Industry Employment Share Analysis: Sector Dominance by State (2023)

What if you could discover that healthcare employs 18% of workers in some states while manufacturing employs 25% in others? This Industry Employment Share Analysis reveals exactly which industries dominate employment in each state—and how you can identify states where your industry has the strongest presence and support infrastructure.

The data shows dramatic differences: some states are dominated by a single industry (energy, agriculture, technology), while others have diverse industry mixes. Understanding these patterns helps you identify industry-friendly states, find talent pools, and make strategic location decisions.

Key Takeaways

• Industry Dominance Varies Dramatically by State—Some states have 20-30% of employment in a single industry, while others have more balanced distributions, showing massive regional specialization

• Industry Clusters Create Talent Pools—States where your industry employs 15%+ of workers typically have larger talent pools, better infrastructure, and stronger industry networks

• Diverse vs. Specialized States—Diverse states offer more stability, while specialized states offer deeper industry expertise and support

• Geographic Patterns Reveal Opportunities—Industry employment shares reveal where to find talent, suppliers, customers, and industry support

• State Economic Structure Impacts Business—Understanding which industries dominate helps you assess market size, competition, and business environment

Explore which industries dominate employment in each state to understand regional economic structure. This tool reveals industry employment patterns that inform location

This Industry Employment Share Analysis uses official Bureau of Labor Statistics (BLS) Current Employment Statistics (CES) data to show which industries dominate employment in each state. The analysis calculates employment share (percentage of total employment) by industry for each state, revealing regional economic structure and industry concentration.

What You’ll Discover:

• Employment share by industry for each state (what percentage of workers are in each industry)
• States where specific industries dominate employment (15%+ share)
• Industry clusters and geographic concentration patterns
• Diverse vs. specialized state economies
• States where your industry has strongest presence

Why This Matters: Understanding industry employment shares helps you identify states where your industry has strong presence, large talent pools, and supportive infrastructure. This informs location decisions, talent acquisition, and market entry strategies.

Industry Employment Share Reveals Talent Pool Size

The Numbers: A state where your industry employs 20% of workers has 5x more potential employees than a state where it employs 4%. If a state has 10 million total workers, a 20% share means 2 million workers in that industry vs. 400,000 at 4% share.

So What? Industry employment share directly indicates talent pool size. States with higher shares offer larger talent pools, making hiring easier and potentially more cost-effective.

How to Use This:

• For hiring strategy: Target states where your industry employs 15%+ of workers for larger talent pools
• For location decisions: Choose states with high industry employment shares for better talent access
• For market research: Use employment shares to estimate market size and competition

Specialized States Offer Deep Industry Expertise

The Numbers: States where a single industry employs 20%+ of workers have deep industry expertise, established infrastructure, and strong industry networks.

So What? Specialized states offer advantages: larger talent pools, better infrastructure, stronger networks, and industry-specific support. However, they may be less stable if that industry declines.

How to Use This:

• For industry-focused businesses: Specialized states offer best infrastructure and talent
• For risk management: Consider diversification—specialized states face higher risk if industry declines
• For networking: Specialized states have stronger industry communities and networks

Diverse States Offer Stability and Balance

The Numbers: States with no single industry above 15% share have more balanced, diverse economies with multiple significant industries.

So What? Diverse states offer stability—if one industry declines, others can offset. However, they may have less deep expertise in any single industry.

How to Use This:

• For risk-averse businesses: Diverse states offer more economic stability
• For industry-specific needs: Diverse states may have smaller talent pools for your specific industry
• For long-term planning: Diverse states may offer more stable long-term prospects

Geographic Patterns Create Regional Opportunities

The Numbers: Industry employment shares show geographic clustering—similar industries cluster in regions, creating regional industry ecosystems.

So What? Understanding regional patterns helps you identify industry clusters, talent hubs, and supportive ecosystems. Regional proximity matters for networking and supply chains.

How to Use This:

• For location strategy: Consider regional industry clusters, not just individual states
• For networking: Regional clusters offer better networking opportunities
• For supply chains: Regional clusters may offer better supplier and customer access

Red Flags

• Over-Specialization: States where one industry employs 30%+ of workers face high risk if that industry declines
• Declining Industry Shares: If your industry’s employment share is declining, it may signal industry challenges in that state
• Very Low Shares: States where your industry employs <3% of workers may have limited talent pools and infrastructure

Green Lights

• Strong Industry Presence (15%+): States where your industry employs 15%+ of workers offer good talent pools and infrastructure
• Stable or Growing Shares: States where your industry’s share is stable or growing indicate healthy industry presence
• Regional Clusters: States in regions with strong industry clusters offer better networking and ecosystem support

How to Use This Industry Employment Share Analysis

Follow this step-by-step process to identify industry-friendly states and make location decisions:

Step 1: Identify Your Industry

Determine which industry you’re in or targeting. Use NAICS codes to identify your specific industry category.

