Don’t assume Des Moines metro’s rapid growth will continue indefinitely, analyst warns – The Des Moines Register

Economic Growth and Sustainable Development in the Des Moines Metropolitan Area: A Situational Analysis

Executive Summary: A Crossroads for Sustainable Growth

A recent economic analysis of the Des Moines metropolitan area indicates a critical inflection point in its growth trajectory, posing significant challenges and opportunities related to the achievement of the Sustainable Development Goals (SDGs). After a decade of leading the Midwest in economic expansion, the region’s growth rate is flattening, necessitating a strategic re-evaluation by regional stakeholders to ensure long-term progress towards SDG 8 (Decent Work and Economic Growth) and SDG 11 (Sustainable Cities and Communities).

• Economic Deceleration: The region’s status as the fastest-growing major metro in the Midwest is under threat as its growth rate has slowed since 2020, while peer cities have accelerated.
• Sectoral Vulnerability: Job losses in the key finance and insurance sector, a primary driver of the local economy, signal a risk to sustained economic growth and stable employment as outlined in SDG 8.
• Urban Development Concerns: A slight population decline in the city of Des Moines, despite continued suburban growth, raises questions about inclusive urban development and the long-term sustainability of the community, a core tenet of SDG 11.

Analysis of Economic Performance and Alignment with SDG 8

Historical Growth and Current Deceleration

From 2009 to 2020, the Des Moines economy demonstrated remarkable performance, expanding by 53% and growing 2.7 times faster than comparable Midwestern cities. This period of robust expansion was supported by a highly skilled workforce and significant corporate investment, averaging approximately $1 billion annually. However, post-2020 data reveals a softening in this growth, indicating a potential divergence from the path of sustained economic progress envisioned by SDG 8.

Key Economic Sectors and Employment Challenges

The region’s heavy reliance on the banking, finance, and insurance sector presents a significant vulnerability. This industry has recently transitioned from strong growth to net job losses, even as the sector grows nationally. This trend directly impacts the region’s ability to provide full and productive employment.

1. Job Losses: Major employers like Wells Fargo have reduced their workforce by over 1,200 positions since 2022, reflecting national market pressures and creating local economic instability.
2. Slowing Growth Rate: Job growth in the finance sector has been half the rate of other local sectors, indicating a need for economic diversification to build resilience.
3. Technological Disruption: The anticipated advancement of Artificial Intelligence (AI) is projected to further reduce job growth in analytical fields, posing a long-term challenge to maintaining decent work for all under SDG 8.

Urban Development and Progress Towards SDG 11

Population Dynamics and Urban Sustainability

Achieving SDG 11 requires making cities inclusive, safe, resilient, and sustainable. While the 12-county metro area continues to grow, recent census estimates show a slight population decrease within the core city of Des Moines for the first time since the 1980s. This trend could signal challenges related to urban sprawl and the vitality of the city center, necessitating integrated planning to ensure sustainable urbanization and community development.

Infrastructure and Social Cohesion as Development Pillars

The region’s success has been built on strong infrastructure and social capital, key components for achieving SDG 9 (Industry, Innovation, and Infrastructure) and SDG 11.

• Infrastructure Investment: A concerted civic focus on infrastructure, exemplified by the $445 million terminal project at Des Moines International Airport, has created conditions for a larger and more connected economy.
• Social Capital: A culture of community and mutual support, or “Iowa nice,” has been identified as a contributing factor to the region’s economic overperformance. However, recent survey data indicating a decline in this social cohesion is a worrying trend that could undermine the community’s resilience.

Strategic Outlook for Achieving Sustainable Development Goals

Opportunities for Future Growth

Regional leaders have identified several opportunities to guide the next phase of development in alignment with the SDGs.

• Population Milestone: Reaching a metropolitan population of 1 million is a key objective, as it would make the region eligible for larger economic development projects, fostering further growth.
• Favorable Business Climate: State policies, such as a new flat income tax rate, are promoted as incentives for business investment and job creation.
• Sustainable Energy: The availability of cheap, sustainable energy is highlighted as a key asset, directly contributing to SDG 7 (Affordable and Clean Energy) and attracting environmentally conscious industries.

Strategic Imperatives for Stakeholders

To navigate its current crossroads and ensure a future of sustainable and inclusive growth, regional stakeholders, including The Greater Des Moines Partnership, must consider the following actions, reflecting the collaborative spirit of SDG 17 (Partnerships for the Goals):

1. Develop a forward-looking economic strategy that diversifies the industrial base to mitigate risks associated with the finance sector.
2. Invest in workforce development and reskilling programs to prepare for technological shifts like AI, ensuring a just transition for all workers.
3. Implement inclusive urban planning policies to revitalize the city core and manage suburban growth sustainably.
4. Foster initiatives that strengthen social cohesion and community engagement as a foundation for economic and social resilience.

