Raleigh Ranked Second Best-Performing Big City in the Nation

    by CLC Staff

    As our faithful readers are well-aware, we are never shy around here about trumpeting North Carolina’s seeming omnipresence on the top-tier of virtually every list that gauges economic and business success. Whether it’s the Tar Heel state ranking #1 in the nation for women in the tech sector, #1 in the nation for business, or even #1 for turkey production, North Carolina is on a decade-long winning streak.

    The latest accolades come to our fair capital city and stomping grounds. On the heels of Business Insider rating Raleigh the 13th most livable city in the country, Raleigh was ranked by the Milken Institute as the second best-performing big city in the nation for the best mix of jobs, compensation, and affordability — moving up one spot from #3 in 2023. The city of Austin, Texas snagged this year’s top spot.

    The group’s annual “Best-Performing Cities” (BPC) rankings analyze 403 of the nation’s metropolitan areas, dividing them into 200 large and 203 small cities. They are then evaluated within three broad categories that cover labor market performance, high-tech impact, and access to economic opportunities using 13 indicators. They are then categorized into five tiers, with Tier 1 being the highest-ranked cities and Tier 5 being the lowest-ranked cities. This year, the report looked at data collected between January 2022 and August 2023.

    There were only 11 large cities in the entire nation that were classified as Tier 1, and North Carolina has two of them. In addition to Raleigh there is Charlotte, which came in at an impressive #10 in the nation.

    From the Milken report:

    Raleigh, NC, gains one spot from last year, ranking among the top 20 best-performing metro areas for the 12th year in a row. Raleigh’s high position is bolstered by its performance on wage, job, and high-tech concentration measures, as well as its strong position on all other metrics in the BPC ranking. Indeed, Raleigh places in the top quartile of every indicator on the index. The area has managed to attract high-tech firms and high-quality talent, driven by its proximity to three major universities located in Raleigh and the neighboring Durham-Chapel Hill metro areas: North Carolina State University, Duke University, and the University of North Carolina at Chapel Hill.

    Between 2021 and 2022, two segments of Raleigh’s economy stood out as drivers of its job and wage growth: business and professional services and leisure and hospitality. With several industry groups classified as high-tech, growth of the business and professional services sector has provided the Raleigh area with a reliable increase in high-wage jobs. In fact, business and professional services jobs have grown by 83 percent in Raleigh since 2017. However, the segment of Raleigh’s economy with the largest one-year wage and job growth is leisure and hospitality, with its employment bouncing back to nearly pre-pandemic levels by the end of 2022. During 2022, the 17.8 million visitors to Raleigh spent $2.9 million, exceeding expenditures in 2018 and 2019, and indicating a close to full rebound for its broader tourism industry.

    Raleigh also stands out among Tier 1 cities for its performance on access to economic opportunities indicators, such as housing costs and broadband, because it is the only Tier 1 large city to rank in the top quartile on both metrics. Building on the post-pandemic construction boom, the Raleigh metro has prioritized housing projects, ranking 12th among all US cities for new apartment construction. Nonetheless, Raleigh still needs at least 17,000 more housing units to meet demand in 2023, according to a report by Zillow. Whether new construction can keep pace with the demand for housing will play a large role in determining Raleigh’s status as a best-performing city moving forward. But with low economic inequality (38th in the Gini index), high resilience (23rd in resilient households), and rising access to broadband (36th), Raleigh is on track to maintain its top spot in the ranking.

    It should be noted that it is not, strictly speaking, cities themselves that are being analyzed in this report, but rather the Metropolitan Statistical Area in which the city sits. Metropolitan statistical areas (MSA) are delineated by the U.S. Office of Management and Budget (OMB) as having at least one urbanized area with a minimum population of 50,000. Metropolitan areas are reviewed and possibly redefined after each decennial Census. North Carolina has 44 Metropolitan Statistical areas.

    One may download a PDF of the Milken Institute’s report here. There is also a nifty interactive version here.