.

To put Lexington’s equine industry into perspective, consider the location quotient (LQ), which measures an industry’s concentration or share of employment in a region compared to the nation. The LQ can signal a region’s uniqueness and strengths.

  • An LQ of 1 indicates that the region is no different from the national average.
  •  An LQ of greater than 1 indicates a regional strength, and a high LQ indicates uniqueness or a competitive advantage.
  • An LQ of less than 1 indicates a weaker industry, which can sometimes be an opportunity for development.

The industry with the largest LQ in Lexington is horses and other equine production (NAICS 11292 ), at 78.94 (U.S. Bureau of Labor Statistics, 2016). In other words, horses are Lexington’s most unique industry and the share of equine employees in Lexington is 79 times higher than the national share.

Looking at the region, the Lexington MSA has the second highest equine industry LQ in the country at 118.02. Furthermore, 22% of the country’s equine industry employees are in the Lexington MSA.

Kentucky has the largest equine industry LQ compared to all states at 18.16, far outpacing the second-highest state, New Mexico, which has an LQ of 3.64.




Mid-2017 Unemployment Rates

June unemployment rates were recently released and Lexington continues to maintain a healthy economy with low unemployment.

According to data from the Local Area Unemployment Statistics Program and the Kentucky Center for Education and Workforce Statistics, Lexington’s unemployment rate was 4.4% in June 2017, an increase over the same time last year when the unemployment rate was 3.8% in June 2016. Over the past year, Lexington’s unemployment rate has increased, but was generally between three and four percent. Kentucky’s unemployment rate has hovered around a steady 5.0%, with a low of 4.8% in December 2016 and a high of 5.1% in April and June 2017.

The Bluegrass Region’s unemployment rate closely follows Lexington’s unemployment rate, primarily because Lexington’s workforce makes up 51% of the Bluegrass Region’s workforce.

The unemployment rate was lowest in May for each county of the Bluegrass. Lexington’s unemployment rate was consistently the second lowest, behind Woodford County.