By Jeff Kiger
Post-Bulletin, Rochester MN
Despite being mostly "a one-trick pony," Rochester is one of 35 metro areas that avoided recession much longer than the rest of the country.
Using economic data from the past 15 years, MSNBC.com identified 35 communities that weathered recessions — including the current one — lightly. Recessions are periods in which business activity declines.
"Rochester entered recession in January 2009; that is very late," said investigative reporter Bill Dedman. "At that point, only 20-some metro areas out of 381 were out of recession."
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What surprised Dedman about Rochester as well as many of the other 34 "recession-resistant" metros was that they were "one-horse towns" with one primary employer or industry.
"As a layman, my guess would be that a diverse economy can really ride out a recession the best. It turns out that is not true," Dedman said.
Rochester, of course, is dominated by Mayo Clinic, which employs more than 30,000 locally.
"If you are a one-horse town, you are taking a risk. If Mayo Clinic closed, you would be in a tough place," he said. "As long as you are in an industry where that doesn’t happen, you may have shorter and shallower recessions. You may go in late, suffer less pain and come out early."
Moody’s Economy.com data shows that Rochester was the last metro area in Minnesota to enter recession, with Fargo, N.D., being the only comparable community.
The Twin Cities were ranked as being in recession as early as October 2008. Rochester was judged by Moody’s as still being in an expansion mode as late as August 2008.
Moody’s uses employment, home sales, home prices and industrial production to rank these areas as being in expansion, recovery, at risk of recession or in recession.
Dedman’s article described Rochester’s outlook: "Over the long term, the Moody’s prognosis for Rochester is one that nearly every other part of the nation would envy: The metro area will experience a moderate recession over the course of 2009, then get quickly back on track, as long as health care spending remains high."
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The other recession-resistant communities included ones built around the military, colleges or even dealing with hazardous materials.
Dedman concludes by saying health care spending "might be a better bet than foreign wars or nuclear waste."
For more information, go to Postbulletin.com/weblinks.
MSNBC: "These cities resist recessions, but would you want to live there?
http://www.msnbc.msn.com/id/30216797/
