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El Paso Among Top 20 Strongest Metro Areas

El Paso Among Top 20 Strongest Metro Areas

POSTED: Wednesday, June 17, 2009 - 4:14pm

UPDATED: Wednesday, February 17, 2010 - 3:24pm

Brookings Institute Report

AT&T Inc.'s departure may have sullied its image and the recession
brought an end to the boom times, but San Antonio has not taken the
economic beating other U.S. cities have, a new Brookings Institution
report says.

In fact, its economy has outperformed all of the nation's largest cities
through the first quarter of 2009, the study says.

Being a top-ranked economy is nothing new for San Antonio. Just a little
more than a year ago, the city finished second to Oklahoma City in a
Forbes.com study identifying the most recession-proof metro areas.

Alan Berube, a co-author of the report who also is research director for
the institution's Metropolitan Policy Program, said it wasn't one
overriding factor that pushed San Antonio to the top.

Instead, solid scores on a variety of measures were responsible for the
city's ranking.

“San Antonio's numbers look strong precisely because of what your economy
is based on,” Berube said.

The local economy is driven by sectors such as health care and insurance
that didn't fall as badly as other sectors, was shielded from the
downturn by military expansions and, like other cities in Texas, didn't
participate in “the ridiculous run-up in housing prices” early on that
triggered meltdowns in many areas, Berube said.

“San Antonio didn't lose as much in the first place, so it could be ready
to turn around sooner,” he said.

Brookings' MetroMonitor report, which is being released today, provides
what the institution calls “the first ‘beneath the hood' look at the
impact of the recession on metropolitan America.”

It measures changes in employment totals, unemployment rates, housing
prices, the value of goods and services produced by cities and other
factors through the first three months of the year to identify which
cities are performing well and which are not.

Texas is well-represented in the top-performing metro areas.

Austin, Houston, Dallas and McAllen finished third, fourth, fifth and
sixth, respectively, after Oklahoma City at No. 2. El Paso also scored
well at 11th. At the very bottom of the list was Detroit.

San Antonio's standing drew applause from city and county leaders, who
said it can be helpful in attracting more jobs and prosperity to San
Antonio.

“The stability of the economy, the predictability of costs — those are
hard things to beat,” said Mario Hernandez, president of the San Antonio
Economic Development Foundation.

“It speaks volumes about San Antonio's business-friendly climate and our
willingness to embrace new opportunities,” said Mayor Julián Castro. “I'm
not surprised. I am pleased by it.”

Keith Phillips, senior economist with the Federal Reserve Bank of Dallas
in San Antonio, said that while the ranking is good for San Antonio, it
reaffirms what past studies already have shown about how steady the local
economy is and how well it measures against other cities when times get
tough.

He also cautioned against reading too much into the study because it gave
such high rankings to cities that depend on energy markets, which could
have further to fall as the recession continues.

San Antonio isn't an energy-dependant city, and Phillips does not believe
it will fall out of the top 20 metro areas in performance.

The Brookings' report said San Antonio's employment totals dropped by 0.4
percent from its peak in the third quarter of 2008 and its gross
metropolitan product, or productive output, slipped by 0.5 percent. In
those categories, the city is in fourth and sixth places, respectively,
among the large cities.

The increase in San Antonio's housing prices was the ninth best in the
study and its unemployment rate, while higher than a year earlier,
experienced the sixth lowest increase.

The weakest metro areas featured double digit drops in employment totals
and housing prices over the study period.

Housing prices plummeted by more than 30 percent for the year ending in
March in Stockton, Calif., for instance.

Only about a third of the 100 top metro areas avoided a decline in home
prices over the year, the report said.

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