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 | May 10, 2018
Construction costs surge in April as new tariffs and other trade measures lead to significant increases in materials prices
Association officials warn that the new tariffs and resulting price spikes have the potential to undermine benefits of tax and regulatory reform, urge administration to reconsider.
Market Data | May 7, 2018
Construction employers add 17,000 jobs in April and 257,000 for the year
Unemployment rate for construction increases slightly compared to year earlier as higher pay levels appears to be attracting people with recent construction experience back into the workforce.
Market Data | May 2, 2018
Construction employment increases in 245 metro areas between March 2017 & 2018, as trade fights & infrastructure funding shortfalls loom
Houston-The Woodlands-Sugar Land, Texas and Weirton-Steubenville, W.Va.-Ohio experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines.
Market Data | May 2, 2018
Nonresidential Construction down in March, private sector falters, public sector unchanged
February’s spending estimate was revised roughly $10 billion higher.
Market Data | Apr 30, 2018
Outlook mixed for renewable energy installations in Middle East and Africa region
Several major MEA countries are actively supporting the growth of renewable energy.
Market Data | Apr 12, 2018
Construction costs climb in March as wide range of input costs jump
Association officials urge Trump administration, congress to fund infrastructure adequately as better way to stimulate demand than tariffs that impose steep costs on contractors and project owners.
Market Data | Apr 9, 2018
Construction employers add 228,000 jobs over the year despite dip in March
Average hourly earnings increase to $29.43 in construction, topping private sector by nearly 10%; Association officials urge updating and better funding programs to train workers for construction jobs.
Market Data | Apr 4, 2018
Construction employment increases in 257 metro areas between February 2017 & 2018 as construction firms continue to expand amid strong demand
Riverside-San Bernardino-Ontario, Calif. and Merced, Calif. experience largest year-over-year gains; Baton Rouge, La. and Auburn-Opelika, Ala. have biggest annual declines in construction employment.
Market Data | Apr 2, 2018
Construction spending in February inches up from January
Association officials urge federal, state and local officials to work quickly to put recently enacted funding increases to work to improve aging and over-burdened infrastructure, offset public-sector spending drops.
Market Data | Mar 29, 2018
AIA and the University of Minnesota partner to develop Guides for Equitable Practice
The Guides for Equitable Practice will be developed and implemented in three phase.