Utah’s largest metropolitan areas rank among the best performing in the country when it comes to economic vitality, a new study finds.
Provo-Orem, Salt Lake City, Ogden-Clearfield, Logan and St. George have all landed at or near the top of their categories in the latest Best-Performing Cities index, a technology-focused ranking produced by the nonprofit Milken Institute and intended to better people’s lives and economic conditions.
“Cities drive economic growth nationwide,” the institute’s authors wrote. “They are the primary locations where businesses create new jobs and workers earn higher wages, keeping the United States competitive in the global economy.”
Provo-Orem reclaimed its spot at the summit of the index’s best-performing large cities, out of 200 similarly sized cities analyzed, after dipping to second last year. The ranking combines measures of growth in jobs, incomes, productivity and the technology sector as well as housing affordability and access to broadband.
The annual index from the California-based economic think tank ranked Utah’s capital city fourth in 2021 among its top-tier larger cities, vaulting from 25th last year, and Ogden-Clearfield came in ninth, up from 22nd.
The wider Provo-Orem metropolitan area at the heart of Utah County and spanning the state’s nexus of tech firms centered on Silicon Slopes was a standout due largely to that sector, according to analysts at the Milken Institute, both for its productivity and sheer number of high-tech industries.
The study called Provo-Orem “a relatively new innovations center” but said it offers “a high quality of life and amenities in the mountain region.”
Provo Mayor Michelle Kaufusi agrees, saying that with mountains to the east and a lake to the west, Provo is a great place to live. She says it also naturally attracts innovators.
“Honestly, it’s in our heritage to be self-efficient,” said Kaufusi. “We’re all about being creative thinkers in Provo and not [being] afraid of starting and running a business.”
Kaufusi said the city is lucky to be a college town that is home to Brigham Young University and close to Utah Valley University. She said the schools produce young, educated hard workers who aren’t afraid to think big.
Kaufusi said her administration has worked hard to make the city business-friendly. She said she is grateful to tech company Qualtrics and home security company Vivint, which were founded in Provo, for choosing to keep local headquarters after they became major companies.
“I’m sure they could have gone anywhere in the world to do their business ... especially as [they] got bigger,” she said of Qualtrics’ founders.
Logan placed second on the study’s list of 201 smaller cities studied, after coming in third last year. St. George finished fourth on that list, as it did in the 2020 study.
Idaho Falls, the Gem State’s second largest metropolitan area, topped the list of best-performing small cities, attributed to its high short-term job growth and solid productivity gains among that city’s high-tech firms.
The Best-Performing Cities index has been mainly built around jobs, wages and high-tech growth in past years but has been modified in light of the pandemic to add metrics on economic inclusion, the authors wrote. The yearly calculation now also takes into account the percentage of city households spending under 30% of their incomes on housing as well as household access to some form of broadband internet access.
Utah homes still more affordable
Cities in the Intermountain West — Salt Lake City, Provo, Ogden, Boise, Phoenix, Denver and Fort Collins, Colo. — saw jobs and wage grow far above the national median, pushing them up in the rankings in 2021. And while many of those cities — including the ones in Utah — are seeing rapidly escalating home prices, analysts reported, their housing costs remain relatively affordable compared to other U.S. population centers.
The study said significantly lower costs have made Provo-Orem, for example, “a recipient of the tech sector’s outmigration from the expensive West Coast.”
Fueled by those new patterns of telecommuting, the migration trend is also thought to be driving a recent spike in housing demand across the Wasatch Front and in Park City and Summit and Wasatch counties, where home prices continue to escalate and housing inventories are at or near all-time lows.
Kaufusi said her administration is planning 30 years down the road to try to retain Provo’s high standard of living, even as the state’s population grows. She said the city wants to make sure there is affordable housing, that crime stays low, that development is sustainable and that the city retain its community feeling. She said this means planning for more infrastructure and trying to increase high-density housing around transportation hubs while protecting residential neighborhoods.
“It all comes back to baby steps. We have to get the infrastructure in the ground, we have to make sure it is what the citizens want, and then we are going from there,” she said of the city’s long-term planning.
In contrast to Utah, several California metro areas — including San Francisco, San Jose and Riverside — declined in their overall standings, dramatically in some cases, largely due to housings costs and unemployment.
“This may indicate the outsized effect of the COVID-19 pandemic on so-called ‘superstar cities’ that have suffered the most local job losses,” the study’s authors wrote, “and the migration of high-tech workers to lower-cost areas as they work from home.”
Global and national forces, including the coronavirus pandemic, have also shaken many cities’ underlying economic performances over the past year, authors wrote. But the top-performing metro areas, including those in Utah, have managed to leverage what they have to remain competitive from a business perspective, “regardless of the nation’s overall economic trajectory.”
“These cities combine steady growth on one hand and dynamic innovation on the other,” they wrote, “particularly through concentrated investment in high-tech sectors that generate positive spillover effects for local communities.”
Utah is better positioned after the pandemic
Salt Lake City and the Ogden-Clearfield area saw some of the highest leaps in the rankings, although Huntsville, Ala., jumped 49 places to reach this year’s 10th spot among larger cities. That, the study said, was part of a national shift upward in the rankings for cities in the South and Intermountain West.
Utah was the only state to have three cities among the top 10 highest-tier metropolitan areas.
In addition to past performance, the index rankings also offer a glimpse of how well cities are likely to recover economically from the impacts of COVID-19. That ability to bounce back, authors wrote, “also relies on the alignment of opportunities in high-tech industries and affordable costs of living.”
Cities with strong and diverse tech sectors “are more likely to demonstrate resiliency in the face of unprecedented economic upheaval” from the pandemic, the institute said. But at the same time, cities will also benefit in their COVID-19 recoveries from greater levels of economic inclusion by offering “a foundation that attracts additional firms and workers — particularly those prioritizing quality of life.”
— Tribune reporter Sara Tabin contributed to this story.