• 2013 GMP change: -2.2% (tied-7th worst)
• 2013 change in employment: -1.9% (tied-5th worst)
• Projected 2014 GMP change: -3.8% (2nd worst)
• Unemployment rate: 8.6% (66th lowest)
Many of the nation’s economies that have contracted the most do not share much in common. These cities are geographically diverse, located from the Northeast to the Gulf Coast and the Midwest to the West. They also have very different economies. Charlottesville, Virginia, and Binghamton, New York, are home to large universities, while in Decatur, Illinois, the largest employers are in the manufacturing sector.
Local economies often rely on one production or trade sector. As long as the sector is booming, it can be a source of economic and job growth, but there can be a downside to this reliance. Local economies often follow the cycles of large companies manufacturing products for the global markets in their backyards, Alec Friedhoff, senior research analyst at the Brookings Institution, told 24/7 Wall St. “If you’re a small metro area depending on a vulnerable export sector, once that industry goes, you’re in big trouble,” Friedhoff said. In one prominent example of this, Caterpillar cut hundreds of jobs in Decatur last year in response to a global slowdown in the mining industry. Decatur’s economy shrank by nearly 5% last year, and no metro area had a larger proportional job loss.