Phoenix-Mesa-Scottsdale continued its rise among Milken Institute’s Best-Performing Cities Index, ranking number 4 in 2022, up from seventh last year. The Index places cities into five tiers and is divided among large cities and small cities and ranks the top tier cities. The tiers are meant to help better compare economic performance among peer cities and are defined by the range of scores for both large and small city lists. Most cities in Arizona moved up in rankings this year, some making great strides.

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The Milken Institute Best-Performing Cities Index has been published annually since 1999 and released the 2022 report earlier this year. Job creation, wage growth and high-tech output are core measures of the index and starting with 2021 housing affordability and broadband access were added. The only difference this year was that housing affordability and broadband access came from different sources, due to delays in Census Bureau data releases.

Arizona has two metropolitan areas in the large city rankings, which contains 200 metropolitan areas, and the other five are in the small city rankings which encompasses 201 metropolitan areas. As seen in Exhibit 1, Phoenix remains in the top tier of cities followed by Tucson, Sierra Vista-Douglas, Yuma, Prescott, and Lake Havasu City-Kingman in Tier 2. Both Sierra Vista-Douglas and Yuma shifted from Tier 3 in 2021 to Tier 2 in 2022. Flagstaff also advanced from Tier 4 to Tier 3 this year.

Sierra Vista-Douglas had one of the largest gains among all small cities, moving up 86 places to rank 14th in 2022. (Only four other cities made larger increases with Lewiston ID-WA having the largest gain, going from a rank of 118 in 2021 to 17 in 2022.) Flagstaff made great gains as well, moving up to rank 98 among small cities this year from a ranking of 169 in 2021. This prompted Flagstaff to move into Tier 3.

Two Arizona metropolitan areas lost ground this year. Lake Havasu City-Kingman fell 32 spots to rank 48 among small cities in 2022. Prescott also fell, moving down 21 places to 46.

Western states were well represented among the top ranked cities this year. Nationally, Provo-Orem, Utah maintained the top spot among large cities for a second year in a row. Logan, UT-ID moved up to the top of the small cities list after being in the number two position on last year’s list (Exhibit 2).

Metropolitan areas tracked on the MAP Dashboard rate very well on the Milken Institute Best-Performing Cities Index. All but one of the geographies included on the MAP Dashboard moved up in rankings for 2022, with four listed as Tier 1 cities: Austin-Round Rock, Salt Lake City, Phoenix-Mesa-Scottsdale, and Colorado Springs. Las Vegas was the only metropolitan area on the MAP Dashboard to drop in rankings for 2022, moving down 61 places to rank 149 among large cities, placing it in Tier 4 (see Exhibit 3).

 

Valorie H. Rice is the Senior Business Information Specialist at the Economic and Business Research Center (EBRC) in the University of Arizona’s Eller College of Management.