Thursday, February 24th, 2011

New Metro GDP Data Released

The Bureau of Economic Analysis yesterday released the 2009 data for metropolitan area GDP. Their headline, “Economic Decline Widespread in 2009,” should come as a surprise to no one.

The BEA focuses on the year on year change. I’d rather look at the full span of the data that’s available, which is now 2001-2009. Here’s a look at percent change in total real metro area GDP during that time period:

And here are the top ten metro areas over one million in population on this metric:


Row Metro 2001 2009 Pct Change
1 Portland-Vancouver-Hillsboro, OR-WA 81,505 114,028 39.90%
2 Oklahoma City, OK 43,835 59,532 35.81%
3 Austin-Round Rock-San Marcos, TX 55,466 75,136 35.46%
4 Las Vegas-Paradise, NV 63,730 82,255 29.07%
5 Orlando-Kissimmee-Sanford, FL 71,940 91,400 27.05%
6 Phoenix-Mesa-Glendale, AZ 138,780 174,617 25.82%
7 Washington-Arlington-Alexandria, DC-VA-MD-WV 294,656 368,793 25.16%
8 San Jose-Sunnyvale-Santa Clara, CA 117,447 146,448 24.69%
9 Salt Lake City, UT 48,157 59,603 23.77%
10 San Diego-Carlsbad-San Marcos, CA 126,875 155,850 22.84%

Per capita tells is a little bit different story. Here’s a map of US metro areas for percent change in real GDP per capita:

The stunning collapse in real per capita GDP and also the erosion in per capita personal income relative to the nation is one of the key reasons I see Atlanta as a region with far more troubles than is generally assumed.

Here are the top ten large metros again:


Row Metro 2001 2009 Pct Change
1 Portland-Vancouver-Hillsboro, OR-WA 41,256 50,863 23.29%
2 Oklahoma City, OK 39,573 48,507 22.58%
3 San Jose-Sunnyvale-Santa Clara, CA 67,299 79,604 18.28%
4 San Diego-Carlsbad-San Marcos, CA 44,252 51,035 15.33%
5 San Francisco-Oakland-Fremont, CA 63,260 72,259 14.23%
6 Los Angeles-Long Beach-Santa Ana, CA 46,147 52,158 13.03%
7 Washington-Arlington-Alexandria, DC-VA-MD-WV 59,801 67,344 12.61%
8 Virginia Beach-Norfolk-Newport News, VA-NC 37,960 42,521 12.02%
9 Buffalo-Niagara Falls, NY 31,160 34,472 10.63%
10 New Orleans-Metairie-Kenner, LA 49,100 53,835 9.64%

All I can say is, this data looks great for Portland. That city isn’t perfect to be sure, but on the GDP side of the house, the plan is working beautifully. Contrary to slacker stereotypes, high value work is increasingly being produced there.

33 Comments
Topics: Economic Development

33 Responses to “New Metro GDP Data Released”

  1. Zathras says:

    That’s really amazing about Atlanta. The only other similarly-sized area with such a large drop is Detroit. We know what happened to Detroit. What happened to Atlanta?

  2. Zathras says:

    A couple of other interesting data points:

    1) 8 of the bottom 9 performers in real per capita GDP growth change over the last decade are in the South (Greeley,CO being the only exception). Out of the bottom 20, outside of Greeley and a few in Michigan, all of them are in the South.

    2) One particularly interesting pairing: Raleigh and Durham-Chapel Hill NC are right next to each other (I’m surprised they are not considered a single area). Durham-Chapel hill is near the top (8 out of 367). Raleigh is near the bottom (340 out of 367). Why such a wide disparity?

  3. Andy says:

    Between Pittsburgh, New Orleans and Buffalo (all of which outperformed even Dallas & Houston), I think this data presents a compelling argument for why regions should not look at population growth as their primary metric.

  4. The Portland data doesn’t surprise me, but this doesn’t contradict the PDX stereotypes. The Portland metro is home to Nike Wold Headquarters,and major campuses for Intel, IBM, HP, and many other high tech firms. None of them are actually located in the city, though. They’re all out in Washington County. None of these firms would even consider operating within Portland city limits. In fact, Phil Knight from Nike has been battling Portland’s attempts to annex Beaverton for years to avoid being subjected to the onerous taxes and regulations that the city would inevitably saddle them with. The Portland success story is really the Washington county success story.

  5. Andy, don’t for get than in the New Orleans case, the “capita” declined significantly as a result of Katrina. That skews their results.

  6. Steve, I think it’s true that tech industry centers generally are suburban. I’m not sure that’s a Portland specific phenomenon.

