As the U.S. economy heads toward normalcy — the latest evidence being the Federal Reserve’s decision to raise interest rates — we got to wondering which cities can most boast about their economies.
The Santa Monica, Calif.-based Milken Institute has drilled down using a host of metrics to find the metro areas whose economic engines are firing on all cylinders. Milken divided cities into large and small, growth in jobs and wages and the robustness of high-tech industries as key benchmarks in its formula. The growth scores index job and pay growth against the national average, which gets a score of 100.
The Milken reports notes that job and wage growth contributes mightily to a community’s health and that the housing market nationally has bounced back from its nadir after the bubble burst.
Metro areas involved in designing high-tech hardware and software and social media apps had a leg up on other cities, the Milken report said.
In this year’s rankings, Southern states lead the way, taking six spots in the top 25. The Midwestern states only managed to land two metro areas among them.
Check out the top 10 large cities for economic growth in 2015:
10. San Luis Obispo-Paso Robles-Arroyo Grande, Calif.
2014 rank: 24th.
5-year job growth: 105.60 (ranked 18th).
1-year job growth: 101.77 (ranked17th).
5-year pay growth: 100.51 (ranked 66th).
1-year pay growth: 101.53 (ranked 33rd).
Overall index: 763.
Takeaway: The metro area, with a population of about 280,000, saw job growth that was 2% higher than the national average.
9. Greeley, Colo.
2014 rank: 9th.
5-year job growth: 117.29 (1st).
1-year job growth: 106.74 (1st).
5-year pay growth: 111.27 (5th).
1-year pay growth: 105.92 (1st).
Overall index: 758.
Takeaway: With about 277,000 residents, Greeley benefited from the oil extraction in nearby Nebraska, which pushed wages up.
8. Portland-Vancouver-Hillsboro, Oregon-Washington
2014 rank: 16th.
5-year job growth: 103.35 (41st).
1-year job growth: 101.03 (38th).
5-year pay growth: 103.10 (37th).
1-year pay growth: 101.35 (40th).
Overall index: 688.
Takeaway: Buoyed by gains in its tech sector, the area of 2.3 million people saw solid job and wage gains.
7. Seattle-Bellevue-Everett, Wash.
2014 rank: 11th.
5-year job growth: 103.58 (37th).
1-year job growth: 101.09 (37th).
5-year pay growth: 107.52 (14th).
1-year pay growth: 102.02 (23rd).
Overall index: 622.
Takeaway: At 2.8 million residents, the Seattle area was another Northwest metro area helped by a robust tech industry. After falling to 14th, the area climbed back into the Top 10.
6. Raleigh, N.C.
2014 rank: 5th.
5-year job growth: 105.61 (17th).
1-year job growth: 1101.61 (22nd).
5-year pay growth: 107.82 (13th).
1-year pay growth: 102.11 (11th).
Overall index: 617.
Takeaway: The 1.2 million residents of the region benefit from innovation and the high-tech diversity of its business base.
5. Dallas-Plano-Irving, Texas
2014 rank: 9th.
5-year job growth: 106.18 (11th).
1-year job growth: 102.06 (14th).
5-year pay growth: 103.97 (30th).
1-year pay growth: 101.85 (25th).
Overall index: 566.
Takeaway: Diversification allowed the area of 4.6 million to weather the fall in oil prices, which a generation ago would have been devastating to the local economy.
4. Austin-Round Rock, Texas
2014 rank: 2nd.
5-year job growth: 112.33 (2nd).
1-year job growth: 102.18 (12th).
5-year pay growth: 112.55 (3rd).
1-year pay growth: 101.85 (25th).
Overall index: 294.
Takeaway: The Texas city of nearly 2 million is another that, like Dallas, weathered the plunging oil market as well as the high dollar working to restrict imports of electronics.
3. Provo-Orem, Utah
2014 rank: 3rd.
5-year job growth: 112.09 (3rd).
1-year job growth: 102.20 (11th).
5-year pay growth: 109.16 (10th).
1-year pay growth: 103.79 (5th).
Overall index: 195.
Takeaway: Low taxes and costs helped drive the best job growth of any large metro area for this area of 570,000.
2. San Francisco-Redwood City-South San Francisco, Calif.
2014 rank: 2.
5-year job growth: 110.29 (5th).
1-year job growth: 110.64 (6th).
5-year pay growth: 121.72 (1st).
1-year pay growth: 103.08 (7th).
Overall index: 108.
Takeaway: Young knowledge workers from around the nation and world put this area of 1.6 million just a tick away from 1st in the closest finish ever in the rankings.
1. San Jose-Sunnyvale-Santa Clara, Calif.
2014 rank: 4.
5-year job growth: 109.25 (7th).
1-year job growth: 102.58 (7th).
5-year pay growth: 116.54 (2nd).
1-year pay growth: 104.09 (1st).
Overall index: 100.
Takeaway: The area of 2 million reclaimed first place among large metro areas after two years out of the top spot.
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