The nation’s largest metropolitan areas would be nowhere, economically, without the rest of the world.
The Great Recession took a bite out of economic output as measured by gross domestic product. But from the recession’s end in 2009 through last year, output has recovered and grown, thanks in no small part to exports, which accounted for 54 percent of output growth in the nation’s top 100 metropolitan areas and more than a third of output growth nationally, according to a new Brookings Institution report.
“It’s a real economic opportunity that we need to be focused on,” says Brad McDearman, director of the Metropolitan Export Initiative with Brookings’ Metropolitan Policy Program.
In 11 metro economies, post-recession output growth relied totally on exports, which served as a counterbalance to shrinking non-traded industries. In Harrisburg, Penn., for example, total economic output grew by just $25 million, while exports grew by about $325 million. About a fifth of that export growth came from the nonferrous metal industry. Exports in the Las Vegas grew by $1,495 million, while output overall grew just $410 million. More than a third of the export growth there came from accommodation services.
If focusing on metropolitan areas seems limiting, consider that the 100 largest metros produce roughly 75 percent of national economic output, according to Brookings. In other words, those regions — economic networks centered on, but not limited to, major cities — are vital.
More than a quarter — 28 percent — of all exports last year came from just 10 metro areas: Los Angeles, New York, Houston, Chicago, Dallas, Seattle, San Francisco, Detroit, Boston and San Jose.
The report is part of a broader initiative to help metros take more advantage of the opportunity that exports represent, McDearman says.
“Part of the goal of this is to help these metros understand that they know their companies better than anybody,” McDearman says. As such, Brookings partnered with four metro areas in 2011 to produce export plans — which are being implemented — based on what metro officials can do to help their regions better exploit export opportunities. Thanks to a recent investment from JPMorgan Chase, Brookings is working to expand the program to 28 cities.
Portland, one of the first four pilot cities, was the nation’s 11th-largest metro exporter last year, with almost exactly two thirds of those exports coming from the computers and electronics industry. Brookings worked with the metro area to both protect that industry and to diversify. Officials decided to take advantage of the region’s green reputation and expertise and created “We Build Green Cities,” a partnership of companies. In April, a group of Portland companies went on a trip to Japan to spread the word.
“There’s a mix of goods and services around a cluster that Portland says is us, that’s who they are,” McDearman says.
Despite the strong export growth across the top metro areas, only 12 are on track to meet the Obama administration’s national goal of doubling exports from 2009 through the end of 2014, Brookings found. Still, a growing global middle class means that demand for the goods and services U.S. metros can provide is almost certainly going to grow, McDearman says.