5. Sioux Falls This South Dakota small city is picking up population, a far cry from the out-migration of years past. There's a skilled work force for financial and professional services and an emerging information and biological sciences sector. Both are attracting investment dollars.
6. Waco, Texas
7. Burlington, Vermont
8. Dutchess County, New York
9. Anchorage, Alaska
10. Manchester, New Hampshire
11. Bismarck, North Dakota
12. Bryan-College Station, Texas
13. Danbury, Connecticut
14. Altoona, Pennsylvania
15. Fargo-Moorhead, North Dakota
16. Las Cruces, New Mexico
17. La Crosse, Wisconsin
18. Newburgh, New York
19. Albany, Georgia
20. Medford, Oregon
21. Utica-Rome, New York
22. Lake Charles, Louisiana
23. Bristol, Virginia
24. Fort Smith, Arkansas
25. Enid, Oklahoma
10 Worst Metro Areas
These large cities suffer from unaffordable housing, overreliance on single industries, and often, poor quality of life for the middle class upon whom entrepreneurs rely.
1. San Jose Silicon Valley's decline is a tale of hubris, bad timing, high costs, and overconcentration in high tech. San Jose still has massive talent and a great infrastructure for high-tech entrepreneurs, but a view toward diversifying the economy seems long overdue.
Grand Rapids(2), Greenville-Spartanburg(3), Dayton(4), Rochester, N.Y.(5), Milwaukee(12) Pick your poison: metal furniture, auto parts, textiles, fiber optics. These cities all were huge losers in the manufacturing decline of the past five years, a reversal that seems very slow in ending. All these areas are victims of the rise of offshore manufacturing in China and Mexico.
New York City(6), San Francisco(7), Boston(9) Call these the lost "bubble children" of the 1990s. Pumped up on dot-com steroids, these areas neglected to keep costs down and thought the high-tech/financial service nexus would sustain their growth. It didn't, as jobs in these industries dropped precipitously, particularly after 2000. The Big Apple, with its immigrant base and strong cultural industries, is far from dead but the new growth seems to be heading to the ex-urbs.
Portland(8), Raleigh-Durham(13) These towns have been "cities of the future" for years. Too bad the future is more complicated than envisioned. High costs and the antibusiness mood in Portland has hurt it. Raleigh-Durham's overconcentration on tech is a problem, but the basic cost structure is still not impossible. Bet on a better showing from the Carolina region within a year or two.
Philadelphia(10), Hartford(11) Two long-term losers in terms of jobs and population remain down on the list. Glittery recovery of Philadelphia's downtown has not made up for high costs, political problems, and continued decay in outlying neighborhoods. Hartford's city is still shrinking, and Connecticut remains a fairly expensive place to do business, but the area's bucolic archipelago of small towns and fancy suburbs could recover quickly from the recession.
How The 2004 Top Cities Were Selected
The rankings are derived from three-month rolling averages of U.S. Bureau of Labor Statistics "state and area" unadjusted employment data reported from January 1993 to September 2003. The data reflect the new North American Industry Classification System categories, including total nonfarm employment, manufacturing, financial services, business and professional services, educational and health services, information, retail and wholesale trade, transportation and utilities, leisure and hospitality, and government.
All areas for which full data sets and uniform area definitions were available from the BLS for the past 10 years--277 regions in total--were included in the analysis. This approach excluded construction sector data, which was not reported for many of the regions in the BLS database, and the Denver and Boulder areas, which were redefined in January 2003.
"Large" areas include those with a current nonfarm employment base of at least 450,000 jobs. "Medium" areas range from 150,000 to 450,000 jobs. "Small" areas have as many as 150,000 jobs. The growth index is calculated from a normalized, weighted summary of: 1) the current year's employment growth rate (weighted by two points); 2) the sum of 1998-2003 and 1993-1998 employment growth rates multiplied by the ratio of the 1993-1998 growth rate over the 1998-2003 growth rate (two points); and 3) the difference between the current year's growth rate and the average 2000-2003 growth rate (half a point).
The balance index is calculated from a normalized, weighted summary of: 1) the standard deviation of each area's current percentage mix of major employment sectors (one point); 2) the standard deviation of each area's percentage of total 1998-2003 growth generated by each sector (one point); and 3) the standard deviation of each sector's recession period (2000-2003) growth rate (half a point).
To compute the final rankings, the growth index was weighted by 4.5 of a total of seven points, and the balance index by 2.5 of seven points. Full growth and balance index data for all 277 regions can be found on Inc.com. -David Friedman
