In the past year, workers and business owners at small and medium-sized businesses have continued to navigate the disruptions left in the wake of the COVID-19 pandemic. Amid those disruptions, we have seen new sources of growth in the US economy: new industries driving jobs growth forward and new cities powering that growth.
In this post, we examine the top industries driving SMB growth over the past 12 months, since February 2022 to February 2023 – and dug in to look at the cities driving that growth among a few of the industries.
The Fastest-Growing Industries, February 2022-February 2023
We find that powering the strong labor market over the past year are firms in sectors that have undergone some of the greatest disruptions since the pandemic. Energy companies have seen the most growth over the past year, with firms in Utilties and Mining & Oil subsectors seeing the fastest growth.
Rounding out the top five fastest-growing sectors are firms in Community Services (including Healthcare & Social Assistance and Education), and in Personal Services (particularly Tourism). SMBs in Tourism grew 18%, powered by consumers with years of savings built up who were ready to travel again. Healthcare & Social Assistance (+18%) and Education (+17%) also grew at among the fastest rates. Innovations in Healthcare and in Education during the pandemic, such as tele-health and online educational resources, have driven growth in those sectors, powering the US economy right now.
Table 1: Industries with the Largest Percent Growth in Employment, February 2022-2023
|Industry||Jobs Growth (%)|
|Mining & Oil||34.8%|
|Healthcare & Social Assistance||17.6%|
The South and Sun Belt Dominated in Tourism
Over the past year, we have also seen a clear shift in the geographic landscape of growth – away from traditional coastal hubs and towards smaller cities, particularly those in the South and the Sun Belt region. In Tourism, for instance, we’ve seen 116% employment growth in Phoenix – a more than doubling of employment in that industry.
Table 2: Cities with the Largest Percent Growth in Tourism Employment, February 2022-2023
|Metro Area||Jobs Growth in |
Employment in Tourism (%)
|District of Columbia||26.8%|
A Boom for the Healthcare Industry
Healthcare & Social Assistance is also a sector that has seen tremendous growth in smaller cities, such as Richmond, VA, where growth in that industry has been the fastest at 41% over the past year. We’ve also seen continued growth in traditional hubs of Health Care services in the US, such as Cleveland (+32%) and Pittsburgh (+27%).
Over the past year, the Healthcare & Social Assitance industry has added half a million jobs to the US economy, and over half of the private-sector jobs were added in January 2023.
Gusto data shows that this growth in Health Care is currently taking place in cities with an existing Health Care infrastructure and those making investments in this industry’s future. In Richmond, VA, for instance, employment in healthcare grew by 41% over the past 12 months – this is a city that is not only outpacing the rest of the state in population growth, creating demand for healthcare services but is also reaping the benefits of a $51 billion investment in the area’s health care industry. Other cities that top this list include those with robust health care ecosystems today, including Cleveland (+32%), home of the Mayo Clinic; and Pittsburgh (+27%) and Providence (+27%), cities with strong university medical systems.
Beyond the growth seen right now, the BLS predicts that Health Care & Social Assistance will be one of the fastest-growing sectors in the economy over the next decade, with a 13% increase in jobs forecasted. This fast-growing sector will be a source of growth that cities can tap into today as they look to invest in the future of their local economies.
Table 3: Cities with the Largest Percent Growth in Healthcare Employment, February 2022-2023
|Metro Area||Jobs Growth in Healthcare |
& Social Assistance (%)
Education for the Win
Finally, looking at the cities driving growth in the Education sector, we see a few more large cities with significant growth, such as Baltimore (+57%) and Philadelphia (+36%), likely reflecting the degree of disruption the education systems in those cities suffered as a result of the pandemic, but smaller cities such as Charlotte (+40%), and San Antonio (+27%), have powered growth once again in this industry.
Table 4: Cities with the Largest Percent Growth in Education Employment, February 2022-2023
|Metro Area||Jobs Growth |
in Education (%)
|District of Columbia||26.7%|