Sustainable Development Goals (SDGs) Addressed in the Article

• SDG 8: Decent Work and Economic Growth

  The article is fundamentally about the economic health of the Des Moines metro area. It discusses economic growth rates (“economy has expanded by 53% since 2010”), challenges to sustaining this growth (“growth rate flattens”), and issues related to employment, such as “job losses in the key finance sector” and layoffs by major employers like Wells Fargo. These topics are central to SDG 8, which aims to promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

• SDG 9: Industry, Innovation and Infrastructure

  The article highlights the role of infrastructure and corporate investment in driving economic success. It specifically mentions the “$445 million project to build a new terminal” at Des Moines International Airport as a key factor that “makes it easier to operate a bigger economy.” Furthermore, it points to the region’s ability to attract “corporate investments of about $1 billion per year,” which is significantly higher than in comparable cities. This focus on infrastructure development and industrial investment directly aligns with the goals of SDG 9.

• SDG 11: Sustainable Cities and Communities

  The analysis is centered on an urban area—the Des Moines metro—and its development challenges. The article discusses population dynamics, including the metro’s overall growth (“metro population increased 6.26%”) and a slight population decline in the core city. The goal of reaching a “1 million population mark” to become eligible for larger economic projects is a clear example of urban planning and management. The article also touches on social cohesion within the community, noting a worrying trend that “Iowans are helping and talking to neighbors less,” which relates to the social sustainability of the community. These themes are at the core of SDG 11.

Specific SDG Targets Identified

1. Under SDG 8: Decent Work and Economic Growth

   • Target 8.1: Sustain per capita economic growth. The article directly addresses this by tracking Des Moines’ economic performance, noting that its “economy has expanded by 53% since 2010” but is now at an “inflection point” where the “rate of its growth has slowed.”
   • Target 8.5: Achieve full and productive employment and decent work for all. This target is relevant to the article’s discussion of the labor market. The mention of “job losses in the key finance sector,” specifically Wells Fargo having “laid off at least 1,200 workers,” points to challenges in maintaining full and productive employment in a key industry.

2. Under SDG 9: Industry, Innovation and Infrastructure

   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… to support economic development. The article provides a clear example of this target with the expansion of the Des Moines International Airport. The text describes it as a “$445 million project” and a “concerted civic effort” that supports a larger economy.

3. Under SDG 11: Sustainable Cities and Communities

   • Target 11.3: Enhance inclusive and sustainable urbanization and capacity for… sustainable human settlement planning and management. The entire article is an analysis of Des Moines’ urban growth. It discusses the city’s 25-year high-growth phase, the goal of reaching a 1 million regional population, and the need for leaders to “consider what comes next, and how to sustain central Iowa’s success,” which is the essence of sustainable urban planning.
   • Target 11.a: Support positive economic, social and environmental links between urban, peri-urban and rural areas by strengthening… regional development planning. The article refers to the “12 central Iowa counties” represented by The Greater Des Moines Partnership. The focus on the entire region’s growth and the goal of reaching a 1 million population mark for the collective area demonstrates regional development planning in action.

Indicators for Measuring Progress

1. Under SDG 8: Decent Work and Economic Growth

   • Implied Indicator (for Target 8.1): Annual growth rate of real GDP. The article provides several metrics that serve as proxies for this indicator, such as the statement that “since 2010, Des Moines’ economy has expanded by 53%” and the concern that the “rate of its growth has slowed.”
   • Implied Indicator (for Target 8.5): Unemployment rate or employment figures by sector. The article provides specific data points related to this, such as the “job losses in the key finance sector” and the fact that “Wells Fargo… has laid off at least 1,200 workers since April 2022.” It also notes that “finance industry jobs have only grown at half the rate of jobs in other central Iowa sectors.”

2. Under SDG 9: Industry, Innovation and Infrastructure

   • Mentioned Indicator (for Target 9.1): Investment in infrastructure. The article explicitly states the investment value for the airport expansion: a “$445 million project to build a new terminal.” It also quantifies corporate investment levels at “about $1 billion per year.”

3. Under SDG 11: Sustainable Cities and Communities

   • Mentioned Indicator (for Target 11.3): Population growth rate. The article provides precise figures that can be used to measure this indicator, stating that “from 2020 to 2024 the metro population increased 6.26%.” It also notes the population change in the city proper, which “had shrunk slightly to 213,096 people from 214,133.”
   • Implied Indicator (for Target 11.3): Social cohesion or community engagement. While not a formal UN indicator, the article implies its importance by citing “past surveys showing that its residents are more likely talk to and help neighbors” as a factor in economic success. The warning that “Iowans are helping and talking to neighbors less” is presented as a measurable, negative trend.

Summary of SDGs, Targets, and Indicators

Source: desmoinesregister.com