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Wednesday, December 30, 2009

Big Cities Are Still Waiting for Economic Recovery




The recovery made only slow advances in October and was still skirting most major population areas in the U.S., according to new readings of the Adversity Index from Moody's Economy.com and msnbc.com.
 
Nearly one in three metro areas have started to recover, but virtually none of the nation's biggest cities. (The full list is below.)
 
One likely reason is that the nascent economic recovery started in the nation's midsection, from south to north, a part of the country that has relatively few big cities. The oil and gas industry has helped states from Texas up through the Great Plains. Heavily urbanized states such as New York and California were among the hardest hit in the recession and are proving slower to recover. Areas with the largest runup in home prices have been the slowest to recover, economists say, particularly Nevada and Florida.

Out of 384 metro areas in the nation, 118 were in recovery, or 31 percent, according to the October Adversity Index. That's up from 100 metro areas in September and 79 in August, the first month when any areas showed a rebound beginning.
 
A much larger group, 264 areas, had a "moderating recession" in October, meaning their economies were still shrinking but not so severely as earlier this year. 
 
That leaves two metro areas still spiraling downward in a full recession, both of them in Nevada: Las Vegas-Paradise and Carson City.
 
Each month, the Adversity Index uses government data on employment, industrial production, housing starts and home prices to label each state and metro area as expanding, at risk of recession, in recession or recovering. The index was developed by msnbc.com and Moody's Economy.com, which sells in-depth economic forecasts on metro areas
 
In most states the recovery has so far not taken hold in the largest metro areas. In New York, for example, the three areas in the recovery category are Buffalo-Niagara Falls, Ithaca and Utica-Rome. In Tennessee, the only two are Clarksville and Cleveland. Five metro areas are in recovery in North Carolina, but not Charlotte.
 
There were 20 areas that moved into the recovery category in October: Albany, Ga.; Amarillo, Texas; Birmingham-Hoover, Ala.; Buffalo-Niagara Falls, N.Y.; Charleston-Summerville , S.C.; Clarksville, Tenn.-Ky.; Dover, Del.; Dubuque, Iowa; Eau Claire, Wis.; Fayetteville, N.C.; Gainesville, Ga.; Laredo, Texas; Morgantown, W.Va.; Mount Vernon-Anacortes, Wash.; Norwich-New London, Conn.; Pensacola-Ferry Pass-Brent, Fla.; Salisbury, Md.; Sheboygan, Wis.; Waco, Texas; and Wausau, Wis.
 
Two areas shifted from the recovery category into the recession category: Dallas-Plano-Irving, Texas and Kalamazoo-Portage, Mich. 
 
"Recovery" doesn't mean that an area's economy is above where it was at the beginning of the recession, just that the area has begun to dig its way out of the hole.
No metro area yet is shown in "expansion," the most positive category; that label is triggered when a metro area's economy grows past its previous peak. Most of the recovering areas are far from that level.
 
First signs of manufacturing gains
October was the first month since November 2008 when any metro area showed an increase in manufacturing output. Nine of 384 areas posted gains: Wichita, Kan.; Sebastian-Vero Beach, Fla.; Seattle-Bellevue-Everett, Wash.; Crestview-Fort Walton Beach-Destin, Fla.; Savannah, Ga.; Tucson, Ariz.; Merced, Calif.; Lake Charles, La.; and Carson City, Nev.

Only 10 of 384 areas gained jobs: Kennewick-Pasco-Richland, Wash.; Sandusky, Ohio; Hot Springs, Ark.; McAllen-Edinburg-Mission, Texas; Iowa City, Iowa; St. Joseph, Mo.-Kan.; Jonesboro, Ark.; Ocean City, N.J.; Lynchburg, Va.; and Bethesda-Rockville-Frederick, Md.
By contrast, 115 areas showed increases in housing starts.
 
‘Play’ the index
Here are several ways to explore this month's Adversity Index:

  • An interactive map above this story shows the economic health of every state and metro area. You can "play" the map to watch the economy's ups and downs over 15 years, or select any state to see data for each metro area for each month. You can also see the map on its own page .  

  • A month-by-month chart shows when the current recession enveloped each metro area.
  • The updated index will be published every month at http://adversity.msnbc.com . There is a lag of about six weeks, so November data will be out in January.
  • An explainer tells how the Adversity Index assesses the economy.
  • This list shows which counties are within each metro area.
Regional outlook from Moody's Economy.com
In its monthly regional forecast, Moody's Economy.com found that the economy is recovering first in the central plains, where unemployment has stabilized, and that the recovery is only starting to spread outward.

