(March 22, 2024) - The Milken Institute released its Best-Performing Cities (BPC) for 2024. This annual ranking looks at how well metropolitan areas are doing relative to others across several areas of economic vitality. The Milken report separates cities into two lists, large (200 total cities) and small (203 total cities), totaling 403 metropolitan areas. Within Arizona, Phoenix and Tucson are found on the large city list, while all others are on the small city list.
The BPC index reflects metro areas' effectiveness at promoting economic growth while remaining attractive to residents and businesses.
- Labor market performance includes short- and medium-term indicators of trends in employment and wages.
- High-tech impact captures the presence and growth of high-tech industries.
- Access to economic opportunities reflects cities' ability to remain attractive to residents by providing access to services and building inclusive and sustainable social structures.
Changes in employment and wages stand out as the main correlates of cities' ranking, with noticeable differences in job and wage growth across tiers.
Interestingly, while job growth was stronger in large cities (compared to small cities) between 2021 and 2022, the same is not true for wages (Figure 4). Wages grew by the same amount (12.6 percent) in Tier 1 large and small cities, and Tier 2 small cities outpaced Tier 2 large cities in terms of wage growth, though the difference was not large (11.1 percent and 10.7 percent in small and large cities, respectively). The parity between small and large cities in wage growth indicates that while small cities are attracting businesses that have tended to have fewer new job openings over the past year, the wages offered by these businesses are competitive (in terms of growth) with those provided by businesses in large cities.
Arizona metropolitan areas did not fare well in the BPC rankings in 2024. Flagstaff improved its rank in 2024, moving 22 spots to 122 on the small city list. All other Arizona metropolitan areas experienced a decrease in rank for this year. Lake Havasu City-Kingman underwent the most precipitous drop, moving 96 places on the small city list from 22 in 2023 to 118 in 2024. This decline was among the largest on the small city list, with only two other areas (El Centro, CA, and Morgantown, WV) falling further.
The report further separates large and small city lists into five tiers, the size of which is based on the distribution of scores for each list. Phoenix and Prescott were considered Tier 1 cities in 2023. For 2024, Phoenix moved down to Tier 2, while Prescott slid even further to Tier 3. Tucson is in Tier 4 in 2024. No Arizona cities landed in either Tier 1 or Tier 5 in 2024, as seen in
Arizona Rankings for Best-Performing Cities 2024
