LOS ANGELES, CA (February 6, 2024) — Austin, Texas has demonstrated the best performance among large cities, according to the 2024 Milken Institute Best-Performing Cities (BPC) Index, taking the top spot after an impressive three-year run by Provo–Orem, Utah. Among small cities, Idaho Falls, Idaho maintained the first position this year after earning the same spot in last year’s rankings. These cities’ rankings were fostered by strong job and wage growth and a robust high-tech presence.
The index, published annually since 1999, reflects cities’ effectiveness at leveraging their resources to promote economic growth and provide their residents with access to the essential services and infrastructure needed for success. The index is based on job creation, wage growth, and the high-tech sector’s output growth, in addition to measures of access to economic opportunities, such as housing affordability and broadband coverage. Recognizing the importance of sustainable and equitable growth, this year the index also includes metrics of communities’ ability to respond to economic and natural disasters and income inequality.
The 2024 index and rankings are mainly based on data from 2022. During that year, the US labor market added more than 6 million jobs, 90.7 percent of which were in metropolitan areas, proving the importance of cities to the nation’s growth.
“The labor market displayed remarkable resilience in 2022. By the end of the year, total US employment exceeded its pre-pandemic level, though the national statistics mask important differences across metropolitan areas. Many low-tier large and small cities continued to struggle, with employment numbers that remained below their 2019 levels. This signals that the pandemic has had long-lasting impacts on the economy of several metropolitan areas,” said Maggie Switek, PhD, senior director of the Milken Institute’s Research Department.
This year’s top-performing cities had several common themes: a vigorous and growing high-tech sector, rebounding leisure and hospitality sectors, and community resilience. Simultaneously, housing supply and affordability was a concern among most top-performing cities. While remarking on the strong performance of top-ranked cities, this year’s BPC report also noted that cities that offer higher wages and lower costs of living remain attractive to younger generations of workers.
Having become an established hub for an extensive number of high-tech industries, Austin received the top ranking with the highest levels of employment growth and wage growth over the last five years. This is the sixth consecutive year that the Austin–Round Rock area has ranked in the top five best-performing cities.
“Austin has always been a town where new and different ideas are welcomed. That embrace of creativity and imagination has helped us stay a great city and evolve into a focal point in the global economy. This is a truly exceptional place in which to live and work, and talented folks from all over have been drawn to Austin by the natural beauty, live music, and, yeah, its great barbecue. I’m very proud the Milken Institute has recognized Austin as the nation’s Best-Performing City,” said Austin Mayor Kirk Watson.
Idaho Falls, Idaho tops the list of small cities for the second year. The metro’s top position is due to its strong performance across all components of the index, signaling that growth has been sustainable and inclusive.
The index ranks cities into five tiers, allowing stakeholders such as policymakers, business leaders, and residents to compare their economic performance more easily to their peers. Notably, most of the top-performing Tier 1 cities (13 out of 18) are in landlocked states, with only one top-tier city (Charleston–North Charleston, SC) along a coastline.
Key findings from the 2024 Best-Performing Cities Index:
Austin, Texas holds the No. 1 ranking among large cities due to its rapid job and wage growth along with a robust high-tech sector. Raleigh, North Carolina; Boise, Idaho; Salt Lake City, Utah; and Provo, Utah round out the top five.
Idaho Falls, Idaho retains the No. 1 ranking among small cities due to its robust labor market growth bolstered by a small but growing high-tech sector, coupled with strong performances across all components of the ranking.
San Luis Obispo–Paso Robles–Arroyo Grande, California experienced the most dramatic decline, dropping by 74 spots to its current 161st position. The region’s fall was driven mainly by a sharp deceleration in wage growth during 2022. Leisure and hospitality was the sector with the most pronounced wage growth slowdown.
“Cities such as Austin, which has a well-balanced assortment of tech industries, are well positioned to maintain their growth. As these cities grow, it is important that they continue to invest in sustainable and equitable development, to assure that economic opportunities are spread equitably among their residents,” added Switek.
How We Evaluate Cities
The index measures economic vitality in 200 large metropolitan areas and 203 small metropolitan areas by assessing performance of the labor market, tech sector, and access to economic opportunities. The 2024 version of the index emphasizes jobs, wages, high-tech growth, housing affordability, and broadband coverage, in addition to newly incorporated metrics of community resilience and income inequality.
To ensure that population size doesn't skew results, the index divides US metropolitan areas into large and small cities, which are then classified into five tiers, with Tier 1 being the highest-ranked cities and Tier 5 being the lowest-ranked cities. The Best-Performing Cities interactive map allows you to compare cities' performance relative to their peers, determined by city size and ranking tier.
2024 Milken Institute Best-Performing Cities Index
LARGE US CITIES: TIER I
Austin–Round Rock, TX
Boise City, ID
Salt Lake City, UT
Charleston-North Charleston, SC
SMALL US CITIES: TIER I
Idaho Falls, ID
Coeur d'Alene, ID
St. George, UT
Twin Falls, ID
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About the Milken Institute
The Milken Institute is a nonprofit, nonpartisan think tank focused on accelerating measurable progress on the path to a meaningful life. With a focus on financial, physical, mental, and environmental health, we bring together the best ideas and innovative resourcing to develop blueprints for tackling some of our most critical global issues through the lens of what’s pressing now and what’s coming next.
For more information, visit: www.milkeninstitute.org.