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Thursday, January 19, 2012

Detroit Soars in World Rankings

72nd Among Biggest Cities

By Ellen Van Wageningen, The Windsor Star; With Files From Financial Post

WINDSOR, Ont. -- Battered Detroit made a major jump up the rankings of economic performance by the largest cities in the world last year, thanks to an auto industry recovery that has also benefitted Windsor.

The Detroit region, which had languished near the bottom prior to 2010, moved up to 72nd spot among the top 200 metropolitan economies in the world, says a report released Wednesday by the Washington, D.C.-based Brookings Institution.

"On income growth, six U.S. metro areas, including three manufacturing centres in the Great Lakes region (Buffalo, Detroit, and Rochester), ranked among the ten metro areas that outpaced their nations by the largest margins," the report said.

And what has been good for Detroit is also giving Windsor a much needed shot in the arm, said Rakesh Naidu, director of business attraction for the WindsorEssex Economic Development Corporation.

"We are working with a client that's based in the Detroit area which is in the mould, tool and die sector. They're doing some brisk business there, and they're looking at expanding into our area and setting up a new plant. That's just one example of what's happening in Detroit," he said. "We've seen that they're getting more busy."

The Detroit Three automakers increased market share last year as demand picked up and the effect is being felt across the industry, he said. "These are all really good signs."

Another positive indicator is the return of manufacturing of some consumer items to the United States, Naidu said, citing plans to make flat-screen televisions in a plant in Canton, Mich., starting in March.

"As we see more of this and it gets more busy it's going to reflect positively on our economy, as well," he said. Detroit's performance has a bigger impact on Windsor than that of other Canadian cities, particularly in the manufacturing sector.

"The busier the plants in Detroit and the Michigan area, the more we will see uptake of our products," Naidu said. The Windsor region continues to rely heavily on manufacturing, which employs 48 per cent of those in the workforce.

It is also one of the key sectors expected to drive growth in the world's cities in the coming years, according to the Brookings Institution report.

"The relatively stronger recent growth of business and financial services and manufacturing capitals suggests that metropolitan areas most focused in high value export industries may be better positioned to respond to the opportunities offered by worldwide recovery and future global urban growth," said the report.

Detroit, which was at the bottom of the rankings from 1993-2009, was ninth of 57 U.S. cities based on economic output per capita and employment in 2011. It also beat Toronto, Hamilton, Ottawa, Montreal and Vancouver. Windsor is not among the seven Canadian cities included.

The Brookings Institution found gross domestic product per capita in the greater Detroit area increased 2.6 per cent to US$38,671 and employment increased 1.2 per cent in 2011. While that was good compared to many other North American cities, another report released Wednesday by the U.S. Conference of Mayors showed Detroit has recovered only 20 per cent the jobs lost during the recession.

Calgary was the top performing Canadian city, or 51st overall. It increased its GDP per capita by 1.5 per cent to $54,080 and saw employment gains of 2.7 per cent. Edmonton ranked 60th, Vancouver 76th, Toronto 79th, Hamilton 83rd, Ottawa 109th and Montreal 120th.

Shanghai was the top ranked of the 200 cities, which are said to generate 48 per cent of the world's economic activity but contain only 14 per cent of the population. It was listed as having GDP per capita of $9,027, which was up 9.8 per cent from 2010 and having seen employment growth of 5.8 per cent.

Most of the world's fastest growing local economies last year were outside of North America and Western Europe.

"In North America, oil-extraction and (oil)-services capitals such as Houston, Calgary, Edmonton, Tulsa and Dallas moved up the ranks dramatically due to high prices in that sector, while a resurgence in manufacturing redounded to the benefit of Seattle, Milwaukee and Hamilton," the report said.

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