  7. John says:

    Contrary to slacker stereotypes, high value work is increasingly being produced there.

    Definitely makes a compelling case that if you create a place that people want to live, work will move there to follow.

    Also Buffalo is definitely a surprise on that second list. What are they doing right?

  8. Wayne says:

    Wondering why Atlanta looks so terrible – Could it be that population inflow is above the rate of job creation? Could that be what’s pushing down per capita numbers? (something similiar appears to be happening in Dallas/Houston where many new jobs are created but not fast enough for the inflow of new residents).

    Aaron, what are the other troubles you see in the Atlanta region?

  9. Chris Barnett says:

    Wayne, you can’t look at GDP increase as a proxy for job creation. Especially at the end of a deep recession, GDP increase can come from increased worker productivity, which might itself be the result of downsizing.

    Warning: economics content.

    The same number or fewer workers adding more overall value of goods and services = GDP increase.

    If GDP grows faster than population, then GDP per capita increases also.

    But simultaneously there could be LOWER employment and lower median household income if employment and wages don’t grow as fast as GDP…again, another likely outcome at the tail end of a recession.

  10. Joseph E says:

    Well, this data certainly counter-acts the claims around here that California is losing good jobs. California’s big Metros (with the exception of Riverside/San Bernardino, which was killed by the housing collapse) are all in the top 10 in GDP growth per capita, despite already having high GDP per person at the start of the decade.

    But I still may need to move to Oregon, since my wife’s job is generally tied to state funding, and California’s state government is a mess. It goes to show that good governance is just as important as good private industry and growth.

  11. DBR96A says:

    Part of Atlanta’s problem has to be its rapid population growth. The metro area has a very high birth rate, and also a highly positive rate of domestic migration. This is why population growth has exceeded job creation, and it’s also why Atlanta’s metro unemplyment rate remains over 10%.

    There’s also the hurricane factor, both from Hurricane Katrina and the barrage of hurricanes that hit Florida in 2004 and 2005. Many evacuees from both New Orleans and Florida ended up moving inland, and the first big inland city is Atlanta. Those who have had the means to return to either place probably have, while those who don’t probably remain stuck in Atlanta. (I imagine the same scenario played out in Houston after Hurricane Katrina, but many of those who evacuated New Orleans for Houston probably evacuated Houston when Hurricane Ike rolled in, so the impact was lessened.)

    Another more politically-incorrect possibility is that Atlanta has become “the capital of black America,” and many black Americans have relocated to Atlanta in the last 10 years. Black Americans still make less money on average than white Americans, so a large influx of them into a metropolitan area could skew the real CPI growth rate down slightly.

    There’s also the bankruptcy of Delta Airlines, and Ford and GM both closing automotive assembly plants in the last five years. These two factors alone are responsible for the loss of tens of thousands of well-paying jobs. Combine everything I’ve mentioned above with a pretty rapid increase in the cost of living, and you have the recipe for low real PCI growth.

  12. With regards to Atlanta, other Sun Belt cities had similar rapid growth in population and did not post these results. If one believes that this is simply a result of jobs not catching up, then that just re-asks the same question: what’s going on in Atlanta?

  13. noah says:

    @Steve Lafleur: You have that totally wrong. Nike is in unincorporated Washington County. Beaverton wants to annex their land, but they can’t because Nike managed to get its own law forbidding it. Portland is not trying to annex another city.

  14. Wayne says:

    All very good points. It is surprising to see Atlanta that way – I don’t typically think of Atlanta in the same category with Detroit, but these numbers say a lot about Atlanta metro problems.

  15. What noah said.

    As noted, the Portland metro’s high tech corridor is in suburban Washington County, but much of that has to do with relatively cheap land (in the past), and a nexus of talent living out that way. The Hillsboro/Portland corridor actually has been getting significantly denser, particularly near the MAX Blue Line.

    A bit more info on the Beaverton/Nike situation. A while back, Beaverton engaged in quite a few cherry-stem annexations, as well as annexations where it annexed narrow corridors of several streets through under which city utilities (water and sewer) were located. A few years back, former mayor Rob Drake got the bright idea that these feet-wide swaths of the city, some of which completely surround various unincorporated tracts (including the Nike campus), were sufficient to trigger the “island” provision of state annexation law (by which islands of unincorporated areas surrounded by a city can be annexed into the city without a vote). This proposal was unpopular to say the least, and when some backroom subterfuge came to light, the State Legislature essentially through a wrench in the works of Beaverton’s annexation plans, including a specific provision preventing the Nike campus from being annexed without Nike’s consent. (Nike, for its part, successfully backed another candidate for mayor, one Denny Doyle, in the 2008 election; under Mayor Doyle the city’s reputation with the business community has improved quite a bit).

