Tuesday, October 7, 2008

Growth in gross metro product

The economy is going through some rough times, and we're all taking hits. So sometimes it's helpful to step back and take a longer view of where we're going. And here's one longer view to consider – gross metropolitan (or domestic) product.

According to figures released by the Bureau of Economic Analysis, four of six Gulf Coast Aerospace Corridor metropolitan areas experienced growth in real GDP between 2002 and 2006, and are among 167 that gained at a pace larger than the 12.8 percent for U.S. metro areas as a whole.

Granted, these figures do not take into account more recent years, but it's the trend that's important. The five-year rankings based on the BEA figures were compiled by the State Science and Technology Institute of Ohio. SSTI said the aggregate GDP for metro areas in current dollars was $11.79 trillion in 2006, about 90 percent of the U.S. GDP.

OK, here are the details.

Florida's Fort Walton Beach-Crestview-Destin MSA, which owes a lot of its GDP to activities at Eglin Air Force Base, had a five-year increase of 24.1 percent, good enough to make it 33rd of the nation's 363 metro areas. Mississippi's Pascagoula MSA, with a growth of 23.2 percent, earned a ranking of 39. Pascagoula can attribute a lot of its GDP to shipbuilders, including Northrop Grumman and VT Halter Marine. It also builds unmanned aerial systems, but that facility did not open until 2006.

Florida's Pensacola-Ferry Pass-Brent MSA had a ranking of 90 with a five-year growth of 17.4 percent. That metro area was hit by Hurricane Ivan in 2004, then nine months later by Hurricane Dennis in 2005, but the GDP growth does not show any letdown associated with those twin storms. Alabama's Mobile MSA is next in the Gulf Coast aerospace region with GDP growth of 13.1 percent and a ranking of 162. In future years, you're likely to see Mobile's GDP go up at a faster pace when some of the big projects the county has won kick in. If the city winds up with the EADS aircraft plant, that will boost it even more.

The only two Gulf Coast aerospace corridor metro areas that grew at a negative rate over the five years were New Orleans-Metairie-Kenner MSA and Gulfport-Biloxi MSA, with rates of -0.7 and -2.3, respectively, and rankings of 345 and 352. But both MSAs were hard-hit by Hurricane Katrina in August 2005. Those two metro areas are in a group of 23 that experienced a decrease over the five years. But SSTI notes that for New Orleans and Gulfport, the reason is related to the natural disaster. The decline in other metro areas may be more systemic as they restructure away from declining industrial sectors.

Now a little perspective.

Other immediate Gulf Coast metropolitan areas also performed pretty well over the five-year period. Lake Charles and Houma-Bayou Cane-Thibodaux, both in Louisiana, had five-year growth of 30.9 and 28.3 percent, respectively, and rankings of 13 and 18, while Florida's Panama City-Lynn Haven had a five-year growth of 26.9 percent for a ranking of 23 – all better than the metro areas of the aerospace corridor. Hattiesburg, home to the University of Southern Mississippi, is ranked 78 with a growth of 18.5 percent, the same rate as Louisiana’s Lafayette MSA – ranked 79. Dothan, Ala., near Fort Rucker, was ranked 122 with a growth of 15 percent.

And how did the nation's science and technology hotspots perform? Well Huntsville, Ala., had a five-year growth of 24.7 percent and a ranking of 31, just a couple of notches above Fort Walton Beach. Silicon Valley’s San Jose-Sunnyvale-Santa Clara grew 21.5 percent and was ranked 49. Two other areas known for their high-tech economies, the Washington-Arlington-Alexandria MSA and Boston MSA, had GDP growth of 18.3 and 9.8, respectively, and rankings of 81 and 207.

Major cities Atlanta and Houston came in at 12.9 and 12.8, respectively, rankings of 167 and 168. Birmingham, Ala., grew its GDP 6.8 percent over the five years and ranked 253.

And state capitals? Louisiana's Baton Rouge MSA grew 21.9 percent over the five years and was ranked 48, while Alabama’s Montgomery MSA had a growth of 11.6 percent and a ranking of 187. Florida's Tallahassee MSA had a rank of 190 and growth of 11.5 percent and Mississippi's Jackson grew 8.6 percent and was ranked 219.

In a posting Sept. 26, I mentioned a story in the October issue of Alliance Insight, a science and technology newsletter of the Mississippi Gulf Coast Alliance for Economic Development, about the new spirit of cooperation in the Gulf Coast when it comes to aerospace. I promised I'd provide a link when it's available, and here it is. I recommend reading it, but then again, I wrote it.

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