Region Forward Blog

Metropolitan Washington: An everlasting bubble?

Aug 18, 2011
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It’s conventional wisdom that metro Washington exists in a bubble protected from the worst effects of economic slowdowns and recessions through which other parts of the country have to suffer. The direct and indirect effects of the federal government by design a steadfast employer and investor are the basis of the bubble surrounding the nation’s capital.

This bubble appears to have held up well during the current period of economic turmoil. This region is one of the few places in the US where jobs have been created and the housing market has stayed strong. This success has apparently had a major impact on people’s perception – a new Gallup poll released this week indicates that DC residents are the most economically confident by far in the entire country.

As The New York Times reported Monday the District with an index score of 11 (calculated based on whether people think the economy is improving or worsening) is in fact the only place in the US where the Economic Confidence Index is positive. Next on the list? North Dakota – 24 index points behind with an index score of -13. Maryland and Virginia are also in the top ten list of the most confident states and we bet if the Northern Virginia and Suburban Maryland portions were broken out their numbers would look similar to DC’s.

Despite relatively positive economic conditions and perceptions this is not time for Washingtonians to become complacent. As recent battles over the budget and the debt ceiling have proven cutting the size and spending of the federal government is a key target for many in Congress. Metropolitan Washington needs to continue and accelerate diversification of its economy to maintain competitiveness and be prepared to weather future economic storms.

As we noted earlier this month Brookings encourages regions to engage in “Metropolitan Business Planning” and focus energy and investments on identified key sectors for future growth. Biotechnology health care higher education and information technology are all major and growing fields in this region. What other sectors should be added to this list? What fields would you like to see develop hubs in metropolitan Washington?

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