Where America's Economic Output Is Growing
Eighty percent of America's metropolitan areas experienced real economic growth in 2012, according to new figures released yesterday by the U.S. Bureau of Economic Analysis.
Of the nation's 381 metros, a full 305 experienced some year-over-year growth in GDP. And significantly, this pace of this growth has accelerated, averaging 2.5 percent across the country's metro areas in 2012, compared to 1.7 percent last year.
That's the good news. Fewer places than you'd think are being left totally behind, though the story within and between these metros is more complicated. Even with this promising statistic, economic growth remains spiky as the recovery continues to play out. The top 20 metros averaged 8 percent growth, more than three times the national average, while the bottom twenty lagging metros saw their growth rates contract by an average of -3.3 percent. Roughly a third of metros had growth above the national average.
The map below, from the BEA's report, charts the pattern of growth and decline in GDP for America's 381 metro areas over the last year.
America's economy remains geographically concentrated. The ten largest regions (defined by GDP) account for more than a third (34 percent) of the country's total, and averaged growth levels of 3.1 percent, significantly above the national average. Of these ten metros, San Francisco had the highest rate of growth (7.4 percent), followed by Houston (5.3 percent) and Dallas (4.3 percent).
Looking at the broader category of large metros (defined as those with more than one million people), New Orleans led the way, registering a 7.6 percent rate of growth in real GDP in 2012. But New Orleans's economic track record over the past few years has been volatile: It saw a contraction of -5.6 percent in 2011, after growth of 6.5 percent in 2010. San Francisco falls to second. Austin is third, with 6.5 percent growth; Nashville is fourth, with 5.4 percent growth; and Houston falls to fifth, with 5.3 percent growth. Portland (5.1 percent); Charlotte (4.9 percent); Seattle (4.6 percent); Dallas (4.3 percent); and Salt Lake City (4.1 percent) round out the top ten large metros by real GDP growth rate. The average growth of all the metros over one million people was 2.9 percent, also better than the national average.
On the flip side, Hartford was the only large metro to see a contraction, with a -0.4 percent change in real economic output in 2012. Milwaukee registered a zero percent change, while Rochester, New York, saw growth of just 0.3 percent. Surprisingly, Washington, D.C., which has largely side-stepped the economic crisis, saw growth of just 0.7 percent, fourth lowest of large metros and worse than Buffalo (0.8 percent) and Las Vegas (1.4 percent).
Overall, smaller regions grew the fastest. Midland, Texas, led the nation with a 14.4 percent growth rate, followed by Odessa, Texas (14.1 percent); Elkhart-Goshen, Indiana (11.4 percent); St. Joseph, Missouri (9.8 percent); and Columbus, Indiana (9.6 percent). Victoria, Texes (8.7 percent); Bismarck, North Dakota (8.5 percent); Kokomo, Indiana (8.4 percent); New Orleans (7.6 percent); and San Francisco (7.4 percent) round out the top ten.
Conversely, the metros with the lowest rates of growth are also smaller ones. Shreveport, Louisiana, had the nation's poorest rate of economic growth, registering a -11.1 percent change in real economic output in 2012, followed by Lafayette, Louisiana, and Hammond, Louisiana, with -8.1 percent and -5.0 percent growth respectively.
The BEA analysis notes that the growth was powered by the recovery in durable-goods manufacturing, in trade and in finance. It points out that while natural resources and extractive industries were not a major contribute to growth overall, they did power growth in regions in the Southwest, especially in Texas.
I'll have much more to say about the geography of recent U.S. economic growth in coming posts. Stay tuned.