Heartland Forward releases annual report ranking nation’s top metros
by March 30, 2023 11:06 am 1,230 views
A Heartland Forward study released Thursday (March 30) showed Northwest Arkansas dropped in the rankings, but the region remains one of the nation’s most dynamic metros.
Heartland Forward’s 2023 edition of its annual “Most Dynamic Metros” report ranked Northwest Arkansas No. 34 among 382 metros nationwide with a population of at least 50,000. That’s down from a ranking of No. 21 last year.
“34th is still really good,” said economist Jonas Crews, a Heartland Forward researcher and one of the report’s four authors along with Jackson Li, Ross DeVol and Katie Milligan. “That’s the top 10 percent of metros in terms of growth over the past five years, and that’s never bad. The bar in Northwest Arkansas is really high.”
Heartland Forward, a “think-and-do” tank in Bentonville, uses its annual rankings to determine which areas of the country are leading in categories including employment, income, economic production and the ability to start and scale young firms. The index captures both historic and forward-looking indicators enabling cities to evaluate policies impacting local economic performance.
Central Arkansas (Little Rock), the state’s largest metro, ranked No. 251, and the Fort Smith metro, the state’s third largest, ranked No. 282. Hot Springs ranked No. 292, and Jonesboro was at No. 134.
Heartland Forward economists have produced the rankings annually for four years. For a PDF of this year’s 41-page report, click here.
DeVol, Heartland Forward’s president and CEO, said the 2022 rankings reflect metros focusing on innovation and quality of life.
“Smaller metros that offer access to high-quality outdoor amenities continue to perform well, and America’s innovation hubs are mainstays in the upper echelon of our rankings,” he said. “But from a larger perspective, this report also tells the story of the pandemic and its aftermath: our data indicates that the past two years brought very different economic conditions than 2020. Only seven metros experienced positive job growth from 2019 to 2020, but 367 posted gains from 2020 to 2021. And while inflation has hampered economic recovery from the 2020 recession, 357 metros still added jobs from June 2021 to June 2022.”
Heartland Forward economists measure all 50 states, not just the heartland. This year’s report has four heartland communities within the Top 25, including Elkhart-Goshen, Ind. at No. 2 overall.
In the 2020 version of the “Most Dynamic Metros,” Elkhart-Goshen was ranked No. 356. In the 2021 version, it was No. 81 overall, and now No. 2
“This is perhaps the most impressive progression out of all the metros in the U.S.,” the report said. “It is coined the RV capital of the world. The pandemic triggered a surge in RV production and purchasing from customers around the world. Just a little over 200,000 population in 2021, Elkhart-Goshen has an impressive five-year average annual pay (2016-2021) at 40.1%, which is the 5th fastest growth out of all metros.”
Seven heartland metros are in the Top 50, and 17 landed among the Top 100. That is an improvement over last year’s edition, when Austin-Round Rock-Georgetown, Texas, was the only heartland metro in the Top 10, and there were only four heartland metros in the Top 50 and 17 in the Top 100.
Researchers said Northwest Arkansas would have been in the Top 30 if not for rapidly rising costs. The region had the biggest jump in median home prices in the nation in 2022 and also experienced dramatic increases in utility costs.
“Northwest Arkansas got really popular during COVID,” Crews explained. “When that happens, you’re naturally going to see a price increase. With an increase in demand, a lot of times supply is slow to catch up, you’re going to see an increase in prices.”
Heartland Forward’s Top 10 metros for 2022 are:
- San Jose-Sunnyvale-Santa Clara, Calif., (Silicon Valley)
- Elkhart-Goshen, Ind.
- San Francisco-Oakland-Berkeley, Calif.
- Austin-Round Rock, Texas
- The Villages, Fla.
- Midland, Texas
- Boulder, Colorado
- Naples-Immokalee-Marco Island, Florida
- Provo-Orem, Utah
- St. George, Utah
The most-improved heartland metros in this year’s report have mostly found common ground in their manufacturing sectors — more precisely, the making of motor vehicle parts.
“There are some signs that we are starting to see a bit of reshoring of advanced manufacturing, and that is exciting for the US,” Crews said. “And good for our supply chains.”
Crews also highlighted the comeback of other large metros like Birmingham, Ala., Chicago and Detroit.
“They all came from the 200s last year to be [ranked] in the top 150 this year,” he said. “In the case of Detroit and Chicago, from the beginning to the middle of the last century, those were two of the most dynamic metros in the world. It’s cool to see them rebound.”
Crews, an Alabama native, described Birmingham as a metro on the move.
“They are trying to figure out how to change their identity [historically iron and steel manufacturing] and become a more vibrant, diverse economy by getting into technology and a burgeoning healthcare cluster around their medical systems,” he said.
Heartland Forward’s research also finds that innovation hubs continue to dominate while new metros are becoming recognized for their investments in technology. The two Northern California metros — San Jose-Sunnyvale-Santa Clara and San Francisco-Oakland-Berkeley — again rank first and third, respectively, in 2022. Additionally, the Seattle and Boston metros placed in the Top 25, with each finishing in the Top 15 for young-firm knowledge intensity — a measure of innovative capacity for young companies.
Two of the nation’s burgeoning innovation hubs also ranked high. Austin, Texas, rose to No. 4 in the current rankings, while the Miami metro advanced from No. 140 in 2021 to No. 30 in 2022.
Heartland Forward researchers say outdoor recreation hubs are still prioritized but geographically have changed. The 2021 iteration of the metro rankings highlighted the success of smaller regions offering direct access to the outdoors. Those areas were again successful in the 2022 index. However, the Western metros that had jumped up the rankings from 2020 to 2021 have now stabilized or fallen slightly. Meanwhile, Southeastern metros located near major outdoor amenities experienced significant jumps. For example, Provo-Orem, Utah ranked No. 12 last year in short-term GDP growth, up 1.5% from 2019 to 2020. However, its 8.3 % GDP growth from 2020 to 2021 was only good enough for No. 36.