Monday, June 7, 2010

Minneapolis About to Surpass Detroit as Midwest's #2 Metro Economy

The Minnesota Twins and Detroit Tigers are battling this year for the AL Central division lead, and last year the Twins beat the Tigers in a one game playoff. But the showdown between these two regions extends beyond baseball.

Minneapolis-St Paul is about to surpass Detroit as the midwest's #2 metro economy. In 2001, Detroit's metro GDP was $183 billion, more than 25% higher than Minneapolis' $142 billion, according to the Bureau of Economic Analysis. By 2008, only $7 billion separated the two regions, with Detroit at $200 billion, Minneapolis at $193 billion.

Unlike Iowa, the Dakotas, Nebraska, and Kansas, Minnesota is not a right-to-work state, yet like other midwestern cities west of Chicago, its largest metro area is doing far better than those east of Chicago. Like Kansas City and Omaha, the Twin Cities have always been stronger in agribusiness than the traditional manufacturing that has defined Detroit, Cleveland, and Pittsburgh.

While agriculture has had to deal with the same productivity-created job losses as industrial manufacturing, the physical production never moved - Iowa still produces corn, wheat, and soybeans, while Minnesota and North Dakota still grow the Hard Red Spring Wheat that has been the primary commodity traded at the Minneapolis Grain Exchange since the 1880s.

The economy of food is still highly important to the midwestern cities west of Chicago, and the region's largest metro area is about to become more economically significant than the metro that used to be the car capital of the world.


  1. Minneapolis has not been challenged in the ways that SE Michigan has. The people I know in Michigan are the scrappiest bunch and can roll with the punches. I don't know how we'd handle losing thousands of jobs and have our main industries halved. The people in SE MI know the rough life. I just pray we never have to face it here in the Twin Cities.

  2. The irony is that Detroit is ahead of many Midwestern areas in technology advancement, and Ann Arbor has a solid plan in place with its SPARK program. The missing piece is exporting industries where the U.S. runs a trade surplus. The battery factories and robotics industries in Michigan are competing with the Japanese just like the automakers.

    Detroit also needs to do more to promote its Canadian border. Labatt Brewing recently moved from Norwalk, Connecticut to Buffalo to be on the Canadian border. With Canadian trade continuing to grow, I've been surprised that the Michigan EDC hasn't done more to play this up.