Gross Metropolitan Product Growth Slows in 2013, Report Finds
A new study finds a slowdown in economic growth for metro areas this year. View data showing projections for more than 300 areas.
Many metropolitan areas hit a bump in the road to economic recovery this year, a report released Monday finds.
The study conducted by IHS Global Insight for the U.S. Conference of Mayors finds a slowdown in economic growth, with the aggregate real gross metro product (GMP) for 363 areas examined projected to rise only 1.6 percent this year after climbing 2.5 percent in 2012.
More metro areas this year appear headed in the wrong direction. The analysis forecasts 119 metros (about a third of all examined) will record flat or negative economic growth, compared to 73 metros last year. Several mostly smaller metro area economies slated to decline after expanding last year include Casper, Wyo., Muncie, Ind. and Prescott, Ariz.
IHS forecasts economic output will rise in 244 metros this year, led by oil-rich Midland (7.3 percent GMP growth) and Odessa, Texas (6.4 percent GMP growth). Some areas hit particularly hard by the housing bubble, such as San Francisco, San Jose and Tampa, will also register significant increases in economic output this year, according to the report.
But across most of the country, growth has been tepid. Of the 336 metro areas examined, only 68 are expected this year to record annual growth in real GMP exceeding 2 percent.
Jim Diffley, a chief regional economist for IHS who authored the report, attributed the meager growth rates to a slowdown in the overall national economy and the expiration of the temporary 2 percent Social Security tax cut earlier this year.
While sequestration and the partial government shutdown have, of course, led to reductions in federal spending, the private sector weathered the cuts better than most expected, Diffley said.
For next year, IHS projects aggregate GMP growth to rise 2.5 percent (up from 1.6 percent growth this year).
IHS’s economic models forecast the largest annual GMP gains in 2014 for Kokomo, Ind. (4.7 percent), Fargo, N.D. (4.6 percent), and Bismark, N.D. (4.6 percent).
Much like this year, the recovery at the local level in 2014 will depend, to an extent, on actions lawmakers take in Washington. “Budget negotiations and the debt limit will play a role again in how 2014 plays out,” Diffley said.
The table below shows GMP for 336 areas included in the IHS analysis. Figures for 2011 and 2012 are actual figures compiled by the U.S. Bureau of Economic Analysis; 2013 and 2014 totals represent IHS projections.