Des Moines Economy Ranked 2nd Strongest in the Nation

DSM Skyline

From the Des Moines Register (4/6/2013)

By Donnelle Eller

The Des Moines metropolitan area is the second-strongest economy in the nation, behind only Washington, D.C., according to a new study.

“The Des Moines metro has shown resiliency,” said William Fruth, president of Policom Corp., a Florida analytics company that annually looks at the economic strength of nearly 1,000 U.S. cities and towns. Des Moines’ ranking, he said, “doesn’t mean it’s the fastest-growing area. It just means it has an extremely strong and diversified economic foundation” that’s grown consistently for nearly a decade.

“Des Moines has been a top 25 community since 2005,” Fruth said.

Des Moines is becoming the Taylor Swift of awards. Among its recent accolades: Forbes said Des Moines was No. 3 among emerging downtowns, the Business Journals called the metro the best Midwest city for young adults, and the Street calls it the second-best place in the nation to start a business.

Fruth’s company also looked at Cedar Rapids, Davenport and Dubuque, all of which have mostly shown steady annual improvement, key to economic strength, he said. Smaller Iowa cities such as Boone and Pella failed to crack the report’s top 100. Clinton ranked highest at 105 and Oskaloosa lowest at 514. Policom ranked 366 metros and 576 micro areas. The company looked at 23 economic factors, dating back to 1997.

Rankings such as Policom’s indicate the metro area is moving in the right direction, said Jay Byers, chief executive of the Greater Des Moines Partnership, a regional economic development group. “It’s an affirmation that we’ve got a very vibrant economy with a lot of momentum,” Byers said.

Industrial diversity is the Des Moines metro area’s secret weapon, said Byers and Fruth.

The metro area’s unemployment rate was 5.5 percent in February, down from 6.1 percent a year earlier. The state’s jobless rate was 5 percent and the national rate, 7.7 percent.

“We look at long-term tendencies, not just what happened in the last couple of years,” said Fruth, pointing to the region’s track record as a financial services stronghold.

In addition to insurance and finance, central Iowa also has a strong base in bioscience, manufacturing and transportation, said Byers, adding that leaders have worked for years to build clusters around the metro area’s economic strengths.

The Des Moines metro is home to large employers that range from Principal Financial Group, Wells Fargo and Allied Nationwide in finance to DuPont Pioneer and Kemin Industries in bioscience and Deere & Co. in manufacturing.

“I would make the case that we’re the best in the world in insurance and financial services and I would make the case we’re the best in world in bioscience and agribusiness,” Byers said. Along with transportation and production, “we’ve got a lot of great successes.”

Having those strong industrial clusters are important selling points to companies that are looking to invest, Byers said.

The clusters mean the area has the workforce, research, suppliers and other infrastructure needed to support a growing industry. “Whether it’s Iowa State research in bioscience or Drake turning out top actuaries, they’re all factors that enable us to compete globally,” Byers said.

That has helped the area withstand downturns that have pummeled once exploding metro economies in Florida, California and Nevada, especially those built around housing, Fruth said.

“Compared to other metropolitan areas, the Des Moines area has had rapid, consistent growth, both in the size and quality of its economy, which is the definition of economic strength,” Fruth said.

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