Is Nashville the nation’s next $100 billion city?
Nashville’s economy ranks as one of the fastest-growing in the country, joining other booming cities like Austin and San Jose, according to a new report on metro economies released Friday at the United States Conference of Mayors.
The city ranks third in the country based on the rate of growth of the gross metropolitan product, or GMP, which measures the value of all goods and services produced within a metropolitan area.
During 2013, Nashville grew its GMP by 4.2 percent, double the national average of 2.1 percent growth. In terms of GMP growth, only Austin, Texas, and San Jose, Calif., beat out Nashville.
Nashville’s growth reflects an overall national trend — the increasing economic importance of urban areas.
“Metropolitan areas continued to be the beating heart of the US economy in 2013,” the report said. They are also growing. Employment in major cities jumped by 1.9 percent in 2013, and 84 percent of the United States population lives in a metropolitan area.
Nashville’s high rank is unsurprising, said David Penn, who is an economics professor at Middle Tennessee State University. “We’ve blown the top off the recovery for employment growth, we are way past our previous recession peak, and we have been the hot spot in the state for some time.”
Though Nashville’s GMP has grown quickly, the city has not yet cracked a total GMP of $100 billion, but that is projected to happen this year, according to the report prepared by IHS Global.
“Led by $1.4 trillion in New York, the (GMP) of 33 U.S. metros surpassed $100 billion in 2013, as Austin, Columbus (Ohio), and Sacramento (Calif.) joined that elite club,” the report says. “In 2014, we project that Las Vegas and Nashville will as well.”
Combined, the nation’s 10 highest-producing metro economies surpassed the output of the 37 lowest-producing states in 2013, according to the report.
That growth is happening because people tend to make different choices about where and how they want to live than they did about 25 years ago, said Matt Murray, associate director of the University of Tennessee-Knoxville’s Center for Business and Economic Research. During that time, much of the population wanted to live in the suburbs, he said, but that has changed.
“I think people have tired of that, so we’ve seen this wave of urban development take place,” Murray said. “People of all ages want the amenities that a metropolitan location has to offer.”
Part of the reason Nashville has experienced fast GMP growth relative to other places is the diversity of its economy, Murray said. “Nashville’s got such a rich array of health care services, financial services, and of course it has the entertainment industry,” he said, adding that the city also has strong automakers and other manufacturing companies. All of that means that the city’s economy doesn’t lean too hard on any one sector, and Nashville employers have a good selection of skilled workers.
The report also compares some metro GMPs with those of states and even other countries. For example, Nashville’s GMP during 2013 was $96.3 billion. That’s slightly less than the African country of Angola, which earned a gross domestic product of $96.6 billion during the same time. The city’s GMP is slightly higher than that of Slovakia, which had a 2013 GDP of $95.8 billion.
Compared with the states, Nashville’s GMP is less than Nebraska’s GDP for 2013, which was $101.8 billion, and more than New Mexico’s GDP, which was $82.3 billion.
Reach Shelley DuBois at 615-259-8241 and on Twitter @shelleydubois.
GMP (in billions) during 2013 — projected GMP in 2020
Austin, TX: 95.0 — 128.2
San Jose, CA: 178.7 — 234.0
Charlotte, NC: 112.5 — 143.5
San Francisco, CA: 322.5 — 403.3
New Orleans, LA: 67.7 — 80.2