By Dave Gatton and Carolyn Merryweather
August 4, 2003

On July 24 the U.S. Conference of Mayors and The Council for Investment in the New American City released the U.S. Metro Economies: The Engines of America's Growth 2002 at a policy meeting in New York. The report contains the 2002 Gross Metropolitan Product numbers for the nation's 319 metro areas as well as 2003 and 2004 forecasts. Overall, the report showed that while metro areas are showing early signs of recovery from the recent economic slowdown, not enough new jobs are being generated to truly jumpstart their economies.

The report, which was written by economic forecasting firm Global Insight, shows that in 2002 metro areas accounted for 85.6 percent of the nation's Gross Domestic Product. That number mirrors the 2001 metro area contribution to the U.S. economy. In the long term, the report forecasts that over the next 25 years metro area share of GDP will grow to 87.3 percent. The top 20 metro areas alone accounted for $3.8 trillion in output in 2002, which was 42 percent of metro area output and 36 percent of national output.

Metro areas have suffered due to the recent recession, and in 2002 they saw real GMP growth of only 1.8 percent. Metro areas contributed $9.1 trillion to the U.S. economy in 2002, 85.6 percent of the Gross Domestic Product. In 2003 the report forecasts that metros will grow by 2.1 percent, and in 2004 by 3.4 percent.

"We are hopeful that the early signs of economic recovery in our metro areas will gain momentum into next year, and our report gives us reason for optimism," said Conference President Hempstead (NY) Mayor James A. Garner. "But jobs are still a concern for us, we still have anemic job growth that we are watching very closely."

The report says that new jobs are the key to future growth, and because the labor force expands naturally over time, unemployment numbers will not begin to decrease until new job growth reaches 1 percent. In 2002, employment in metro areas shrank by 1 percent.

Internationally, if U.S. metro areas were nations, 48 of the top 100 world economies would be metros. However, the sluggish economy has caused many metros to slip in their rankings. Among those, New York fell one spot from last year, becoming the 14th largest economy in the world. Los Angeles-Long Beach moved from 15th to 16th. "This is a stubborn economy and we-ve been fooled by it before, but we know that as the engines of the economy, our metro areas are going to have to lead us into long term growth," said Detroit Mayor Kwame Kilpatrick, Chair of the Council for Investment in the New American City.

The housing market has been one of the few outstanding performers during the recession, with an 8.2 percent growth in new single family home permits in 2002. Metro areas clearly benefited from the boom in housing, and in 2002, 229 metros had higher levels of residential permits than in 2001. Only 92 metros saw no growth or a decline in permits. Overall, 6.1 million people were employed in the residential housing market in 2002, and 86 percent worked in metro areas.

The report is the latest in the Metro Economy series. It is available online at usmayors.org. To request a hard copy, please contact Dave Gatton at (202) 861-6712, or send email to dgatton@usmayors.org