Total real Gross Metropolitan Product grew 2.5% in U.S. metropolitan areas in 2012, according to a report prepared by IHS Global Insight for the U.S. Conference of Mayors and the Council on Metro Economies and the New American City.
The report, entitled “Metropolitan Economies and Gross Metro Product,” showed that growth expanded in 290 metros out of 363 last year, up from 265 areas in 2011.
But IHS is forecasting the GMP growth of the 363 metros will drop to 1.6% this year, with only 244 of the metro areas seeing positive real GMP growth in 2013. This contrasts to expectations for a 1.7% rise in the nation's real GDP this year.
U.S. metropolitan areas usually a larger city and its suburbs - are the engines of growth both domestically and globally. New York is the 13th largest economy in the world, ahead of Spain, Mexico and South Korea, which all have GDPs in excess of $1 trillion. Houston ranks 30th and Dallas 32nd, while Philadelphia, San Francisco and Boston are 40th, 41st and 42nd. Out of the 100 largest economies in the world, 36 of them are metropolitan areas in the United States.
In 2012, most GMP gains were seen in the Midwest -Elkhart-Goshen, Ind., Columbus, Ind., Kokomo, Ind., and St. Joseph, Mo., all saw GMP increased of more than 7%. The Midwest is feeling the benefits of a rebounding manufacturing industry, especially in automobile production.
Texas was also well represented on the Top 10 list in 2012. Midland finished first (14.4% growth) while Odessa (14.1%) and Victoria (8.7%) made the grade. Growth in the Lone Star state was fueled by the surging energy markets.
Metro areas play a crucial role in the U.S. economy, but ongoing problems in Washington combined to blunt much of their gains.
“The impact of sequestration, the federal shutdown, and tepid economic growth in Europe has hindered the U.S. economy this year,” the report states. “Employment will grow only 1.5%, real gross product will expand by 1.7% and real income will rise by 1.4% - with metropolitan areas again providing the vast majority of that growth.”
Last year, 92.3% of the jobs added and 89.2% of growth in in real GDP happened in metro areas, according to the report. But in 2013, the nation’s metropolitan areas will contain 86% of total U.S. non-farm employment, 90% of real GDP and 85.7% of our country’s population.
However, in 2014, once the restraints of the government shutdown and sequestration are removed, IHS anticipates improvements across each of these indicators as metro economies spearhead economic progress.
