U.S. cities fared worst in recession, recovery - study

Jobs are listed on a board at a Workforce Alliance Career Center in Boynton Beach, Florida October 2, 2009.

WASHINGTON (Reuters) - The economic recession that began in 2007 and swept around the globe was especially devastating to metropolitan areas in the United States, according to a new ranking from the Brookings Institution that found economic recovery is also coming last to those places.

Metropolitan areas, as defined in the Brookings "Global MetroMonitor" released on Tuesday, are collections of cities and suburbs that act as centers of economic activity.

"Overall, the Great Recession appeared to hit U.S. metros hardest, while it improved the relative position of metros outside the United States and Europe," the report found.

Brookings, along with the London School of Economics and Political Science and Deutsche Bank Research, ranked the economic vitality of areas before during and after the recession, looking primarily at income and employment.

Although the recession officially ended in the summer of 2009 in the United States, metropolitan areas in Asia, Latin America and the Middle East experienced the most growth over the last year, according to the report, which looked at the 150 biggest areas in the world.

Istanbul was ranked as having the best economic performance during the recovery followed by Shenzhen, Lima, Singapore and Santiago, all of which are in South America or Asia.

"The Great Recession has accelerated a shift in economic growth," said one of the report's authors, Alan Berube, at a press conference on Tuesday.

The highest ranking U.S. city during the recovery is Austin, Texas, which comes in at 26th place. It is the only U.S. area in the top 35 performing metros.

Before the recession, Las Vegas, Nevada, was the 13th best performing metropolitan area in the world. Phoenix, Arizona, was the 20th, Austin was 25th, and Riverside, California, 28th. Las Vegas now ranks 146 out of 150.

A survey released last month by the National League of Cities found that U.S. cities suffered more harm to their fiscal condition in the latest recession than during any other economic decline in nearly a quarter of a century.

That survey found that most cities are just beginning to see the effects of the downturn, pushing recovery off for years.

The Brookings report said certain industries, such as manufacturing, had helped bolster some metropolitan areas' economies while dragging on other areas' fortunes.

Construction had been the driving force of many U.S. cities' growth before the housing bubble burst and then became a handicap during the recession, it added.

Still, "non-market services" such as government, health and education were "a boon for European and American metros during the recession, signaling that those industries remained relatively healthy amid market turmoil," Brookings reported.

In the future, cities, with their high population density and jobs concentration, "could drive regional and national prosperity in the decades to come," the report said.

But in the current recession, national economic performance has been an important factor in the cities' fortunes.

It pointed to Dublin, Ireland, where the nation is dealing with a sovereign debt and banking crisis after a decade of growth. In the years before the recession, which Brookings counts as 1993 to 2007, Dublin had the sixth highest performing economy. During the recovery, it is dead last.

(Reporting by Lisa Lambert; Editing by Andrea Ricci)