LOS ANGELES - Provo, Utah used its high-tech muscle to gain the top spot in the Milken Institute / Greenstreet Real Estate Partners 2008 Best-Performing Cities Index and is joined by other growing technology-based and global trade centers in Utah, Texas, Washington, Alabama and the Carolinas.
The rebounding technology sector boosted several newcomers to the top 10 in the annual ranking of where America's jobs are being created and sustained, and metros that are highly dependent on export-intensive industries also showed success.
Several past leading cities fell due to the national decline in housing and construction markets, and metros that remain concentrated in manufacturing continue lag in the rankings. Rising energy prices have hindered the performance of cities where industries with high energy use are the key drivers, while benefiting those regions with significant oil and gas production and exploration activities.
"This year's rankings demonstrate that entrepreneurs continue to be the economic engine of choice for job growth, even in the face of national and global economic challenges," said Ross DeVol, author of the report and director of Regional Economics at the Milken Institute. "We've seen energy, housing and even catastrophic events such as Hurricane Katrina impact a specific year, but consistently, those metros dedicated to growing their technology base and human capital beat the short-term shifts in the economy."
Strong national economic downturns in housing and construction brought down last year's top-ranked cities, with Florida and California metros — including top spot Ocala, Fla. (falling from 1st to 30th) and Riverside, Calif. (slipping from 3rd to 53rd) — being some of the hardest hit.
The 2008 top 10 performers (with 2007 rankings in parentheses) of the 200 largest metros:
1. Provo-Orem, Utah (8)
2. Raleigh-Cary, North Carolina (10)
3. Salt Lake City, Utah (18)
4. Austin-Round Rock, Texas (20)
5. Huntsville, Alabama (16)
6. Wilmington, North Carolina (2)
7. McAllen-Edinburg-Mission, Texas (7)
8. Tacoma, Washington (50)
9. Olympia, Washington (37 in 2007 smallest-metros ranking)
10. Charleston-North Charleston, South Carolina (12)
Olympia is new to the 200 largest metro rankings, having seen population growth, attracting residents from nearby Seattle and Tacoma with its low costs for business.
America's 10 Largest Cities: Existing high density offers limited space for expansion in established large cities and limits the ability of America's largest metropolitan areas to compete with faster-growing regions, so they are also ranked separately in the annual index. Unlike the previous two years, none of the 10 largest cities in the country ranked among the top 10 overall performers in 2008. Previous standouts Riverside-San Bernardino-Ontario, Calif., and Phoenix-Mesa-Scottsdale, Az., both experienced significant declines. Meanwhile, Houston-Sugar Land-Baytown, Texas, continued its dramatic, energy-industry-driven ascent to become the top performer among the nation′s 10 largest metros (16th), followed by Dallas-Plano-Irving, Texas (23rd).
Small-Cities Rankings: Midland, Texas, moves up from 3rd place in our last ranking to take this year's title as best-performing small metro (those with a population of 235,000 and below), trading places with last year's top performer, Bend, Ore., which drops to 3rd. This year's list of small cities contains 124 cities, compared to 174 last year, because the Bureau of Labor and Statistics collected data on fewer small metro areas due to funding cuts. The decrease in the number of cities ranked resulted in a significant gain in year-over-year ranking for some metros (last-place Jackson, Miss., for example, shows an improvement in ranking of 50 points).
Biggest Movers: El Paso, Texas is this year's most improved, moving up 85 spots from 122nd to 37th. El Paso saw a boost in economic activity due to a major expansion of the U.S. Army base at Fort Bliss. Nearly 21,000 soldiers are expected to transfer from other bases, with more than 7,000 having already arrived so far. The biggest drop comes from Vallejo-Fairfield, Calif., which fell 123 spots, from 22nd in 2007 to 145th this year. The city of Vallejo declared bankruptcy in May due to a combination of falling revenues from sales tax and real estate taxes and high costs for current employee and retiree salary and benefits.
The lowest performers on this year's index once again come from the industrial Midwest, with nine of the bottom 10 metros coming from Michigan or Ohio. This year's lowest-ranked metro is Detroit-Livonia-Dearborn, Mich.
About the Best-Performing Cities Index: The index ranks U.S. metros based on their ability to create and sustain jobs. It includes both long-term (five years) and short-term (one year) measurements of employment and salary growth. There are also four measurements of technology output growth, which are included because of technology's crucial role in regional economic growth.
Data for all 324 metros is also available in our Best Peforming Cities interactive web site. You may view your metro′s rankings here.