By Carolyn Merryweather
November 1, 2004

The United States Conference of Mayors' Council for the New American City released on October 22 U.S. Metro Economies: GMP — The Engines of America's Growth. The report, authored by economic forecasting firm Global Insight, included the most recent Gross Metropolitan Product (GMP) numbers for the nation's 318 metro areas as well as forecasts for 2004 GMP and employment numbers.

The report found that in 2003, metro areas were responsible for 85.4 percent ($9.4 trillion) of U.S. Gross Domestic Product (GDP), 88.6 percent of the nation's labor income, and 84 percent of U.S. employment. By 2029, the report forecasts that 87 percent of GDP will be generated by metro areas, totaling $39.5 trillion. Furthermore, in 30 states, the combined metro areas contribute 75 percent or more of the state's total economic output, and the combined GMP of the top 10 metro areas ($2.7 trillion) was greater than the combined Gross State Product (GSP) of 31 states ($2.6 trillion).

In 2003, a total of 109 million workers were employed in U.S. metro areas, and through 2005, the report forecasts that metro areas will account for approximately 90 percent of all new jobs created. As the nation recovers from the recession, however, the report finds that new jobs created through 2006 are projected to have a significantly lower average yearly wage ($38,839) than those lost during the 2000-2003 period ($43,950). This difference equals a national wage gap of 11.6 percent between jobs lost and jobs gained.

Conference President Akron Mayor Donald L. Plusquellic said, "U.S. Metro areas are responsible for over 85 percent of the nation's economy. Cities are at the center of each metro economy, and as mayors, we care deeply about providing jobs for all of our residents including lower-wage jobs. Wages not only drive the purchase and maintenance of new homes, but they provide hope for the future by paying child care, health costs, college tuitions, and are the avenue out of poverty for many of our people."

Future employment growth in the top 20 metro areas is expected to be led by the professional and business services sector, and in 2005, the manufacturing sector is projected to post year-over-year employment growth for the first time since 1998. The top 20 metros accounted for 36 percent of national output in 2003, as well as 42 percent of total GMP among the nation's 318 metro areas. In 2004 and 2005, the top 20 metros are expected to grow by 4.6 percent and 3.7 percent respectively in inflation-adjusted terms. These growth rates are the most robust the metros have seen since 2000, and the report projects that gross output is expected to reach $4.4 trillion in 2005.

"As the engines of the economy, we rely on our metro areas to lead our country into long-term growth," Detroit Mayor Kwame M. Kilpatrick, Chair of the Council for the New American City said. "Contrary to popular opinion, the economies of the 50 states do not drive the nation, but rather the 318 metro areas, made up of cities, are our real strength."

The report also found that if metro areas were nations, 47 of the world's 100 largest economies would be U.S. metro areas. New York City, Los Angeles'Long Beach, and Chicago are all in the top 20 of that list. In 2003, however, some of the nation's top metros fell in their international rankings due to the sluggish nature of the economic recovery and a weakening dollar. New York dropped from 14th to 16th largest economy in the world, Los Angeles'Long Beach dropped from 16th to 18th, and Chicgao from 18th to 19th.

The report is available online at usmayors.org.