Metro Areas Drive Economic Growth

Tell me again. Are cities important to the global economy? Global Insights recently released its updated analysis of the role of U.S. metro areas in the economy for the U.S. Conference of Mayors. It is a must read. You can download it free here. This version includes an analysis of industry clusters in several metro areas.

Here are a few of the many findings of the analysis.

Metro areas account for over 84% of national output, driving the economic performance of the nation as a whole. Of the 319 metro areas, 294 showed growth in inflation-adjusted output in 2002, but only 43% grew faster than the national average. In total, metro areas only grew by 1.8% after inflation in 2002. Non-metro area growth was faster than metro area growth in 2002, as the total economy expanded by 2.4%.

Metro areas accounted for 85.6% of production of goods and services in 2002, the same asin 2001. Over the past 10 years, metro economy output increased from $5.2 trillion to $9.1 trillion, an average annual increase of 5.6%. The share of the nation's output accounted for by metro economies increased from 84.5% in 1992 to 85.6% in 2002. Global Insight expects the contribution of metro areas to the national economy to continue to rise over the 25 years, as metro areas remain the focal point of economic activity. Global Insight predicts that metro areas will account for 87.3% of national activity in 25 years, up 1.7 percentage points from 2002.

These are very significant numbers indeed.