November 24, 2009
Forbes: America's Fastest-Recovering Cities
Forbes.com has an article about the areas that are doing the best at weathering or recovering from the recession. Omaha comes out on top, and Texas cities do quite well too.
Though Omaha, Neb., seems second-rate to some, Warren Buffett may have been on to something when he chose it for the headquarters of his massive holding company,
Berkshire Hathaway. According to our research, the city has hit upon a formula to weather the economic downturn better than any other in the country.
While no region has escaped the recession, in Omaha, three Texas metros, a handful of Northeastern manufacturing bases and select southern cities, diversified industry and relatively stable housing fundamentals have provided local residents with comparatively secure standards of living.
View the complete list here. Top 10: (1) Omaha; (2) San Antonio; (3) Austin; (4) Pittsburgh; (5) Harrisburg; (6) Dallas; (7) Rochester; (8) Houston; (9) Raleigh; and (10) Baton Rouge.
I'm not surprised to see Omaha and the Texas cities on the list. Two things are worth noting, though. First, the presence of a number of northeastern cities on both the top 10 and the full list: Pittsburgh, Harrisburg, Rochester, etc. These older northern industrial cities have been considered to be in decline for a while. Could it be that they are doing relatively OK because they may have already hit their low points--having been left behind during the last two bubbles, they might be stable?
Secondly, you don't see many "sun belt" cities--which have dominated the growth charts in the last two decades--near the top, outside the Texas triangle (and Raleigh in the Research Triangle). We all know that Arizona, Nevada, and Florida are among the places hardest hit by the mortgage crisis. Does this support the nascent idea that the sun belt is giving way as a geographic identifier to the Zone of Sanity? According to Joel Kotkin, the Zone of Sanity encompasses the vast middle of the country, from Minnesota to Texas, that was largely ignored by the bubble and is doing relatively well in the aftermath.
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The list contains methodological issues which limit its usefulness in determining the "fastest recovering cities".
The most outstanding issue is the use of "levels" of economic indicators to measure recovery, as opposed to their changes. The current unemployment rate, for example, has nothing to do with how quickly the labor market situation has improved, which is more accurately reflected by CHANGES in the unemployment rate. Low unemployment rates might be a good measure of the "most stable cities", but not the "fastest recovering".
* Omaha, NE, Unemployment Rank No.1: went from 5.3% unemployment to 4.8% unemployment, a change of -0.5%.
* Wichita, KS, Unemployment Rank No.42: went from 10.0% to 8.6%, a change of -1.4%.
Which city "recovered fastest"? Wichita.
We detail the fastest growing cities in terms of growth in labor demand on our blog, here:
http://hdi.wantedana lytics.com/2009/12/01/forbes-list-of-americas-fa stest-recovering-cities-not-a-good-list-for-job-seekers/
Posted by: Thibault | Dec 1, 2009 12:14:40 PM