The New York metropolitan area is on track to generate $1.797 trillion in gross domestic product in 2019, which would rank first among all metros in the United States by a wide margin. New York is projected to hold onto that ranking through at least 2035, when its GDP could reach $2.511 trillion, according to the annual Global Cities report published by Oxford Economics, a London-based independent global advisory firm.
The change in New York’s GDP would represent 2% annual growth, driven by a finance and business services sector that is the largest of any major world city. However, Oxford Economics projects that San Jose, Calif., with its high-tech and entrepreneurial ecosystem, will lead all American metros in annual GDP growth through 2035, at 3%, followed by Portland, Ore., and Austin, Texas (2.6%), and Seattle, Charlotte, N.C., Nashville, and San Francisco (2.4%).
Oxford believes that San Jose’s greatest asset is the “scale and diversity of its technical workforce.” This metro’s annual GDP growth averaged 7.4% during the years 2013-17. In Portland, where manufacturing accounts for roughly 40% of its annual growth, high-tech production is expected to sustain its robust economy.
Nashville, whose population has roughly doubled in the last 40 years, was recently chosen by Amazon for a new operations center that will employ 5,000 people. Apple plans to invest $1 billion in Austin, where the tech giant could eventually employ 15,000 people.
Behind New York, the cities that rank highest for projected GDP for 2019 and 2035 are Tokyo, Los Angeles, and London. L.A.’s GDP is expected to hit $1.093 trillion next year, and expand by 41.4% to $1.545 trillion in 2035. Oxford expressed some surprise about L.A.’s likely position, given that its financial and business services sector only accounts for 39% of its economy. But L.A.’s west-coast location and economic diversity are surely benefits.
Oxford also considers urban economies in terms of industrial output. On that score, two Texas cities, Houston and Dallas, are being driven by their low-tax, low-regulation model, and relatively abundant land, to achieve strength in moderately high-value manufacturing segments. (Dallas and Houston are ranked 4th and 7th, respectively, in projected 2019 and 2035 GDP.)
Conversely, Oxford wonders about Chicago’s prospects. The Windy City ranks third in projected GDP for both years tracked, but its financial and business services sector, relative to the city’s size, is actually smaller than Boston’s, San Francisco’s, and Washington D.C.’s.
“Fundamentally, it is tough being a Midwest city such as Chicago: regional growth is not so strong; many corporate headquarters and production facilities have moved south in search of lower taxes, laxer regulations, cheaper costs and more sun; and the start-up and tech scenes are elsewhere,” writes Oxford. On the other hand, Oxford points out that naysayers who wrote off Chicago in past years have been proven wrong because Chicago continues to offer “acceptable compromises,” such as affordability, livability, and opportunity, that keep it competitive nationally and globally.
While a large share of America’s GDP is clustered within its 10 largest cities, Oxford Economics notes that around two-thirds of U.S. economic output still comes from medium- and small-sized cities and towns. Of the top 20 metros by forecasted GDP growth through 2022, nine have fewer than 500,000 people. Many of these cities are located in the Southwest and Mountain regions, and benefit from an improved energy sector, immigration (although that remains an uncertainty, given the current political climate), and an evolving economic base.
Fastest growing U.S. cities 2019-35
Rank City avg. annual % growth
1 San Jose 3.0
2 Portland 2.6
3 Austin 2.6
4 Seattle 2.4
5 Charlotte 2.4
6 Nashville 2.4
7 San Francisco 2.4
8 Orlando 2.3
9 Dallas 2.3
10 Salt Lake 2.3
Top U.S. cities by size of economy
Rank 2035 Rank 2019 City GDP GDP % chg.
$B 2019 $B 2035
1 1 New York 1,797 2,511 39.7
2 2 Los Angeles 1,093 1,545 41.4
3 3 Chicago 713 957 34.3
4 4 Dallas 573 839 46.4
5 6 San Francisco 532 796 49.6
6 5 Washington 559 779 39.3
7 7 Houston 529 758 43.2
8 9 Boston 461 656 42.5
9 8 Philadelphia 467 650 39.4
10 10 Atlanta 402 575 42.9
Source: Oxford Economics
Related Stories
Market Data | Jul 21, 2021
Architecture Billings Index robust growth continues
AIA’s Architecture Billings Index (ABI) score for June remained at an elevated level of 57.1.
Market Data | Jul 20, 2021
Multifamily proposal activity maintains sizzling pace in Q2
Condos hit record high as all multifamily properties benefit from recovery.
Market Data | Jul 19, 2021
Construction employment trails pre-pandemic level in 39 states
Supply chain challenges, rising materials prices undermine demand.
Market Data | Jul 15, 2021
Producer prices for construction materials and services soar 26% over 12 months
Contractors cope with supply hitches, weak demand.
Market Data | Jul 13, 2021
ABC’s Construction Backlog Indicator and Contractor Confidence Index rise in June
ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels increased modestly in June.
Market Data | Jul 8, 2021
Encouraging construction cost trends are emerging
In its latest quarterly report, Rider Levett Bucknall states that contractors’ most critical choice will be selecting which building sectors to target.
Multifamily Housing | Jul 7, 2021
Make sure to get your multifamily amenities mix right
One of the hardest decisions multifamily developers and their design teams have to make is what mix of amenities they’re going to put into each project. A lot of squiggly factors go into that decision: the type of community, the geographic market, local recreation preferences, climate/weather conditions, physical parameters, and of course the budget. The permutations are mind-boggling.
Market Data | Jul 7, 2021
Construction employment declines by 7,000 in June
Nonresidential firms struggle to find workers and materials to complete projects.
Market Data | Jun 30, 2021
Construction employment in May trails pre-covid levels in 91 metro areas
Firms struggle to cope with materials, labor challenges.
Market Data | Jun 23, 2021
Construction employment declines in 40 states between April and May
Soaring material costs, supply-chain disruptions impede recovery.