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This coverage is made possible by grants from the Central Corridor Funders Collaborative and The McKnight Foundation.

MSP is still the nation's 14th largest metro economy, despite sharp decline in 2009 GDP

It's a matter of local lore — and local wit — that everything in Minneapolis-St. Paul is above average, but that wasn't nearly the case in 2009. As the Great Recession reached its deepest point, the metropolitan economy shrank by 3.1 percent over the previous year, a steeper decline than the 2.4 percent national average for metro areas.

This week's report on metro gross domestic product (GDP) by the U.S. Bureau of Economic Analysis is the clearest indication yet that, uncharacteristically, MSP may have taken a harder hit than most metro economies across the nation — and across the Upper Midwest as well. Measured in current dollars, MSP's economic output stood at $189.8 billion in 2009, down from $192.8 billion in 2008.

Altogether, 80 percent of the nation's 366 metro markets registered declines. Hard times in construction, professional and business services and the manufacture of durable goods (autos, appliances) explained the losses, the bureau said. It was difficult to pinpoint the most troubled MSP sectors, however, because confidentiality protects the reporting of specific data by many local firms.

High profits in the oil and gas industries explained most of the gains in the few markets that showed significant growth.

MSP keeps its rank
It's important to measure metro economies because they are the basic geographic units of global competition.  MSP retained its rank as the nation's 14th largest metro economy, passing Detroit while being passed by Phoenix, despite Arizona's housing miseries. Among the top 20 metro economies, Detroit, St. Louis and Miami were among biggest losers in 2009 while Houston, San Francisco and Washington, D.C., were the only metros posting gains.

In the Upper Midwest, MSP continues to dominate, roughly matching the combined output of its four nearest rivals — Milwaukee, Omaha, Des Moines and Madison. But its 2009 performance was among the weakest in the region (along with Sioux City and Mankato) while Sioux Falls, Bismarck and Fargo each posted modest gains.

State Economist Tom Stinson said he was a bit surprised by the numbers, especially since MSP has done better than the nation as a whole in keeping its population employed during the worst of times. "Employment may be a better measure of economic well-being," he said.

Current numbers show MSP's unemployment rate at 6.5 percent. That's second best among the nation's 20 largest metro economies. Only Washington, D.C., (at 5.7 percent) has a better unemployment rate. During the teeth of the recession in late 2008, MSP's unemployment rate ranked in the mid range among the top-20 metro economies.

Todd Klingel, president and CEO of the Minneapolis Regional Chamber of Commerce, was similarly perplexed about the employment/GDP paradox: "All I can say is that it must have had something to do with the nature of the employment."

20 largest U.S. Metro Economies
2009 GDP/ Percent change from 2008

Selected Upper Midwest Economies
2009 GDP / Percentage change from 2008

Cheers and boos
Cheers for the TV commercial I'd most like to see: A rugged SUV conquering the pot-holed city streets. (Music swells: "Like a Rock…" etc.) No need for remote desert and mountain locations.

Boos to a luxury casino on Block E. Bob Lux is a gifted developer (See Grant Park, the Carlyle, etc.) But do you really want the "stamp of desperation" that a downtown casino brings with it? Look at the other cities with downtown casinos (Detroit, New Orleans, etc.) Is that what you want to be? I hope not. As for "luxury," it can turn to sleaze pretty quickly, especially where gambling is involved.

Boos to a proposed rise in train and bus fares. Given the circumstances, it might be OK as long as legislators also raise gasoline taxes for drivers. We'll get back to you on that …

In metrospect: Three significant stories this week
California, that once-golden state, heads for a crackup. And, says this engaging piece, "the few remaining newspapers can't afford to tell anyone what's going on: they're too poor." The tale from politics essayist Nikil Saval is in the cheeky journal n+1.

More California: 26 cities face a once-in-a-century opportunity to benefit from the federal/state partnership in high-speed rail. But they need to change their land-use ordinances (and attitudes), according to a new study by SPUR, the San Francisco Planning and Urban Research Association. The study is called "Beyond the Tracks: How Smart Land-Use Planning Can Reshape California's Growth."

"Five Myths About Suburbia" is an updated look at an out-of-date attitude: hating the suburbs. William Upski Wimsatt's piece in the Washington Post tackles these misperceptions: that suburbs are white, middle-class enclaves; that they aren't cool; that they're a product of the free market; that they're politically conservative; and that suburbanites don't care about the environment. 

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Comments (3)

Looks like we've surpassed Detroit for second banana in the Midwest at large -- or rather, we declined less than the Detroit metro did.

Since I'm interested in rail projects, it frustrates me that routes from Chicago to St. Louis and Detroit (and even a new route being extended to Iowa City) are getting significant investment, yet the route to the Twin Cities seems to have stalled out yet again.

Heh, I've seen ads like the one you described for the SUV, though I think they've mostly been for luxury cars which have marketed for decades for their ability to insulate their occupants from the supposed horrors of the city.

Boo to transit fare increases indeed. And not just fare increases, but service cuts as well.

Especially when there is money available. At any time the TAB can direct federal STP and other dollars to transit operations, either directly or by boosting the transit capital budget so that Metro Transit may shift money to operations. The question is, will our city and county officials do it? It will require delaying some other transportation projects.

Dayton's proposal to cut transit funding is unconscionable. Just when people most need to get to jobs, we cut off another point of access.

Wimsatt is observing what planners and urban studies folks told us a decade ago: what you're seeing in the city now will be in the suburbs soon. Some of it is good, some of it not so good. What particularly stands out to me in his piece is the note on the striking rise in suburban poverty. It's a shame he didn't bother to look at the research that predicted this long ago.

The exurbs are now what the suburbs used to be.

He's right that parts of cities are becoming what suburbs used to be. One only has to look at the Midway here (suburban-style sprawl) or the attitudes I encounter in Uptown every day - a complete lack of understanding of racial and poverty issues, though to be fair, this has been true forever in the wealthier parts of cities.

But I think we're learning. We've embraced our riverfronts. We're starting to understand walkability and the interconnectedness of transportation, housing, storefronts and jobs, something we used to know and something places like Vancouver, BC have leveraged to great success.