The Milken Institute releases an index report each year of the ‘Best-Performing Cities” across 400+ metropolitan areas in the U.S. The process of developing this report includes research into job growth/creation, fluctuation in wages, and even high-tech GDP growth. Their team then compares these trends to each other to map out how individual cities drive economic growth across the country.
In 2021, a significant number of top-performing cities among large metros came from the Intermountain West. This includes cities like Provo, Salt Lake, Ogden, Boise, Phoenix, Denver, and Fort Collins. “These cities registered levels of wage and job growth that were far above the national median. And they also had relatively affordable housing costs and very high levels of broadband access, indicating inclusive growth based on housing and infrastructure investment.” – Milken Institute
Economic Indicators
- Job Growth: Ranked 14th. +17.6% (2014-19)
- Job Growth: Ranked 6th. +3.3% (2018-19)
- Wage Growth: Ranked 27th. +34.2% (2014-19)
- Wage Growth: Ranked 15th. +7.3% (2018-19)
- Short-Term Job Growth: Ranked 24th. -2.5% (10/2019-10/2020)
- High-Tech GDP Growth: Ranked 61st. +37.1% (2014-19)
- High-Tech GDP Growth: Ranked 54th. +6.9% (2018-19)
- High-Tech GDP Concentration: Ranked 47th. LQ: 1.04 (2019)
- Number of High-Tech Industries: Ranked 37th. 7 (2019)
- Households with Broadband Access: Ranked 67th. 89% (2019)
- Households with affordable housing costs: Ranked 103rd. 69.2% (2014-18)
- Households with affordable housing costs: Ranked 98th. 71.4% (2019)
Assets
- Strong population and employment growth fuel economic prosperity and in-migration.
- The region continues to diversify its high-tech industrial base.
Phoenix, Arizona Ranks Number 7
To summarize some of the rankings below, Phoenix has continued in its strong path of growth. Since last year’s report, the Phoenix Valley has notched in 6th place standing for on-year job growth and 15th place for wage growth. There are also strong hints of a growing high-tech economy as they land the 37th place spot. High-tech GDP growth moved up five ranks compared to last year.
Where could they improve? According to Milken, if Arizona wants to rank higher in the future index, “a deeper investment in nascent subsectors with an LQ close to one, such as communication equipment manufacturing (LQ of 0.94) and computer systems design (LQ of 0.92), would further strengthen the region’s high-tech foothold and provide opportunities to improve in the index.”
Low costs of living continued to attract vast groups of in-migration from Western states in the past few years. As of September 2020, total housing permits in the Phoenix MSA were up 29.9% YoY, despite weaker construction activity during the pandemic.
How is the rental economy looking? In 2019, Phoenix rents grew as much as 7% YoY, while home values in the city rose 5.8%. Milken Instutute estimates that proactive investment in affordable housing stock could provide the exact relief Phoenix needs in order to avoid becoming a victim of its own success.
Source: Milken Institute Report 2021