San Diego, L.A. Among Top 5 in Economy Study

Growth in some big U.S. cities appears to have slowed but the economies of several metropolitan areas across the country are maintaining momentum, according to a study released Wednesday.

The accounting firm Grant Thornton said its index of seven economic vital signs for two dozen U.S. metropolitan areas registered a negative reading in this year’s first quarter. It was only the second time in 17 quarters that the growth yardstick has pointed downward.

The index showed the average growth rate of 24 cities declined in the first quarter by 0.30 point from 1988’s final quarter to 108.8. The previous decline occurred in the second quarter of 1987.

Nineteen cities posted declines in their individual indexes based on statistics collected for their areas.

The other five posted various increases. The economies of San Diego, Houston and Miami showed the most improvement, while Los Angeles and Detroit displayed more moderate strength.

Gains in retail sales and employment helped power economic growth in San Diego, Houston and Miami. By comparison, retail sales declined on average for all the cities studied while employment increased.

San Diego’s gains in retail sales and employment were the highest of all the cities.

Houston’s economy improved for the fifth straight quarter, according to Grant Thornton, which said the achievement has been surpassed only by San Diego. In the 12 months ended March 31, Houston’s economic growth was greater than that of all the cities studied except San Diego, Minneapolis-St. Paul and Detroit.

San Francisco, the only other California city studied by Grant Thornton, saw its first-quarter index value dip.

At the other end of the spectrum, Baltimore’s index value dropped the most of the 19 cities that posted declines in the first quarter. Baltimore was followed by St. Louis, Seattle, Chicago and Cincinnati.

The economic indicators used to rank the cities include factory hours, non-farm employment, construction permits, retail sales, business starts and failures, and money supply.