  16. Kasey Klimes says:

    Tech and athletic firms aside, is it unreasonable to suggest that the strength of Portland’s local small business economy has anything to do with their impressive metrics? I’ve always been stunned by the concentration of small businesses and the relative absence of corporate chains while in Portland. Granted, I’ve never ventured much outside the city, but it seems strong enough to have influence in the metro region. Certainly the big firms (Nike, Intel, etc.) have a lot to do with the metro’s economic success, but a lot of cities have large firms that have done just as well as those companies if not better. I don’t know what the more detailed numbers suggest, but it seems Portland’s local economy sets it apart more so than its corporate headquarters.

  17. Alon Levy says:

    Per capita income tells a different story about Portland. There’s no data for 2009 yet, but in 2001-8, Portland’s nominal per capita income grew 21%, versus a national average of 29%. (The corresponding real numbers are -0.7% and 6.8%). Its corporate profits may have grown very fast, but personal income stagnated.

  18. noah says:

    @Kasey Klimes: I’m skeptical, but maybe you’re right. Portland’s small businesses have a reputation for paying very low wages for hard/skilled work. It doesn’t mean the owners aren’t doing well for themselves. (I certainly know of restaurants where that’s just the case.) That arrangement would translate to low median income, high GDP.

  19. Mike D says:

    From the look of the map, and the tables, Vancouver, WA is included in the Portland, Ore metro area and Vancouver’s county shows a decline. That seems to suggest that the Portland area would have fared better if it wasn’t weighed down by Vancouver and Clark County.

  20. Michael says:

    Wow. That is really good and really amazing… it is a little bit shocking though… how could it be that high with their unemployment still staying where it is? Thanks for posting this though, definitely! :)

  21. mrdennmann says:

    The Portland statements above are indeed fascinating.

    Inner Portland is also home to the worlds most prolific media/marketing/advertising companies. That should be factored in. Weiden & kennedy, Laika, and many more employ creative professionals inside of the city limits. Portland also has a very pro small business system. This has caused an explosion of smaller businesses to pop up. They have created “small business incubation zones” that help people that are just getting started as well. Portland also has a $110 million dollar bicycle industry that has been getting the attention of other communities.

    Vancouver, however, is seen as “The anti-portland”. Small businesses struggle with red-tape, or a “walmarted” out. Unemployment in Clark County the last time that I checked (within the last 30 days) stood at 13.7 percent. Much of this is due to the conservative/libertarian view, and suburban sprawl, and lack of enforcement of an urban growth boundary.

  22. Chris Barnett says:

    Alon, GDP isn’t the same as “corporate profits” except in a gross sense. Theoretically, GDP for a region measures the value added by work to inputs (capital and materials).

    But you are getting at the same thing I am: GDP growth doesn’t necessarily mean employment or wage growth.

    There was an interesting piece in the WSJ today addressing US manufacturing. Even though US manufacturing JOBS are down, manufacturing OUTPUT continues at a high level because of tremendous gains in worker productivity over the past few decades.

    The “Player Piano” effect is nothing new, and it is ongoing: jobs are automated out of existence. (Being in Indy, I just couldn’t help the classic Vonnegut reference.)

  23. John Morris says:

    Perhaps one thing the data shows is that looking just at per capita numbers can be misleading if an area is attracting lots of new people.You have to look carefully over a long time.

    Or have we just tossed the mobility bank hoopla out the window?

  24. Chris Barnett says:

    Yes, growth in GDP per capita is a misleading economic indicator. For instance, it has Buffalo ranking high.

    Apparently the manufacturing that remains there is high-value, low-labor. Great for America, but it does nothing for employment or attracting people to Buffalo.

    “Economic growth” and “employment growth” are not directly correlated at the macro (US), mezzo (regional) or micro (firm) levels. There is almost always a time lag from the nadir of a recession, when GDP starts growing again, to employment growth. And in the last recession (2001-2) it was a weak correlation and very time-lagged.

  25. John Morris says:

    Also, I think they don’t even count this stuff right. Up until recently retail sales were counted as GDP–even though a huge percentage is imported goods.

    I’m pretty sure of this.

  26. Alon Levy says:

    To clarify: GDP includes the profits of corporations headquartered in the region, and not just personal income. This can seriously skew the numbers in areas with lots of corporate headquarters, or with commuter inflows (since GDP is based on where the income is earned, not where the earner lives). If you look at inner-city GDP per capita, it’s often off the charts, even if the people are poor – the income of suburban commuters counts and so does that of corporate HQs, but the people earning it aren’t in the denominator. The same is true if you look at countries that have attracted foreign investment with their low taxes. Singapore has far higher GDP per capita than you’d expect based on personal income, and so did pre-recession Ireland.

