For the nation’s metropolitan areas, the economic recovery is projected to slow down this year.
Last year, metros saw 2.5 percent growth, as measured by total real gross metropolitan product. This year, that will likely be something closer to 1.6 percent, IHS Global Insight projects in a report prepared for the U.S. Conference of Mayors and the Council on Metro Economies and the New American City. Economies in 290 metros expanded last year, compared with 265 the year before. But, this year, that number is projected to be 244 (out of a total 363).
“Energy will continue to fuel economic gains, and the metros of Texas will again top the list of fastest growers; this year they will be joined by Fargo and Bismarck, ND both of which are benefiting from booming growth around the Bakken Shale play,” the report’s authors write. Some of the other fastest growers made the list because they fell so far during the recession thanks to the housing bubble.
While many metros will see economic growth, it will be slow-going for much of that group. Some 93 metro areas will see growth of less than 1 percent. And almost exactly one-third—119—will see no or negative growth.
“The impact of sequestration, the federal shutdown, and tepid economic growth in Europe has hindered the U.S. economy this year,” the report’s authors write. “[E]mployment 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.”
Metropolitan areas offer a key insight into the performance of the economy as a whole. Last year, they were home to 92 percent of new jobs and 89 percent of economic growth, according to the report. This year, they are projected to be responsible for 86 percent of new jobs and 90 percent of economic gains—as measured by real gross domestic product growth.
Metro economies are expected to enjoy a broader rebound in 2014, but only if the automatic federal spending cuts under sequestration and the threat of further federal government shutdowns are removed.
“The US economy cannot afford to be stifled or endangered by avoidable, self-manufactured crises similar to that to which it was exposed to in October,” the report concludes.
Take a look at some of the best- and worst-performing metro regions in the map below. (The best are represented by black markers with factory icons; the worst are represented by red icons with white flags.)