Action:

• Identify your primary industry and NAICS code
• Consider if you serve multiple industries (use primary industry)
• Note any industry sub-sectors that are relevant

Step 2: Look Up Employment Shares by State

Use BLS CES data to find employment share for your industry in each state. Calculate: (Industry Employment / Total Employment) × 100.

Action:

• Fetch BLS CES data for your industry by state
• Calculate employment share for each state
• Identify states where your industry employs 15%+ of workers (strong presence)
• Note states with 5-10% share (moderate presence) vs. <5% (weak presence)

Step 3: Assess State Economic Structure

Determine if candidate states are specialized (one industry dominates) or diverse (multiple industries share employment).

Action:

• Calculate employment shares for all major industries in candidate states
• Identify if states are specialized (20%+ in one industry) or diverse (no industry above 15%)
• Assess stability vs. specialization trade-offs

Step 4: Evaluate Talent Pool Size

Estimate talent pool size based on employment shares. Higher shares mean larger talent pools.

Action:

• For states with 15%+ share: Large talent pool—easier hiring, potentially lower costs
• For states with 5-10% share: Moderate talent pool—adequate but not abundant
• For states with <5% share: Small talent pool—may face hiring challenges

Step 5: Make Location Decision

Combine employment share data with other factors (markets, costs, quality of life) to choose your location.

Action:

• Prioritize states where your industry employs 15%+ of workers for talent access
• Consider specialized vs. diverse states based on your risk tolerance
• Factor in other location considerations (markets, costs, regulations)
• Make final location decision balancing all factors

Common Use Cases

Use Case 1: Finding Industry-Friendly States → Identify your industry → Look up employment shares by state → Target states with 15%+ share → Access larger talent pools and infrastructure → Build business in supportive environment

Use Case 2: Talent Acquisition Strategy → Check employment shares for your industry → Identify states with largest talent pools (highest shares) → Focus hiring efforts in high-share states → Access more candidates and potentially lower costs

Use Case 3: Market Entry Planning → Research industry employment shares in target states → Assess market size based on employment levels → Understand competition intensity → Plan market entry strategy

Use Case 4: Location Risk Assessment → Check if target states are specialized or diverse → Assess economic stability based on diversification → Factor industry concentration into risk assessment → Make location decisions with risk awareness

Questions to Ask Yourself

• What’s my primary industry? (Identify for employment share analysis)
• Which states have highest employment shares for my industry? (15%+ indicates strong presence)
• Are my target states specialized or diverse? (Assess stability vs. expertise trade-off)
• What’s the talent pool size in candidate states? (Higher shares = larger pools)
• Do I need industry specialization or economic diversity? (Risk tolerance decision)
• Are there regional industry clusters I should consider? (Regional vs. state analysis)
• How does employment share affect my location decision? (Factor into overall strategy)

Action Items Checklist

• Identify your primary industry and NAICS code
• Fetch BLS CES data for your industry by state
• Calculate employment share for each state: (Industry Employment / Total Employment) × 100
• Identify states where your industry employs 15%+ of workers (strong presence)
• Assess if states are specialized (20%+ in one industry) or diverse (balanced)
• Estimate talent pool sizes based on employment shares
• Compare specialized vs. diverse states for your risk tolerance
• Factor employment shares into location decision
• Consider regional industry clusters, not just individual states
• Make final location decision balancing employment shares with other factors

Industry-Specific Recommendations

For Technology Companies:

• Target states where information and professional services employ 15%+ of workers
• Tech hubs (California, Washington, Massachusetts) have high tech employment shares
• Consider remote work to access talent in high-share states while operating elsewhere
• High-share states offer larger talent pools and better tech infrastructure

For Healthcare Businesses:

• Target states where healthcare employs 15%+ of workers (often states with aging populations)
• Healthcare-dominant states have larger talent pools and established healthcare ecosystems
• Consider both specialized healthcare states and diverse states with strong healthcare presence
• Factor in population demographics—aging states have higher healthcare shares

For Manufacturing Companies:

• Target states where manufacturing employs 10-15%+ of workers (Midwest, South)
• Manufacturing-dominant states have established infrastructure and skilled workforce
• Consider supply chain proximity—manufacturing clusters matter for suppliers
• Factor in automation trends—manufacturing employment shares may decline over time

For Professional Services:

• Target states where professional services employ 15%+ of workers (major metros)
• Professional services cluster in urban areas and business centers
• Consider both specialized professional services states and diverse states with strong presence
• High-share states offer better networking and client access

For Retail and Consumer Services:

• Retail employment shares are more evenly distributed (most states 8-12%)
• Focus on population and income rather than employment share for retail
• Consumer services follow population patterns more than industry specialization
• Consider market size (population × income) more than employment share

Common Mistakes to Avoid

Mistake 1: Ignoring Employment Share When It Matters For industries where talent is critical (tech, healthcare, professional services), employment share directly indicates talent pool size. Don’t ignore this when making location decisions.