    Upstate New York has increased not just GDP per capita but also per capita income. The manufacturing there has not been hit as hard as the Midwestern auto industries; the entire string of cities from Buffalo to Albany is faring relatively well in the recession. But much of it is rebound – the region’s per capita income went down from around 110% the national average in the 1960s to 85% in the early 2000s.

  27. Chris Barnett says:

    Alon, part of the upstate NY equation is population/employment levels.

    Again: if population decreases or holds steady, and employment holds steady or declines while productivity increases, output per worker increases, firms eventually raise wages for the remaining workers; GDP, GDP per capita, and per capita income can all rise under those circumstances.

    But if it is not creating new jobs and attracting new residents, a region can look “good” even as it empties out.

  28. Greg says:

    Being from Buffalo, I can only guess (and I mean guess) on a couple reasons why we could have possibly gotten on this list:

    1) Due to our losses in our manufacturing base decades ago, we were mostly unscathed by the recession. Our major employer in the metro is the University at Buffalo (a public university). UB has been building a Downtown Buffalo Medical Corridor, although in its infant stages, has pooled resources with other bio-medical facilities moving to the same location. The Buffalo Niagara metro has also brought in a new major companies to Buffalo. Labatt (Rust Belt rejoice) moved its North American Headquarters to Buffalo.

    2) The more reasonable explanation why we’re on the list is because people are leaving, but quality jobs are staying. Odd sounding, I know. Perhaps, the jobs lost in Buffalo that we hear about, are lower GDP producing jobs. The ones that are retained are higher GDP producing (thus, Buffalo Niagara Medical Campus). This would most likely explain why we’re high on the list.

  29. Tommy says:

    @Steve Lafleur: What Urbanophile said. Also, as a “PDX stereotype,” I’ll say this: Of *course* Nike, Intel, HP, et al are outside of town. Huge corporations such as these love taking advantage of the infrastructure built by core cities, but hate contributing taxes to support them. That’s the free market for ya, isn’t it?

    Oh, and what Noah said. Get your facts right next time.

  30. Ross says:

    Portland has a very very strong creative class, and like many Pacific NW cities (seattle, vancouver canada) generally shun big chains which results in very high rates of small business ownership. Portland however takes thing further than either of them. I remember reading somewhere that more Portlanders are self employed than in any other major city.

    Factor in all the bike stuff and the anti sprawl measures, etc etc, and what you see is that Portland’s so called ‘anti business’ approach has created real wealth for the people who live there. Plus it has a sort of ‘cool’ reputation that attracts a lot of migration. I myself, have been thinking about eventually moving there.

    There main downfall is the incredible amount of homelessness within the city core, but that’s primarily a result of having very generous programs in place, which results in homeless migrating there. Seattle also has this problem to a less extent.

  31. EngineerScotty says:

    I wouldn’t go so far as to say Portland “shuns” big chains–there’s plenty of Costcos and Targets and Starbucks and McDonalds and XXX Depots and YYYs’r’us and Gaps and Banana Republics and such to go around. The City of Portland has managed to limit the encroachment of WalMart to some extent (there’s one out near 82nd and Holgate; the rest are out in the ‘burbs), and there’s a good-size “hate the chains” demographic within town, but if chain-store shopping is your thing, there’s lots of opportunity to do so.

  32. Tommy says:

    Yeah, I kind of agree with both of you. Portland’s strong stance against the large-scale business model (or rather, *perceived* stance against such… as Scotty points out, it’s not quite all that it’s cracked up to be) does attract the sort of creative types that start small businesses, or start-ups, or hare-brained schemes, or whatever you want to call them. That’s become harder to do, of course, since the tech crash of ’01 and the more general economic collapse of ’08… Nowadays the artsy types who move here wind up working in a coffee shop and setting up an Etsy account to sell their wares (note to those thinking of moving here: have a job in place before you do, or come to town with a buttload of cash)… But it still happens nonetheless, and it’s nice to have the creative capital in place in the event that the economy should actually recover at some point. But Portland is more than just a cool city, it’s a metropolitan area, and we do have suburban… infrastructure, if you want to call it that… So you can still feed your Home Depot jones when it becomes necessary, buy a relatively cheap house, put your kids in decent schools, etc. We’re like anywhere else, really. Something for everyone.

  33. ML says:

    For 30 years the sprawl lobby has been telling us that Portland’s way leads to economic stagnation, while Atlanta is a role model. I guess Portland has the REAL “New Geography”!

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