GDP Growth in Many Metro Areas Still Stunted From Recession

Real GDP increased in most regions last year, but many have experienced little to no growth since 2007.
by | September 21, 2016 AT 4:00 PM

Most of the nation’s metro areas saw their gross domestic product (GDP) expand last year. But a number of regions still haven't seen their GDP reach pre-recession levels or have reported little growth since 2007, according to new data published Tuesday by the U.S. Bureau of Economic Analysis (BEA).

Nationally, real GDP across all metro areas climbed 2.5 percent in 2015, following an annual increase of 2.3 percent the previous year.

The San Jose-Sunnyvale-Santa Clara, Calif., area saw its inflation-adjusted GDP rise 8.9 percent in 2015, the top year-over-year growth of any metro area with a population exceeding 1 million. Other larger regions with similarly impressive gains include Raleigh, N.C., (7 percent) and San Antonio-New Braunfels, Texas (5.9 percent).

In all, the federal estimates suggest 236 of 382 metro areas recorded increases exceeding 1 percent for the year.

The BEA data further detail individual industries driving the growth in each region.

The professional and business services sector accounted for about a quarter of the year-over-year growth nationally and was responsible for notably large gains in San Jose and other regions. Natural resources and mining helped accelerate GDP in a limited number of regions, particularly Midland, Texas, and Visalia-Porterville, Calif.

Still, over the longer term, another large group of regions registered little to no growth. In nearly half of metro areas, real GDP has increased less than 3 percent since the start of the recession in 2007. (Over that period, the U.S. population has grown by about 6.5 percent.)

One hard-hit region, the Hartford, Conn., area, suffered a 9.5 percent loss since 2007 -- the steepest decline of any larger metro area. Its real GDP has moved little recently after experiencing steady declines starting in 2008.

Las Vegas-Henderson-Paradise, Nev., by comparison, reported stronger growth in 2014 and 2015, but the region's real GDP remains an estimated 6.6 percent below 2007 levels.

Many regions suffering the largest declines since the start of the recession are retirement destinations or those more dependent on tourism. These include places like the Deltona-Daytona Beach-Ormond Beach, Fla., and Hilton Head Island-Bluffton-Beaufort, S.C., metro areas.

Others experienced a sharp downturn in their major industries, such as gaming in Atlantic City-Hammonton, N.J.

The release of the updated data also brought a few changes in metro area rankings.

The Washington, D.C., metro area surpassed Dallas-Fort Worth-Arlington with the nation’s fifth largest GDP. Similarly, San Diego-Carlsbad was barely edged by Phoenix-Mesa-Scottsdale for the 16th largest economy, and Portland-Vancouver-Hillsboro now occupies the 20th slot ahead of the St. Louis metro area.

Metro Area Real GDP Data

This table shows how new 2015 real GDP estimates compare to 2014, 2013 and 2007.

SOURCE: Change in real GDP as reported by BEA. See methodology.