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Study: Cambridge-Newton-Framingham area ranks 3rd nationally in 2009 economic turnaround

E-mail|Link|Comments () Posted November 12, 2009 01:00 PM

By Matt Rocheleau, Globe Correspondent

The Cambridge-Newton-Framingham metropolitan area experienced the country’s third-best one-year rebound in 2009 for creating and sustaining jobs and economic growth, according to an annual report released yesterday.

The study, published by the California-based Milken Institute each fall for more than a decade, ranks the “best performing cities” in the U.S. and the 2009 report also includes four other metropolitan areas in the state among its top 20 list of “biggest gainers” from their 2008 ranking.

Worcester is ninth, Peabody and Boston-Quincy are back-to-back at 16 and 17, followed by Springfield at 19th.

However, the apparent improvement for some of Massachusetts’ metropolitan areas is not so much a result of those places having grown economically, but more that compared to many other cities across the country, they have remained relatively stable through the recession, according to Ross DeVol, the institute’s director of regional economics and a co-author of the study who earned his master’s in economics from Ohio University.

In the Cambridge-Newton-Framingham area as well as in Boston-Quincy, DeVol said in a phone interview Wednesday, “There is a very high concentration of healthcare services and universities, and they have continued to add jobs in this tough economy,” which has offset job cuts and profits losses in other industries.

“Those that struggled most [during the recession] did so because there was a housing bubble in that area … [and] places with a high concentration of manufacturing, also struggled,” he added.

The study ranks the top 200 cities and metropolitan areas nationally based on data from the federal government’s Bureau of Labor Statistics on jobs, wage and salary and technology growth.

DeVol said he expects the country’s overall economy will improve in 2010 and predicted Massachusetts cities will perform “above average” compared to other parts of the U.S. during the nation’s recovery.

“My sense is that Cambridge, Boston and many metropolitan areas in Massachusetts will improve their ranking next year,” he said. “Coming out of this recession, I think the IT [information technology] sector is going to be better than people believe … IT will be one of the leaders in investment,” specifically in the life sciences and biotech areas.

For 2009, Cambridge-Newton-Framingham ranks 45th overall in terms of performance compared to 139th last year – an improvement of 94 spots, which ties with New York’s Buffalo-Niagara Falls area and trails behind only two metropolitan areas in Connecticut.

Hartford-West Hartford-East is the top rebounding area according to the study after climbing 101 spots from 2008, and New Haven-Milford is second after advancing 96 spots.

Worcester is 79th overall this year, a 77-spot increase from 2008. Peabody ranks at 111 after its 171st ranking from a year ago. Boston-Quincy is 61st overall in 2009, improving by 57 spots from last year’s list, and Springfield ranks 127th overall after its 182nd placing in 2008.

Also making the top 200 list was the Providence-New Bedford-Fall River area at 187, which decline 17 spots.

The top two, and four of the top five, metropolitan areas nationally for overall performance in 2009 are located in Texas.

Regional economic factors strongly influenced the rankings, with the oil and gas sector, technology and alternative energy providing stability among metros in Texas, North Carolina, Washington and Louisiana, which also benefited from low dependence on housing and construction, according to the report.

"Another factor helping Texas metros move up in the rankings is that state’s favorable business climate and its ability to attract jobs and corporations away from higher-cost states," the report said.

Austin-Round Rock claimed the top spot, followed by Killeen-Temple-Fort Hood. Austin, which has been helped by its strong tech industry, is the first metro to ever be ranked number one twice on the index, the last time being in 2000, according to the institute.

Milken also compiled a separate list ranking the economic performance of smaller metropolitan areas, which generally have a population less than 250,000. Pittsfield’s rank improves to 61st on the 124-city list after placing at 86th in 2008. While Barnstable claims Pittsfield’s former spot at 86, a 15-place improvement from 2008.

The Milken Institute is a non-profit, independent economic think tank and research group, which focuses on human capital, financial capital and social capital.

To download the full report of the “2009 Best Performing Cities,” click here. To see past year's results, click here.