SLO metro area cracks Top 10 for best performing cities

San Luis Obispo
San Luis Obispo

Citing an expanding high-tech base, strong job growth and Cal Poly’s entrepreneurship programs, the Milken Institute has ranked the San Luis Obispo metropolitan area 10th among large cities in its annual Best-Performing Cities index.

The San Luis Obispo-Paso Robles-Arroyo Grande metro area, which encompasses the county, jumped 14 spots over last year’s results, helped in part by employment growth over the past year.

The index ranks the nation’s metropolitan areas using “outcome-based” criteria including job creation, wage gains and technology trends. Six of the top 25 slots among large metros are in California — four of those in the tech-driven Bay Area — with the San Jose-Sunnyvale-Santa Clara area reclaiming the No. 1 spot after placing fourth for two years in a row, according to a summary of the report.

It does not incorporate measures such as business costs, cost-of-living components, and quality-of-life conditions, which include commute times and crime rates, the report states.

Assets: Cal Poly provides stable employment and attracts talent to the region, according to the Milken Institute report.

“The region is expanding its small high-tech base, but agriculture, tourism, and government employment remain its key industries,” the report said of the San Luis Obispo area. But it lists the state’s severe ongoing drought as a liability that threatens agricultural production and wine-country tourism.

During the annual Central Coast Economic Forecast in November, economist Jordan G. Levine also noted a few other longer-term challenges for the region: diversifying and balancing local growth with water supply concerns, addressing critical infrastructure needs and recruiting skilled workers.

San Luis Obispo County ranked seventh in job growth over the past 12 months, according to the Milken Institute. State government employment continued to recover in 2014, but local government employment is recovering more slowly, the report states, acting as a drag on overall economic growth.

Liabilities: Ongoing drought threatens agricultural production and wine-country tourism, the report states.

The county’s unemployment rate was 4.3 percent in October, down from 5.3 percent in October 2014 and above September’s revised 4.1 percent rate, according to data from the California’s Employment Development Department.

At the economic forecast summit in November, Levine said the county has added nearly 17,000 jobs since 2010, outpacing other Central Coast counties and putting San Luis Obispo “right at the top of the pack with Silicon Valley in terms of growth.”

He said wages are finally starting to rise, and the number of jobs is growing in some subsectors: computer systems design, architectural and engineering services, and management and technology consulting, among others.

Professional, scientific, technical and management employment is still concentrated in the city of San Luis Obispo, as are tech jobs. But virtually every city has seen job growth, especially in tourism-heavy areas including Morro Bay and Pismo Beach.

The Milken Institute credits Cal Poly with providing stable job growth and driving talent to the region. The university “is investing in its campus and will stimulate employment in the construction sector in coming years,” the report states, noting that construction of the 1,475-bed Student Housing South project started in September.

It also mentions Cal Poly’s plans to expand its Center for Innovation and Entrepreneurship downtown to house and encourage student entrepreneurs to learn, collaborate, and create businesses in the community.

Cynthia Lambert: 805-781-7929, @ClambertSLO