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Yahoo
2 days ago
- Business
- Yahoo
Inside the success of America's growing cities like Phoenix, Nashville
Nashville and Phoenix landed high on a list of large U.S. cities expected to continue growing in 2025 even amid fears of a national recession. Controversial tariffs, immigration policies and shrinking federal spending have created uncertainty and may slow growth, but the top performing cities still are expected to continue to make gains, economist Gerald Cohen told the USA TODAY Network. "Job creation continues to look fairly healthy," he said. "Despite a lot of smoke, there wasn't a lot of heat on the economy." Cohen, chief economist of the Kenan Institute of Private Enterprise at the University of North Carolina, led the team of researchers who forecasted the top midsize and large cities that are projected to continue growing in the report "Empowering American Cities." The yearslong project is a partnership between the institute and Fifth Third Bank and, unlike many other published lists of growing cities, it takes a deeper dive into a variety of economic drivers beyond just population increases. Among large cities, Austin tops the institute's list of growing cities, while Nashville is listed as No. 5, largely due to its thriving music and entertainment industry as well as its status as a national health care hub. Phoenix, home to a hearty real estate market, landed at No. 10. Among midsize cities, Amarillo, Texas, took the top spot for projected growth, while Des Moines ranked fourth. Florida's Space Coast, referred to in the study as Palm Bay, took the No. 10 spot. A key driver for Des Moines is its position as a financial hub. The Space Coast is anchored by engineering, manufacturing and defense work. USA TODAY Network reporters who live and work in cities that made the list took a close look at their hometowns' unique paths to success — and how fellow residents have benefited or suffered along the way. The Kenan Institute team defined and analyzed "economic orbits," called Extended Metropolitan Areas, which can reach beyond the geographic borders of the U.S. Census' Metropolitan Statistical Areas. The orbits include cities, towns and counties with interlinked economies. Growing cities — including Phoenix and Nashville — have "exurbs" with jobs, homes and amenities up to 100 miles from the city center to attract a labor force that prefers working from home, according to the institute's findings. That's part of a post-pandemic trend expected to continue. Other factors driving the top cities' growth, according to the institute's findings, include: affordable housing, green space, the absence of a state income tax, walkable neighborhoods and warm weather. Cohen, also a research professor of finance, said it's too early to gauge the impact of ongoing policy changes initiated by President Donald Trump, including significant cuts to scientific research funding through the National Institutes of Health, which could impact Nashville, home to the corporate headquarters of HCA and research hospitals. Evolving immigration policies and historic tariffs, including on goods from Mexico and Canada, could impact supply chains and workforces, helping drive up the costs of cars and other products and slowing consumer spending. "We need foreign-born workers if we want to continue to grow the economy," Cohen said. "Research is very strong in saying that foreign-born workers are additives to the economy. They're doing jobs that we, the native-born population, wouldn't do." The project also examines a city's ability to attract and retain workers as well as their productivity. Nashville, known as Music City, has the nation's highest input-per-worker rate in the leisure and hospitality category, Cohen said. "It's double the U.S. productivity rate, and it's 20% higher than No. 2, which is Las Vegas," the economist said. In Nashville, the economic output, adjusted for inflation, is greater than $100,000 per worker in the leisure and hospitality fields, compared to the U.S. average of $50,000, Cohen said. Productivity gains are typically attributed to three things: better skilled people, either by hiring more skilled workers or by providing additional training for existing staff; upgraded technology or equipment; and innovation. Des Moines beat out New York City as the city with the largest percentage of its gross domestic product, or economic output, coming from the financial sector, Cohen said. Iowa's capital has a thriving market in banking and insurance, driving finance to capture a nearly 26% slice of its GPD, compared to the national average of just over 7%. Des Moines beat out all 150 cities studied. Florida's Space Coast, home to the Kennedy Space Center, is midsized but ranked No. 6 in terms of manufacturing durable goods out of all 150 cities studied. The area makes everything from boats and electronics to explosive-detecting robots for the military and materials for rockets that can withstand extreme environments. During the past decade, the Space Coast's manufacturing sector grew at an annual rate of nearly 9%, compared to the national average of slightly more than 1%, Cohen said. A robust commercial and residential real estate market along with a successful insurance sector help drive the economy in Phoenix. The area has the fifth largest real estate sector of the 50 large cities studied. Commercial and residential real estate constitutes more than 17% of the area's GDP, compared to the national average of less than 14%. April's median home price in the Valley of the Sun came in at $445,000, about $30,000 more than the national median existing-home price. The Phoenix area's population growth rate is more than 4% annually, double that of the national average. "What's notable about the area, it's got a nice combination of both influx of people and increases in productivity, which is driving the economy," Cohen said. "That's been the special sauce there." This article originally appeared on USA TODAY: Why Phoenix, Nashville, Des Moines, Space Coast are still up & coming
USA Today
2 days ago
