The independent economic think tank ranked U.S. metropolitan areas based on their economic performance and ability to create and keep jobs. Areas with low business costs and a knowledge-based economy fared well, the report said.
Jeff Shay of the University of Montana School of Business heralded the high ranking.
Four researchers at Milken used job, wage and salary and technology growth to rate the top 318 metropolitan areas in the United States. The top 200, according to size, were ranked together, as were the smaller areas.
Missoula performed well because of its low business costs and highly skilled work force. Those costs include energy, taxes, labor and particularly low office rents, the report said. The report also listed access to lending and investing capital as factors.
The report also cited the robust health services industry, Missoula's "college-town lifestyle" and access to nearby Bitterroot National Forest as major contributors to the area's economic growth.
Ranked just below Missoula, at two and three respectively, are New Mexico cities Las Cruces and Santa Fe.
Both ranked in the top five of last year's listing because growing retiree population in those areas has fueled economic growth. Also, Las Cruces has received a recent windfall of federal largesse in the form of development, the report says, making its continued success sensitive to funding cutbacks. Rounding out the top five small metros were Dover, Del., and Casper, Wyo.
So what does this mean to Missoula?
The financial scene in the areas has been percolating lately, Shay said.
"Some funds are just growing. That's a perfect example. Venture and angel investing funds rely on wealthy individuals to invest money. Attention like this makes Missoula more attractive," he said.
Dick King, head of the Missoula Area Economic Development Corp., said rankings like these can attract smaller companies and encourage them to grow.
"Obviously, Missoula has a creative, energetic and diverse economy. When you get this kind of ranking it helps to reinforce what we have to say, and it reaffirms to businesses in Missoula why they are here," he said.
King pointed to the health care industry and the growth of the business service sector.
"That's a small category that's growing even more," he said.
Business services include companies like Pyron Technologies, which has found a niche providing technical and information services to the health care industry, and environmental engineering firms, which are flourishing in Missoula.
Missoula is a regular when it comes to national rankings of cities. Last spring Missoula came in second in Inc. Magazine's top small cities for business growth.
Shay wondered if the rankings had a snowball effect.
Did Inc.'s ranking influence Milken's?
Skip Rimer, a spokesman for Milken said the focus by the think tank's researchers were on its own data and not the buzz about a place.
Reporter Robert Struckman can be reached at 523-5262 or rstruckman@missoulian.com
Read the report
Find the report online at www.milkeninstitute.org
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