What do Austin, Texas; Durham, North Carolina; and Olympia, Washington have in common?
These three metro areas each landed a top-ten spot in this year’s Milken Institute Best Performing Cities Index, an annual study that ranks cities on their ability to create and sustain jobs.
Rankings are based on an analysis of both long-term (five year) and short-term (one-year) indicators of employment and salary growth. The study also includes four measurements of technology output growth, which are included because of technology’s crucial role in creating good jobs and driving regional economies.
Six of the cities in this year’s top ten group were among last year’s top ranked metro areas as well.
The continued success of these metro areas can be credited to a combination of attributes, according to Armen Bedroussian, Research Economist with the Milken Institute and one of the report’s co-authors. “These cities not only were able to retain their strengths, but also relied on strategies that enabled them to survive the challenges brought upon by the overall downturn in the economy.”
One common thread that runs among the cities at the top of the Best Performing Cities index is that none experienced the housing bubble that many other metro areas did; therefore, they were able to avoid the inevitable correction in the housing market.
“Not surprisingly, metro areas whose economies depend on thriving industries fared better than their less fortunate counterparts,” as Armen Bedroussian points out.
Several of the cities on this year’s top ten list have a heavy reliance on oil and gas exploration, for example. Others saw a return on their investment in clean air technology research, seeking alternative fuel sources such as solar and wind power.
Cities that depend on the high tech industry and service sector also managed well. Metro areas whose economies were not closely linked to international trade – and thus were not major exporters – were also among the list of biggest movers.
Conversely, those metro areas with a stronger dependence on durable goods manufacturing – a sector that was hit harder by the recession – were more apt to experience a decline in their overall scoring, he says.
While most of the metro areas earned a spot at the top of the heap because they suffered the least decline in employment, a few – like #1 Austin – actually experienced growth.
As Armen Bedroussian explains, the Milken Institute report is not limited solely to employment growth, but rather takes into account salary trends and technology output measures. “Wage growth and high-tech gross domestic product (GDP) trends can point to the quality of jobs that are being created or sustained in a regional economy.”
2009 Best Performing Cities
The top ten metro areas in the 2009 Milken Institute Best Performing Cities Index are:
- Austin-Round Rock, Texas
- Killeen-Temple-Fort Hood, Texas
- Salt Lake City, Utah
- McAllen-Edinburg-Mission, Texas
- Houston-Sugar Land-Baytown, Texas
- Durham, North Carolina
- Olympia, Washington
- Huntsville, Alabama
- Lafayette, Louisiana
- Raleigh-Cary, North Carolina