"Many Plains and nearby Mountain state economies are now recovering," wrote Steve Cochrane, managing director at Moody's Economy. "The next region likely to turn the corner will be the Southeast, except Florida and perhaps Georgia, where housing markets remain so uncertain." High numbers of bank failures in the Southeast are also a concern, he wrote.
 
State by state
Looking at the state-level data, there was only one state that moved into the recovery category in October: Alabama. It joined Alaska, Idaho, Indiana, Iowa, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, South Dakota and Washington, D.C. Within those states some metro areas are still in recession.

Nevada was the only state left classified as being in a full recession in October, according to the Adversity Index. All other states were in a moderating recession. 
 
Metro areas in recovery
Here are the 118 metro areas where the Adversity Index shows a recovery under way in October. Several of the metro areas cross state lines and are listed more than once.

  • Alabama (4 out of 12 metro areas in recovery): Birmingham-Hoover, Columbus (Georgia-Alabama), Huntsville, Mobile.
  • Alaska (1 out of 2): Anchorage.
  • Arizona (1 out of 6): Yuma.
  • Arkansas (3 out of 8): Fayetteville-Springdale-Rogers (Arkansas-Missouri), Hot Springs, Little Rock-Conway.
  • California (0 out of 28).
  • Colorado (1 out of 7): Colorado Springs.
  • Connecticut (1 out of 4): Norwich-New London.
  • Delaware (1 out of 2): Dover.
  • Washington, D.C. (0 out of 1): The broad metro area, which includes parts of Maryland, Virginia and West Virginia, is still in recession, though the narrower District of Columbia itself is listed in recovery.
  • Florida (1 out of 22): Pensacola-Ferry Pass-Brent.
  • Georgia (7 out of 15): Albany, Augusta-Richmond County (Georgia-South Carolina), Brunswick, Columbus (Georgia-Alabama), Gainesville, Savannah, Warner Robins.
  • Hawaii (0 out of 1).
  • Idaho (4 out of 6): Idaho Falls, Lewiston (Idaho-Washington), Logan (Utah-Idaho), Pocatello.
  • Illinois (6 out of 13): Bloomington-Normal, Danville, Davenport-Moline-Rock Island (Iowa-Illinois), Kankakee-Bradley, Springfield, St. Louis (Missouri-Illinois).
  • Indiana (10 out of 17): Anderson, Bloomington, Elkhart-Goshen, Evansville (Indiana-Kentucky), Fort Wayne, Gary, Indianapolis-Carmel, Kokomo, Lafayette, Terre Haute.
  • Iowa (8 out of 9): Ames, Cedar Rapids, Davenport-Moline-Rock Island (Iowa-Illinois), Des Moines-West Des Moines, Dubuque, Iowa City, Omaha-Council Bluffs (Nebraska-Iowa), Sioux City (Iowa-Nebraska-South Dakota).
  • Kansas (2 out of 6): Kansas City (Missouri-Kansas), St. Joseph (Missouri-Kansas).
  • Kentucky (5 out of 9): Clarksville (Tennessee-Kentucky), Elizabethtown, Evansville (Indiana-Kentucky), Lexington-Fayette, Owensboro.
  • Louisiana (3 out of 8): Baton Rouge, Lake Charles, New Orleans-Metairie-Kenner.
  • Maine (0 out of 3).
  • Maryland (1 out of 7): Salisbury.
  • Massachusetts (2 out of 8): Cambridge-Newton-Framingham, Worcester.
  • Michigan (0 out of 16).
  • Minnesota (3 out of 8): Fargo (North Dakota-Minnesota), Grand Forks (North Dakota-Minnesota), Rochester.
  • Mississippi (3 out of 5): Gulfport-Biloxi, Jackson, Pascagoula.
  • Missouri: (6 out of 9) Fayetteville-Springdale-Rogers (Arkansas-Missouri), Joplin, Kansas City (Missouri-Kansas), Springfield, St. Joseph (Missouri-Kansas), St. Louis (Missouri-Illinois).
  • Montana (2 out of 3): Billings, Missoula.
  • Nebraska (3 out of 3): Lincoln, Omaha-Council Bluffs (Nebraska-Iowa), Sioux City (Iowa-Nebraska-South Dakota).
  • Nevada (0 out of 3).
  • New Hampshire (1 out of 2): Manchester-Nashua.
  • New Jersey (2 out of 10): Edison-New Brunswick, Newark-Union (New Jersey-Pennsylvania).
  • New Mexico (0 out of 4).
  • New York (3 out of 13): Buffalo-Niagara Falls, Ithaca, Utica-Rome.
  • North Carolina (4 out of 15): Fayetteville, Goldsboro, Greenville, Winston-Salem.
  • North Dakota (3 out of 3): Bismarck, Fargo (North Dakota-Minnesota), Grand Forks (North Dakota-Minnesota).
  • Ohio (4 out of 16): Columbus, Parkersburg-Marietta-Vienna (West Virginia-Ohio), Sandusky, Weirton-Steubenville (West Virginia-Ohio).
  • Oklahoma (0 out of 4).
  • Oregon (0 out of 6).
  • Pennsylvania (3 out of 16): Johnstown, Newark-Union (New Jersey-Pennsylvania), State College.
  • Rhode Island (0 out of 1).
  • South Carolina (5 out of 10): Augusta-Richmond County (Georgia-South Carolina), Charleston-Summerville, Columbia, Myrtle Beach-Conway, Spartanburg.
  • South Dakota (3 out of 3): Rapid City, Sioux City (Iowa-Nebraska-South Dakota), Sioux Falls.
  • Tennessee (2 out of 10): Clarksville (Tennessee-Kentucky), Cleveland.
  • Texas (11 out of 26): Amarillo, Austin-Round Rock-San Marcos, Brownsville-Harlingen, El Paso, Fort Worth-Arlington, Laredo, Lubbock, McAllen-Edinburg-Mission, San Antonio-New Braunfels, Waco, Wichita Falls.
  • Utah (2 out of 5): Logan (Utah-Idaho), Provo-Orem.
  • Vermont (0 out of 1).
  • Virginia (3 out of 11): Blacksburg-Christiansburg-Radford, Charlottesville, Harrisonburg.
  • Washington (3 out of 13): Kennewick-Richland-Pasco, Lewiston (Idaho-Washington), Mount Vernon-Anacortes.
  • West Virginia (3 out of 9): Morgantown, Parkersburg-Marietta-Vienna (West Virginia-Ohio), Weirton-Steubenville (West Virginia-Ohio).
  • Wisconsin (7 out of 16): Appleton, Eau Claire, Janesville, Madison, Oshkosh-Neenah, Sheboygan, Wausau.
  • Wyoming (0 out of 2).  
The view from Elkhart
Among the 118 recovering areas is Elkhart, Ind., where msnbc.com has been reporting on the nation's struggles through the lens of the Indiana city.

