3 years running: Provo/Orem again best-performing cities

Brice Wallace 

Several Utah cities continue to fare well in an annual ranking of “best-performing cities” in the U.S., with Provo/Orem maintaining the top spot for the third straight year.

The 2023 Milken Institute Best-Performing Cities Index put Provo/Orem at No. 1 among large cities. Meanwhile, among small cities, Idaho Falls, Idaho, jumped from No. 5 and overtook previous No. 1 Logan, pushing Logan back to No. 2. St. George, last year’s No. 2, slipped to the third spot.

The index ranks cities into five{mprestriction ids="1,3"} tiers to more easily compare economic performance to their peers. Provo/Orem, Logan and St. George are Tier 1 cities. Among Tier 2 cities are Ogden/Clearfield at No. 18, down from No. 13 last year and No. 9 in 2021; and Salt Lake City at No. 19, dropping from No. 3 last year and No. 4 in 2021.

Provo/Orem’s ranking bested the Austin area of Texas; Raleigh, North Carolina; the Nashville area in Tennessee; Boise, Idaho; the Dallas area of Texas; and the Phoenix area, among others.

The Milken index, published annually since 1999, reflects cities’ effectiveness at leveraging their resources to promote economic growth and provide their residents with access to the essential services and infrastructure needed for success. Its components include job creation, wage growth and the high-tech sector’s output growth. Since 2021, the index also includes measures of housing affordability and broadband access that reflect access to economic opportunities of cities’ residents.

A nonprofit, nonpartisan think tank, Milken measured economic vitality in 200 large metropolitan areas and 203 small metro areas. The 2023 index and rankings are based mainly on data from 2021, the first full year of recovery following the onset of COVID-19.

“This year’s report shows that U.S. cities continue to drive the nation’s growth despite the pressures created by COVID-19,” said Maggie Switek, director of regional economics in the Milken Institute’s Research Department. “Three years after the onset of the pandemic, cities are still the main centers of the nation’s economic activity. In 2021, the metropolitan areas included in the BPC rankings generated 89 percent of the U.S. gross domestic product and were home to 86.3 percent of the country’s population.”

Provo/Orem was bolstered by its top ranking for both employment growth and wage growth from 2016 to 2021. It was second for job growth from 2020-21.

“No place on Earth is as dear to me as Provo,” said Provo Mayor Michelle Kaufusi. “It’s where I was born, where I grew up, and where my husband and I chose to raise our kids. I am proud to see that the world is taking note of this remarkable place, where the majesty of nature surrounds a thriving hub of tech activity and educational opportunity, creating unparalleled quality of life.

“For the Milken Institute to recognize us for three straight years as the nation’s ‘Best-Performing City’ is a thrill and an honor. The award is data-driven, based on metrics like job and wage growth. But behind our impressive metrics are the amazing people that make it all happen. It is they who should be most proud of this award.”

The report noted that Provo/Orem is home to several well-established high-tech companies and numerous tech startups, and to Brigham Young University, which offers stable employment to 4,000 Utahns.

“Home to Brigham Young University, the city benefits from the school’s reputation and contribution to the qualified workforce, which help attract high-tech companies in search of talent,” the report states. “With its well-established network of tech professionals, entrepreneurs are now also using Provo as a launching pad for their own businesses in the area.”

The report noted, however, that Provo slipped to the 34th position in short-term job growth and to the 48th position in one-year high-tech GDP growth, “indicating that other large cities are beginning to catch up to Provo in these areas.” Provo also ranked low in housing affordability although the city has shown progress there.

Meanwhile, Logan ranked in the top 10 in terms of five-year and one-year job and wage growth, but it fell to the 55th position in short-term job growth, covering the period between October 2021 and October 2022.

“This drop occurred even as Logan’s rate of short-term job growth increased from 2.2 percent to 3.0 percent over the last year, implying that while Logan’s job market remains strong, job growth in other small cities accelerated faster,” the report says.

In five-year high-tech GDP growth, Logan moved up from 29th place in 2022 to the third position in this year’s rankings. Employment in manufacturing grew by 11.3 percent between 2020 and 2021 as wages rose 22.1 percent during the same period.

“The city’s vibrant education and outdoor resources, however, add pressure to the housing market. Logan ranks low relative to its peers in housing affordability, falling to 119th in both metrics related to affordable housing,” the report states. “Pressure on the housing market is aggravated by a large and increasing (Utah State University) student population.”

St. George saw its high-tech GDP grow 60 percent between 2015 and 2021, seventh among metros, and also has experienced strong wage growth in recent years. Its five-year wage growth ranking was tops among small cities for the third year in a row.

“A strong performance is shown in St. George’s employment growth: The city ranked second in five-year job growth this year, after having ranked first in this metric for three consecutive years in past editions of the BPC rankings,” it says.

The report noted the growing city’s infrastructure challenges, especially with an arid climate “that has overburdened the water supply.” Housing prices also are an issue for many city residents. “Housing affordability has not improved in recent years but has grown worse,” it says.

The report is available at https://milkeninstitute.org/best-performing-cities.{/mprestriction}