Report: Developing Metro Areas Still Lead World in Economic Growth
While developing metropolitan areas still lead the world in terms of economic growth, developed metro areas in the U.S. and the United Kingdom registered significant improvements in 2014, according to findings published by the Brookings Institution in latest Global MetroMonitor report.
Macau, China, was the world’s top-performing metro area in 2014, followed by the Turkish cities of Izmir, Istanbul and Bursa. But alongside many emerging markets, four U.S. metro areas—Austin and Houston, Texas; Raleigh, North Carolina; and Fresno, California—and two U.K. metro areas—London and Manchester—ranked among the 60 fastest-growing metro economies worldwide.
The analysis found that overall, GDP per capita in these top 300 metro areas grew 1.3 percent in 2014, compared to 1.6 percent in 2013. Employment grew at 1.5 percent in 2014, the same as in 2013. The fastest growing economies were once again found in the developing Asia-Pacific and Eastern European and central Asia regions. The slowest-growing metro economies were located in Western Europe, North America and developed Asia-Pacific.
In 2014, the report found, one-third of the 300 largest metropolitan economies were “pockets of growth,” outperforming their countries on both income and employment growth. The number of U.S. metropolitan regions that achieved full recovery to 2007 levels in both employment and income has nearly doubled, with 32 out of 80 metros in this category in 2014, versus 17 in 2012 when the first Global MetroMonitor was published in cooperation with JPMorgan Chase.
Six years after the global financial crisis, the majority of the world’s metro economies have met or exceeded their pre-recession levels of income and employment. Yet 57 percent of metro areas in North America and 65 percent in Western Europe have yet to achieve full recovery. Even as national growth slowed in 2014, China accounted for more than half of the 30 fastest-growing metro economies in the world, the report said, with metro areas in China’s inland core continuing to exhibit extremely high growth rates.
Hefei led all Chinese metro areas with 9.5 percent income growth, followed by Wuhan, Xiamen and Changsha. All of these fast-growing cities except Xiamen are located in the central part of China, which has benefited from the national government’s efforts to connect these regions to the coast through significant infrastructure investment.
“When you look at the global economy through a metropolitan lens, you see just how uneven growth is in every major region,” says Joseph Parilla, Brookings research analyst and lead author. “In developed economies like North America and Western Europe, cities like London and Houston are flying high, while others like Rotterdam and Montreal are struggling.”
Developing markets, Padilla adds, “are growing faster overall, but vast differences separate cities in central China from those in the northeast, and cities in Peru and Colombia from those in Brazil and Argentina.”
But, he cautions, “As political gridlock and economic turmoil thwarts decisive action from national governments and multilateral institutions, city and regional leaders worldwide must forge their own economic destinies.”