Nearly all U.S. cities will grow in 2014
WASHINGTON – Jan. 24, 2014 – The U.S. economic expansion will be much more broadly shared among the nation’s cities and metro areas this year than it was in 2013, the U.S. Conference of Mayors says in a new report.
All but seven of the nation’s 363 metropolitan areas will see their economies grow this year, compared with 97 areas whose economies contracted in 2013, according to the report, done by IHS Global Insight. It was released Wednesday at the mayors’ conference in Washington.
IHS forecasts 340 areas will see economies grow at least 1 percent, up from 183 last year. Of those, 69 areas will grow 3 percent or faster. “We’re finally on an upward trajectory with good job growth,” said Jim Diffley, a senior director at IHS and lead report author. “The recovery has started to affect substantially everywhere.”
Naples, Fla., will be the fastest-growing metro area in the country, with an economy expanding by 6.3 percent, the report says. Naples will also add jobs faster than any other metro, the report predicts. Among larger cities, top performers include Raleigh, N.C., expected to grow by 4.2 percent; Atlanta, 3.7 percent; and Austin, at 3.6 percent.
The forecast calls for turnarounds in cities hit hard by the decline of manufacturing or the housing bust.
Youngstown, Ohio, and Buffalo will return to growth this year, and boost their economies by 1.5 percent in Buffalo and 1.6 percent in Youngstown, IHS predicted.
“The key thing in the northeast was the stabilization of housing,” Diffley said. “When prices normalized and people weren’t underwater any more, small but positive job growth has been able to stimulate spending.”
College towns will thrive, and mega-cities, not so much, the report predicts. New York, Chicago and Los Angeles will grow more slowly than the national average. But Austin, Charlottesville, Va., Lawrence, Kan., and other college towns will outpace the nation.
The slow growth in mega-cities reflects the fact that many recovered all local jobs lost in the recession before 2013, Diffley said.
The report says the economy will grow about 2.7 percent for the year.
The biggest turnaround will come in Shreveport, La., which the report says will grow by 1.6 percent after shrinking by 5.2 percent last year.
Last summer, the mayors’ economic report said more than half of U.S. metros wouldn’t regain all the jobs lost in the 2008 recession until 2015 or later. The difference this time is that IHS and the mayors now have more confidence because of the calming of economic tensions in Europe and budget compromise in Washington, Diffley said.
“Two thirds of metros have still not gotten back to 2007 or 2008 peak levels of employment, and half of those won’t get there for another three years,” he said. “Financial crises do not produce normal recessions in the U.S.”