A new report reinforces indications that San Luis Obispo County’s economy is on the upswing.
The San Luis Obispo-Paso Robles metropolitan area was ranked 25th on the Milken Institute’s Index of Best Performing Cities in the country — the first time the region has cracked the top 25 since 2003. The ranking is especially dramatic considering the area was rated 106th in 2012.
“Impressive one-year and short-term job growth along with good high-tech GDP growth fueled this meteoric rise up the rankings — the largest gain of any large metro in the Top 25,” the Milken report noted.
The index uses job, wage and technology performance to rank the nation’s large metropolitan areas in one-year and five-year increments.
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The Milken Institute is an independent economic think tank based in Santa Monica that publishes research and hosts conferences that apply market-based principles and financial innovations to a variety of societal issues in the United States and internationally.
The SLO-Paso metropolitan area ranked an impressive sixth in one-year job growth but 93rd over the last five years; 36th in one-year high-tech gross domestic product growth and 16th over five years.
Wage growth, however, was weaker than job gains. Compared to other large metro areas, the region ranked 91st in one-year wage growth and 90th in wage growth over the last five years.
The SLO-Paso metropolitan statistical area represents all of San Luis Obispo County with a combined population of more than 274,000 in 2011, classifying it as a “large city.”
Service industries were the driving factor in employment growth, with the area creating 950 new administrative and support service jobs and 600 new restaurant and bar jobs between 2011 and 2012, the report said.
Because of the area’s retail and tourism focus, “the metro benefited from the ripple effects of rising incomes — for example, consumers’ increased thirst for local wine,” the report said.
Still, the report said the county’s success was tempered by statewide budget issues.
“California’s budget challenges have weakened the job market at major government employers like Cal Poly, Atascadero State Hospital and the California Men’s Colony,” the report noted. “Newly added fiscal sources should limit the impact going forward assuming revenue meets projections.”
Local economic experts said the report reflects an upswing they’ve already noted.
“SLO County being placed 25th of the Top 25 best performing cities by the Milken Institute is a great accomplishment,” said Michael Manchak, president of the Economic Vitality Corp. of San Luis Obispo County.
“The region’s economic performance since the recession has been recognized as one of the strongest in the West, and that certainly plays an important role in contributing to this coveted designation. It speaks equally to the local quality of life and economic performance,” he said.
San Luis Obispo City economic development manager Lee Johnson agreed, adding: “It’s definitely confirmation of what we feel happening.”
Johnson said the measures Milken uses in its index such as high-tech gross domestic product and job growth are important to getting an accurate idea of an area’s economic performance — he has plans himself to include those same measures in the city’s next economic development report.
The only thing Johnson said he wishes were different about the Milken Index is its use of San Luis Obispo, Paso Robles and other cities in the county as one entity.
“There are some things that can cloud what is happening in individual cities,” Johnson said about using metropolitan statistical areas. “I’d personally like to see more what is happening just in San Luis Obispo, since, you know, that is my area.”
Paso Robles City Manager Jim App said the report seems to follow with what he’s seeing in the city — large Paso businesses such as IQMS, a global software firm, Santa Cruz Biotechnology Inc., one of the world's largest suppliers of antibodies produced in animals, and Justin Vineyards and Winery have had huge growth this year, he said.
The report also follows the findings from the semi-annual countywide Economic Forecast, he added.
“When we listen to the most recent countywide reports, they’re saying the same things,” App said. “We hear that our economy is rebounding faster than the rest of California.”
And they’re not predicting an end to the rebound in the near future.
“The local indicators are that the recovery is continuing, and it seems to be stabilizing,” App said. “We predict that that stabilization is going to continue in the next few years — which is nice considering the (ups and downs) of the recession.”
Other top metro areas in the report included Austin-Round Rock-San Marcos, Texas, in the No. 1 spot, and (in descending order) Provo-Orem, Utah; San Francisco-San Mateo-Redwood City, Calif.; San Jose-Sunnyvale-Santa Clara, Calif.; and Salt Lake City, Utah.
By the numbers
A look at how the San Luis Obispo-Paso Robles area was ranked in various categories:
- 6th in 1-year job growth
- 16th in 5-year high-tech GDP growth between 2007-2012
- 36th in 1-year high-tech GDP growth between 2011-2012
- 90th in 5-year wages/salaries growth
- 91st in 1-year wages/salaries growth
- 93rd in 5-year job growth
- 103rd in high-tech GDP concentration 2012
How the San Luis Obispo-Paso Robles area has been ranked through the years:
2006: No rankings done this year
The top 25
Here are the top 25 best-performing large cities for 2013, as ranked by the Milken Institute:
- Austin-Round Rock-San Marcos, Texas
- Provo-Orem, Utah
- San Francisco-San Mateo-Redwood City
- San Jose-Sunnyvale-Santa Clara
- Salt Lake City, Utah
- Seattle-Bellevue-Everett, Wash.
- Dallas-Plano-Irving, Texas
- Houston-Sugar Land-Baytown, Texas
- Boulder, Colo.
- Greeley, Colo.
- Charleston-North Charleston-Summerville, S.C.
- San Antonio-New Braunfels, Texas
- Raleigh-Cary, N.C.
- Nashville-Davidson-Murfreesboro-Franklin, Tenn.
- Denver-Aurora-Broomfield, Colo.
- Fort Worth-Arlington, Texas
- Corpus Christie, Texas
- Trenton-Ewing, N.J.
- Fort Collins-Loveland, Colo.
- Portland-Vancouver-Hillsboro, Ore./Wash.
- Laredo, Texas
- Cambridge-Newton-Framingham, Mass.
- Lafayette, La.
- SLO-Paso Robles