- Business
- USA Today
Inside the success of America's growing cities like Phoenix, Nashville
Inside the success of America's growing cities like Phoenix, Nashville Nashville and Phoenix landed high on a list of large U.S. cities expected to continue growing in 2025 even amid fears of a national recession. Controversial tariffs, immigration policies and shrinking federal spending have created uncertainty and may slow growth, but the top performing cities still are expected to continue to make gains, economist Gerald Cohen told the USA TODAY Network. "Job creation continues to look fairly healthy," he said. "Despite a lot of smoke, there wasn't a lot of heat on the economy." Cohen, chief economist of the Kenan Institute of Private Enterprise at the University of North Carolina, led the team of researchers who forecasted the top midsize and large cities that are projected to continue growing in the report "Empowering American Cities." The yearslong project is a partnership between the institute and Fifth Third Bank and, unlike many other published lists of growing cities, it takes a deeper dive into a variety of economic drivers beyond just population increases. Among large cities, Austin tops the institute's list of growing cities, while Nashville is listed as No. 5, largely due to its thriving music and entertainment industry as well as its status as a national health care hub. Phoenix, home to a hearty real estate market, landed at No. 10. Among midsize cities, Amarillo, Texas, took the top spot for projected growth, while Des Moines ranked fourth. Florida's Space Coast, referred to in the study as Palm Bay, took the No. 10 spot. A key driver for Des Moines is its position as a financial hub. The Space Coast is anchored by engineering, manufacturing and defense work. USA TODAY Network reporters who live and work in cities that made the list took a close look at their hometowns' unique paths to success — and how fellow residents have benefited or suffered along the way. Examining broader regions The Kenan Institute team defined and analyzed "economic orbits," called Extended Metropolitan Areas, which can reach beyond the geographic borders of the U.S. Census' Metropolitan Statistical Areas. The orbits include cities, towns and counties with interlinked economies. Growing cities — including Phoenix and Nashville — have "exurbs" with jobs, homes and amenities up to 100 miles from the city center to attract a labor force that prefers working from home, according to the institute's findings. That's part of a post-pandemic trend expected to continue. Other factors driving the top cities' growth, according to the institute's findings, include: affordable housing, green space, the absence of a state income tax, walkable neighborhoods and warm weather. Cohen, also a research professor of finance, said it's too early to gauge the impact of ongoing policy changes initiated by President Donald Trump, including significant cuts to scientific research funding through the National Institutes of Health, which could impact Nashville, home to the corporate headquarters of HCA and research hospitals. Evolving immigration policies and historic tariffs, including on goods from Mexico and Canada, could impact supply chains and workforces, helping drive up the costs of cars and other products and slowing consumer spending. "We need foreign-born workers if we want to continue to grow the economy," Cohen said. "Research is very strong in saying that foreign-born workers are additives to the economy. They're doing jobs that we, the native-born population, wouldn't do." Productive workforces The project also examines a city's ability to attract and retain workers as well as their productivity. Nashville, known as Music City, has the nation's highest input-per-worker rate in the leisure and hospitality category, Cohen said. "It's double the U.S. productivity rate, and it's 20% higher than No. 2, which is Las Vegas," the economist said. In Nashville, the economic output, adjusted for inflation, is greater than $100,000 per worker in the leisure and hospitality fields, compared to the U.S. average of $50,000, Cohen said. Productivity gains are typically attributed to three things: better skilled people, either by hiring more skilled workers or by providing additional training for existing staff; upgraded technology or equipment; and innovation. Surprising finance hub Des Moines beat out New York City as the city with the largest percentage of its gross domestic product, or economic output, coming from the financial sector, Cohen said. Iowa's capital has a thriving market in banking and insurance, driving finance to capture a nearly 26% slice of its GPD, compared to the national average of just over 7%. Des Moines beat out all 150 cities studied. Robots help propel this city's growth Florida's Space Coast, home to the Kennedy Space Center, is midsized but ranked No. 6 in terms of manufacturing durable goods out of all 150 cities studied. The area makes everything from boats and electronics to explosive-detecting robots for the military and materials for rockets that can withstand extreme environments. During the past decade, the Space Coast's manufacturing sector grew at an annual rate of nearly 9%, compared to the national average of slightly more than 1%, Cohen said. Selling the Valley of the Sun A robust commercial and residential real estate market along with a successful insurance sector help drive the economy in Phoenix. The area has the fifth largest real estate sector of the 50 large cities studied. Commercial and residential real estate constitutes more than 17% of the area's GDP, compared to the national average of less than 14%. April's median home price in the Valley of the Sun came in at $445,000, about $30,000 more than the national median existing-home price. The Phoenix area's population growth rate is more than 4% annually, double that of the national average. "What's notable about the area, it's got a nice combination of both influx of people and increases in productivity, which is driving the economy," Cohen said. "That's been the special sauce there."