 
Elkhart's economy started to improve in August, based on comparisons with figures posted six months earlier.
 
But if you compare Elkhart's numbers with a year earlier, or go even further back, it's clear that it may take a long time to return to the highs of the past. According to the index, Elkhart was one of the first areas outside of Michigan to slip into recession when its downturn began in December 2006. 
 
Here are Elkhart's Adversity Index numbers for the three-month period ending in October, compared with a year earlier, along with the biggest losers and winners among all metro areas:
  • Employment in the Elkhart-Goshen metro area fell 7.94 percent from a year earlier, compared with 8.47 percent the previous month. That ranked near the bottom of metro areas, 379th out of 384. The worst declines were in Warren-Farmington Hills-Troy, Mich., down 9.19 percent, and Flint, Mich., down 8.18 percent. The greatest increase in jobs was in Kennewick-Richland-Pasco, Wash., up 3.79 percent, followed by Sandusky, Ohio, up 2.25 percent.
  • Industrial production in the Elkhart area fell 8.75 percent year over year, compared with a 13.55 percent decline a month earlier. Once at the very bottom, Elkhart has moved closer to the middle in manufacturing output, ranking 217th out of 384. The worst decline was Gary, Ind., down 17.47 percent, followed by Erie, Pa., down 17.04 percent. The largest increase was in Wichita, Kan., up 4.51 percent, followed by Sebastian, Fla., up 2.62 percent.
  • Single-family housing starts fell by 55.64 percent in Elkhart from a year earlier, ranking near the bottom, 374th out of 384. The worst decline was in Decatur, Ill., down 80.29 percent, followed by Battle Creek, Mich., 73.79 percent. The greatest increase was in Beaumont, Texas, where housing starts rose 111.79 percent from a year earlier, then Vallejo, Calif., up 108.22 percent.
  • Home prices, the fourth component of the Adversity Index, will be updated when quarterly figures are released. 

Via:
www.msnbc.msn.com
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