LOS ANGELES--(BUSINESS WIRE)--Provo-Orem, Utah has demonstrated the best economic performance among large cities according to the 2021 Milken Institute Best-Performing Cities Index. Idaho Falls, Idaho moves up six spots to top the list among small cities. The Index, published annually since 1999, offers a first look at how the pandemic has impacted regional economies across the country.
Provo-Orem, which ranked second in 2020, has been a recipient of the tech sector’s out-migration from the more expensive coastal cities of California. A relatively new innovation center with significantly lower costs than Silicon Valley or Silicon Beach, Provo-Orem has attracted tech giants including Qualtrics, Vivint, and SmartCitizen, among others.
“We’re incredibly heartened by the resilience and economic strength we’re seeing in many Utah cities and towns as the Milken Institute Best-Performing Cities Index shows,” said Gov. Spencer Cox of Utah. “We’re optimistic that this trend will continue and expand to all areas of our state.”
New this year, the Milken Institute added housing affordability and broadband access as rankings variables in an effort to more effectively reflect the inclusiveness of local economies.
“The pandemic has had an outsized impact on cities where the economic effects of the current recession are exacerbated by high housing costs,” said Kevin Klowden, executive director of the Milken Institute Center for Regional Economics and California Center. “By measuring for factors such as jobs, wages, and high-tech growth, the Best-Performing Cities Index offers analysis of how metro areas have fared based on the resilience of their local economy. And by incorporating data designed to gauge inclusivity, it provides important insights into how cities will be prepared to meet challenges and opportunities for future growth post-pandemic.”
Also new this year, cities have been grouped into five tiers, offering policymakers, business leaders, and residents the ability to more easily compare their economic performance to their peers.
Key findings from the 2021 Best-Performing Cities Index include:
- Provo-Orem, Utah, moved up one spot to No. 1 among large cities. The area had high one- and five-year job growth and benefited from a number of high-tech industries. Palm Bay-Melbourne-Titusville, Florida; Austin-Round Rock, Texas; Salt Lake City, Utah; and Raleigh-Cary, North Carolina round out the top five, respectively.
- California’s usual standouts, including San Jose and San Francisco, fell out of the top five to place at No. 24 and No. 22, respectively. In last year’s rankings, San Francisco topped the list for best-performing large cities, and San Jose tied at No. 5, but high housing costs and a decline in short-term job growth led to their rankings drop this year. The movement is a sign of the pandemic’s impact on so-called “superstar cities.”
- Idaho Falls, Idaho moved up six spots to rank No. 1 among small cities. The area’s high-tech industry presence – which includes employers like the Idaho National Laboratory and Battelle Energy Alliance, LLC – drove job growth and contributed to its strong performance. Following are Logan, Utah-Idaho at No. 2; The Villages, Florida at No. 3; and St. George, Utah at No. 4. Daphne-Fairhope-Foley, Alabama moved up nine rankings to round out the top 5. Overall, these cities benefit from high levels of job and wage growth.
- Large cities in the Intermountain West and South are outperforming many areas on the coasts, mainly due to their higher levels of short-term job growth and more affordable housing. For instance, Salt Lake City moves up 21 spots to come in at No. 4, and Huntsville, Alabama has one of the largest jumps up the rankings. The area moves up 39 spots to round out the top 10 among large cities.
“Being included in the Milken Institute’s Index among small cities comes as a high honor because these rankings are based on meaningful data,” said Idaho Falls Mayor Rebecca Casper. “Idaho Falls has been focused on connectivity and housing—two of the Milken Institute’s new categories for consideration. The pandemic caused everyone to realize how important connectivity is for the future. People need not be tethered to desirable jobs in large cities as they once were; instead, they’re relocating to places like Idaho Falls that give them a better quality of life and a lower cost of living.”
Misael Galdamez, senior policy analyst in the Milken Institute Center for Regional Economics, added: “As we discovered through our rankings, cities perform best when they pursue innovative strategies that allow high-tech industries to grow while still providing affordable costs of living. This alignment provides a foundation for metro areas to become more resilient to economic shocks.”
How We Evaluate Cities:
The Index measures economic vitality in 200 large metropolitan areas and 201 small metropolitan areas using job creation, wage growth, and innovation industry metrics. The 2021 version of the Index emphasizes jobs, wages, and high-tech growth, housing affordability, and household broadband access.
“Best-Performing Cities 2021: Foundations for Growth and Recovery” is co-authored by Misael Galdamez, Charlotte Kesteven, and Aaron Melaas. To view the full report and search the 400 metro areas evaluated, visit https://milkeninstitute.org/reports/best-performing-cities-2021, and follow coverage on Facebook, Twitter, Instagram, and LinkedIn using #BestPerformingCities.
LARGE US CITIES – TIER I
1. Provo-Orem, Utah
2. Palm Bay-Melbourne-Titusville, Florida
3. Austin-Round Rock, Texas
4. Salt Lake City, Utah
5. Raleigh-Cary, North Carolina
6. Boise, Idaho
7. Phoenix-Mesa-Chandler, Arizona
8. Nashville-Davidson-Murfreesboro-Franklin, Tennessee
9. Ogden-Clearfield, Utah
10. Huntsville, Alabama
11. Denver, Aurora-Lakewood, Colorado
12. Fort Collins, Colorado
13. Seattle, Bellevue-Kent, Washington
SMALL US CITIES – TIER I
1. Idaho Falls, Idaho
2. Logan, Utah-Idaho
3. The Villages, Florida
4. St. George, Utah
5. Daphne-Fairhope-Foley, Alabama
6. Coeur d’Alene, Idaho
7. Sioux Falls, South Dakota
8. Sebastian-Vero Beach, Florida
9. Gainesville, Georgia
10. Charlottesville, Virginia
11. Punta Gorda, Florida
12. Bellingham, Washington
13. Bend, Oregon
About the Milken Institute Center for Regional Economics and California Center
The Milken Institute Center for Regional Economics produces research, programs, and events designed to inform and activate innovative economic and policy solutions to drive job creation and industry expansion. For more information, visit https://milkeninstitute.org/centers/center-for-regional-economics.
About the Milken Institute
The Milken Institute is a nonprofit, nonpartisan think tank that helps people build meaningful lives in which they can experience health and well-being, pursue effective education and gainful employment, and access the resources required to create ever-expanding opportunities for themselves and their broader communities. For more information, visit https://milkeninstitute.org/.