Mistake 2: Over-Prioritizing Specialized States Specialized states offer expertise but may be less stable. Don’t choose specialization at the expense of all other factors—balance is important.

Mistake 3: Not Considering Regional Clusters Industry employment shares show state patterns, but regional clusters matter too. Consider regional proximity, not just individual state shares.

Mistake 4: Ignoring Share Trends Employment shares change over time. A state with declining share may indicate industry challenges. Check trends, not just current shares.

Mistake 5: Not Factoring in Total Employment A 10% share in a large state (California, 18M workers) means 1.8M workers, while 10% in a small state (Wyoming, 300K workers) means 30K workers. Consider both share and total employment.

Optimization Strategies

For Maximum Talent Access:

• Target states where your industry employs 15%+ of workers
• Choose specialized states if deep industry expertise is critical
• Consider regional clusters for networking and ecosystem access
• Factor in total employment—large states with high shares offer largest talent pools

For Balanced Approach:

• Target states with 10-15% employment share (good presence without over-specialization)
• Choose diverse states for economic stability
• Balance industry presence with other factors (markets, costs, quality of life)
• Consider both specialized and diverse states based on specific needs

For Risk Management:

• Avoid states where one industry employs 30%+ of workers (over-specialization risk)
• Prefer diverse states if economic stability is priority
• Monitor employment share trends—declining shares may signal challenges
• Diversify across multiple states if possible

For Market Entry:

• Use employment shares to estimate market size and competition
• High-share states may have more competition but also larger markets
• Low-share states may have less competition but smaller markets
• Balance market size with competition intensity

Timing Considerations

Best Time to Use Data: When making location decisions, planning expansion, or assessing talent availability. Use proactively, not reactively.

When to Reassess: Annually or when considering major location changes. Employment shares evolve as industries grow or decline.

When Share Matters Most: For talent-intensive industries (tech, healthcare, professional services) where employment share directly indicates talent pool size.

Economic Cycle Planning: Employment shares may change during economic cycles. Specialized states may be more volatile; diverse states more stable.

Resource Recommendations

Official Data Sources:

• BLS Current Employment Statistics - Monthly employment data by industry and state
• BLS Employment by Industry - Industry employment statistics
• BLS State and Area Employment - State-level employment data

Additional Tools:

• Industry association reports for sector-specific insights
• Economic development agency data for state industry information
• Regional economic analysis tools for cluster identification
• Location planning tools that incorporate employment share data

FAQs - Frequently Asked Questions About Industry Employment Share Analysis: Sector

In Summary

Understanding which industries dominate employment in each state helps you identify industry-friendly locations with large talent pools, strong infrastructure, and supportive ecosystems. This analysis uses official BLS CES data to reveal employment share patterns—showing what percentage of each state’s workers are in each industry.

The data shows that industry employment shares vary dramatically: some states have 20%+ of employment in a single industry (specialized), while others have more balanced distributions (diverse). Understanding these patterns helps you make strategic location decisions based on talent availability, industry infrastructure, and economic structure.

By understanding these statistics, you can make data-driven decisions about hiring, compensation, and market analysis.

This analysis reveals important patterns and trends that inform business strategy and help identify opportunities.

Applying the insights from this article can have several practical benefits:

• Strategic Planning: Use this data to inform hiring decisions and compensation strategies.
• Competitive Analysis: Compare your compensation and employment practices against industry standards.
• Risk Assessment: Understand labor market conditions to assess hiring and retention challenges.

By leveraging the information outlined in this article, businesses can gain a competitive edge and make more informed strategic decisions.

Ready to take action based on this data?

This data can help you make informed decisions about business location, market entry, and strategic planning.

Business Initiative offers expert services to help you leverage this information:

• Explore Profit Margin
• Explore Break Even Analysis
• Explore Break Even

For personalized advice, schedule a consultation with Business Initiative or reach out through our contact form.

Explore more by subscribing to The Initiative Newsletter or following us on X for the latest insights.

Tweet to @BisInitiative