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Milken Institute's annual review of U.S. Best Performing Cities: Texas still on top; Utah metros zoom up in rankings
For Immediate Release
Dec 15, 2011

Los Angeles — The Milken Institute's annual survey of Best Performing Cities reveals that, for the second year in a row, other states can't mess with Texas.

This year, San Antonio topped the list of 200 large metros, and Houston scored No. 1 among the 10 biggest U.S. metros. In fact, Texas metros occupied four of the Top 5 positions (vs. three last year), and nine of the Top 25 (vs. 11 in 2010). Despite continuing national economic weakness, the Texas job machine continued to crank out employment gains: Its employers created one of every six new jobs in the United States in the year through October.

What is the secret sauce behind the Lone Star State's success? Texas benefits from a lower reliance on durable goods manufacturing, low business costs, the ongoing consolidation of military bases, increased trade with Mexico and South America, continued energy exploration and development, and aggressive recruiting of employers from less business-friendly states.

Utah metros also made an impressive showing, with three metros in the Top 25 vs. only one last year. The Salt Lake City, Provo and Ogden metro areas climbed an average 32 positions, with Salt Lake gaining 49 spots. Utah was the only state to double its volume of exports over the past five years, and Salt Lake's economy is highly diversified, with pharmaceuticals, medical devices, transportation equipment, financial services, and high-tech companies.

"There were some common themes among top-performing metro areas across the country," says Ross DeVol, the Institute's chief research officer and one of the report's authors. "Many that did the best were those that took advantage of the boom in energy production and increased investment in equipment by businesses. And it is no accident that the housing markets showing the most resilience are in cities with growing employment."

The Best-Performing Cities index includes measures of job, wage, and technology performance to rank the nation's 200 large metropolitan areas. Unlike other "best places" rankings, it does not use quality-of-life metrics, such as commute times or housing costs. In the Institute's index, employment growth is weighted most heavily due to its critical importance to community vitality. Wage and salary growth measures the quality of jobs created and sustained.

Among the findings in the report:

  • San Antonio — one of a handful of metros that have exceeded their pre-recession employment peak — leaped 13 positions to earn our top spot. Realignment of military bases is bringing new jobs and construction to San Antonio, while advances in drilling techniques have made the area's Eagle Ford shale formation more attractive to oil and gas companies. Housing prices, which fell less than 5 percent from the peak, are supported by new residents attracted by the available jobs.
  • Fort Collins/Loveland, Colo., jumped 47 positions to reach third in this year's index. The metro offers many of the same amenities as Boulder but at a lower cost. Home to Colorado State University, Fort Collins has attracted a number of high-tech firms; technology output is over 50 percent more important to the Fort Collins economy than the national average. In part because of the university, the metro is a leader in innovative infrastructure investments.
  • Charleston, S.C., continued its steady climb — to 11th this year from 19th in 2010, and 30th the year before. Thanks to aerospace and data-processing services, Charleston ranked 16th in high-tech output growth for the last five years. Boeing's new assembly plant is generating positive ripple effects in other aerospace-related employers.
  • Houston was in the top spot of America's 10 largest metros, although it slid to 16th among the biggest 200. Oil and gas exploration is nearly 15 times more important in the region than the national average, and the metro's long-term job growth was sixth highest in the nation.
  • In the metropolitan area anchored by Washington, D.C., federal employment continued to shield the economy from the aftermath of the Great Recession. The government created 15,000 new jobs, and salaries in the area continued to rise faster than the national average.
  • Philadelphia had the most dramatic rise among the biggest cities, up 34 positions in the overall index and leapfrogging New York to place fourth among the largest metros. Education, health care and tourism led private employment to a two-year high.
  • In a sign of the dynamism of the U.S. economy, many of this year's trailing cities were once on top: Las Vegas, now 197th, was No. 2 in 2003 and 2004. And the metro at the bottom of the biggest 200, Cape Coral/Fort Myers, Fla., was No. 1 in 2004.
  • Merced, Calif., the epicenter of the housing collapse, recorded the biggest jump in ranking, vaulting 105 positions to 63rd. Merced's housing sector has begun to heal, and new hiring in trade and transportation helped the region.
  • In addition to the 200 largest metros, the Milken Institute research also looked at 179 small metros. The best-performing small city was the Logan, Utah, metro area, which vaulted from 19th last year.

For a copy of the complete report, "Best Performing Cities 2011: Where America's Jobs Are Created and Sustained," or to interview authors Ross C. DeVol, Armen Bedroussian, and Kevin Klowden, please contact:

Conrad Kiechel, Director of Communications
+1-310-570-4668; ckiechel@milkeninstitute.org

Data for all metros is also available on our Best-Performing Cities interactive website at http://bit.ly/sINlVd. The report (pdf) is available here: http://bit.ly/ufx3ah.