Kotkin splits US into 10 areas, predicts which ones will grow

Joel Kotkin takes a look at which areas of the United States will grow in the next decade. Here are a few of his predictions:

Over the next decade, the Left Coast should maintain its momentum, but ultimately it faces a Northeast-like future, with a slowing rate of population growth. High housing prices, particularly in the Bay Area, are transforming it into something of a gated community, largely out of reach to new middle-class families. The density-centric land use policies that have helped drive up Bay Area prices are also increasingly evident in places like Portland and Seattle. The Left Coast has the smallest percentage of residents under 5 outside the Great Lakes and the Northeast, suggesting that a “demographic winter” may arrive there sooner than some might suspect…

The vast region from Texas to Montana has often been written off as “flyover country.” But in the past decade, no nation in America has displayed greater economic dynamism. Since the recession, it has posted the second-fastest job growth rate in the U.S., after the Inland West, and last year it led the country in employment growth. The Dakotas, Nebraska, Oklahoma and Kansas all regularly register among the lowest unemployment rates in the country.

The good times on the Plains are largely due to the new energy boom, which has been driven by a series of major shale finds: the Bakken formation in North Dakota, as well as the Barnett and Permian in Texas. The region’s agricultural sector has also benefited from soaring demand in developing countries…

Once a sleepy, semitropical backwater, the Third Coast, which stretches along the Gulf of Mexico from south Texas to western Florida, has come out of the recession stronger than virtually any other region. Since 2001, its job base has expanded 7%, and it is projected to grow another 18% the coming decade…

More babies and the migration of families, including immigrants, to this low-cost region suggest an even larger political footprint for the Southeast in the decades ahead. Population growth has been more than twice as fast since 2001 as in the Northeast, a trend that is projected continue in the next decade. The region looks set to become smarter, more urban and cosmopolitan, and perhaps a bit less conservative.

Common factors in the analysis: demographics, particularly the influence of immigration; which industries are booming, with an emphasis on technology and oil/gas; and government restrictions/debt. These are common themes for Kotkin. Two quick thoughts:

1. It would be interesting to see how Kotkin’s predictions hold up. One smart move was to restrict this to ten years out which limits some of the unpredictability. But, predictions by experts are notoriously wrong.

2. The prognosis for the South, Southwest, Plains, and some of the West is much better than the big city Midwest or the Northeast. There has been quite a shift to these areas in recent decades in the United States but are we close to a point where these areas take over? Just how much staying power does a region like New York have – would it take decades to overcome its inertia?

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