R
eal GDP in metropolitan areas rose 2.7% in 2023, with the "real estate, rental and leasing" sector contributing significantly to growth. While many metro areas followed national trends, each region has its unique economic story. This article explores the leading drivers of economic growth, focusing on top-performing metro areas in real GDP growth, construction, and real estate.
In 2023, real GDP increased in 348 Metropolitan Statistical Areas (MSAs), decreased in 34, and remained unchanged in 3. The data shows a wide range of growth, from 42.9% in Midland, TX, to -9.3% in Elkhart-Goshen, IN. Three MSAs saw no change: Ithaca, NY, Joplin, MO, and Longview, WA.
The oil and gas sector played a major role in driving growth in many areas. Midland, TX, recorded the highest growth due to increased oil production, with the "mining, quarrying, and oil and gas extraction" industry contributing 41.2 percentage points to GDP growth. Four of the top five MSAs had this industry as the leading contributor.
The construction sector showed mixed results from 2018 to 2023, with 140 MSAs reporting positive growth rates and 188 experiencing declines. States like Idaho, Arizona, and Florida emerged as hotspots for construction growth, while states in the East North Central division saw slowdowns.
Elizabethtown-Fort Knox, KY, led construction growth with a 14.4% compound annual growth rate (CAGR), driven by the development of the BlueOval SK Battery Park. This project is expected to create thousands of jobs and generate billions in construction payroll.
The real estate, rental, and leasing sector also showed robust growth, with 209 MSAs experiencing positive growth from 2018 to 2023. The Villages, FL, recorded the highest CAGR at 14.1%, reflecting its status as a community designed for an aging population. Other MSAs like Jonesboro, AR, saw significant real estate growth due to proximity to Arkansas State University.
Top-performing metro areas in construction and real estate growth include:
Construction:
* Elizabethtown-Fort Knox, KY: 14.4% CAGR
* Clarksville, TN-KY: 10.8% CAGR
* Punta Gorda, FL: 10.6% CAGR
Real Estate:
* The Villages, FL: 14.1% CAGR
* Jonesboro, AR: 12.1% CAGR
* Twin Falls, ID: 10.8% CAGR
