Wednesday, September 10, 2008

Milken Institute Rates Anchorage, Alaska As The 63rd Best-Performing Economy Out Of The 200 Largest U.S. Metro Areas Evaluated

The Milken Institute has released the results of a survey of America's economic health, and they assess Anchorage, Alaska as having the 63rd best economic performance out of the top 200 metro areas in the country. This indicates that Anchorage remains in the upper half of economic performers in the country, and is a slight improvement over its 64th-place assessment in 2007. In partnership with Greenstreet Real Estate, Milken ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. The components include job, wage and salary and technology growth. Read Milken's press release HERE.

National media stories of interest published by MarketWatch and Forbes.

View the Milken Report HERE. There is also a separate report for the top 124 small metros, viewable HERE. Fairbanks did not make the 2008 list, although in 2007, it was ranked the 68th best economic performer out of 179 small metros rated. The drop in the number of small metros evaluated is because the Bureau of Labor and Statistics collected data on fewer small metro areas due to funding cuts; Fairbanks was one of those areas sacrificed by BLS.

First, here are the raw categorical rankings for Anchorage:

- Overall ranking: 63rd
- One-year job growth 2006-07: 106th
- Five-year job growth 2002-07: 67th
- One-year wage growth 2005-06: 113th
- Five-year wage growth 2001-06: 38th
- Job growth from 3/2007 thru 3/2008: 84th
- One-year relative high-tech GDP LQ 2007: 94th
- Five-year relative high-tech GDP 2002-07: 77th
- High-tech GDP LQ 2007: 94th
- Number of high-tech GDP LQs over 1 in 2007: 91st

Analysis: Anchorage's strengths were long-term job and wage growth during the first part of the evaluation period. Housing starts and general construction began and accelerated during this period; the voter-approved new convention center and musuem expansion in Anchorage helped fuel the growth. The demand for labor, coupled with an increase in the state minimum wage, also fueled wage growth. However, during the last part of the period, housing starts slowed and foreclosures began to rise, slowing growth in both jobs and wages. A 30 percent hike in the price of natural gas in late 2006 did not help matters. The high-tech sector has weathered these extremes better, with slower but steadier growth.

While the Anchorage Daily News has not yet covered this story, here are some related stories recently published which may add some depth to the Milken Report:

- Who's productive: In 2006, the Alaska GSP totaled $41 billion.
- State foreclosures hit 5-year high: Foreclosures on Alaska single-family houses have hit their highest level in at least five years, according to a recent state report.
-- PDF: Anchorage real estate report
- House prices, sales decline slightly

As for the rest of the U.S., once again, you can find data for the 200 largest metro areas HERE, and the 124 small metro areas HERE. In addition, a Google news search using the phrase "Milken Institute best cities" (without the quotes) will lead you to a host of local stories about the report HERE.

When you review the national list of cities, you will note two common economic denominators; energy and high-tech. Cities at the top of the list excel in either category individually, or both categories combined. But also note that many of the cities at the top are not necessarily considered the most desirable places to live. For example, Houston may have many employment opportunities, but its chaotic zoning laws and increasing diversity may also make it a personally stressful environment. Workplace diversity isn't necessarily that much of a problem, since one doesn't live at work. Residential neighborhood diversity can be the real problem. One must determine whether or not the increased economic opportunity is a legitimate trade-off.

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