Olympia-Tumwater rises to 8th among best-performing cities in 2025

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The Olympia-Tumwater metropolitan area climbed up to the eighth place in the Milken Institute’s 2025 Best-Performing Cities Index.

The metropolitan area secured its position in Tier 1 status for the second consecutive year, according to a Janaury 2025 report

According to the index, the milestone solidifies the City of Olympia’s standing as one of the fastest-growing economic hubs in the United States. 

The annual report from Milken Institute, a non-partisan think tank, evaluates metropolitan areas based on a series of economic metrics, such as job creation, wage increases, high-tech GDP growth and access to economic performances. 

The report is globally recognized as a benchmark for assessing economic health and identifying success indicators in development strategies. 

“Olympia–Tumwater had the fastest-growing high-tech sector in the country from 2018 to 2023,” the report noted. The metropolitan recorded a significant 111% growth in high-tech GDP during that period. 

Additionally, the metro area also demonstrated strong performance in one-year, high-tech GDP growth, ranking seventh nationally with a growth rate of 14.9%. 

The city’s high-tech sector has been driven by growth in industries, such as computer systems design, software publishing and data processing. The report noted that these industries collectively make up 3.5% of Olympia’s employment base. 

 “At the 71st position, its high-tech concentration ranking is up 34 spots from last year, a remarkable single-year improvement,” the report added. 

Labor market, inclusivity 

In the 2025 rankings, Olympia-Tumwater’s labor market stood out due to its improvements in wage growth and job creation. 

The metropolitan area ranked seventh in one-year wage growth, reflecting a 9.6% increase from 2022 to 2023. 

The report further revealed, “Olympia’s professional and business services sector grew by 24.3 percent from 2018 to 2023, 15.5 percentage points faster than the sector’s national growth.” 

Complementing this growth was Olympia’s short-term job market performance where the city ranked 19th nationally. 

“The metro’s information sector grew by 11.9 percent over the same time frame, compared to its 6.7 percent national growth,” the report detailed. 

The government sector, which employs nearly one-third (32.8%) of Olympia’s workforce, has been recognized in stabilizing the local economy. 

In terms of income equality, the Milken Institute emphasized “Olympia-Tumwater is one of the least unequal metros in the country, ranking fourth in the Gini Index.” 

A major contributor to this ranking is Olympia’s substantial share of well-paying government jobs. 

As the report explained, “The government sector provides the city with a stable foundation of employment that is less vulnerable to economic swings than other employment sectors.”  

Olympia’s economic stability has positioned itself as a benchmark for inclusive economic growth, which prioritizes opportunities across different population segments, the report noted. 

Strains in housing market 

Despite its economic achievements, Olympia-Tumwater faces significant challenges in housing affordability. 

According to the report, Olympia placed second to the last among Tier 1 large cites and 132nd overall. 

“Housing shortages are severe in cities throughout the state of Washington, and Olympia faces some of the worst housing affordability conditions,” the report stated. 

A 2022 analysis cited by the Milken Institute found that Olympia’s housing stock was 6.4% below what is needed to meet current demand.

The report added, “Maintaining a balance between growth and affordability will likely be key in determining its performance in future editions of the BPC ranking.” 

Without addressing the lack of affordable housing, Olympia may struggle to sustain its economic growth as population growth continues to rise and intensify the strain on local housing market, the findings revealed. 

The report also stressed that targeted policies are necessary to combat these shortages, pointing out that local governments hold a responsibility in alleviating housing problems. 

Olympia’s rapid GDP growth 

Contributing significantly to the metro’s economic trajectory, Olympia-Tumwater’s high-tech GDP growth remains a factor. 

“Olympia’s best-in-nation five-year high-tech GDP growth has been primarily driven by the computer systems design, software publishing, and data processing industries,” the report stated. 

In addition to driving local economic growth, the industries mentioned helped Olympia climb the rankings among large metropolitan areas for high-tech concentration. 

At the same time, the city’s overall high-tech GDP concentration remains relatively modest, placing 71st among large metros. 

Nonetheless, the rankings represents a considerable improvement, with Olympia surging 34 spots in one year. 

Top 10 best-performing large cities 

  1. Raleigh, NC

The report ranks Raleigh first because of its performance in many economic areas. It excels in its high-tech sector, labor market and access to opportunities. 

  1. Ogden-Clearfield, UT

Ogden-Clearfield is second due to its economic opportunities. The report noted the city has low income inequality. 

  1. Salt Lake City, UT

Salt Lake City ranks third because it performs well in all categories. The report reveals its economic growth in high-tech industries and the labor market. 

  1. Huntsville, AL

Huntsville is fourth for its fast-growing economy, which is highly supported by its aerospace industry. The report indicates the sector is a major driver of its success. 

  1. Colorado Springs, CO

Colorado Springs takes fifth place due to its recovery from natural and economic problems. The report credits the metro area for its resilience and steady economic growth. 

  1. Austin-Round Rock, TX

Because of its consistent labor market growth, Austin ranks sixth. According to the report, Austin has maintained steady progress in jobs and wages. 

  1. Fayetteville-Springdale-Rogers, AR-MO

Fayetteville is seventh for its growth and housing affordability. The report noted it has kept housing affordable despite a growing population. 

  1. Olympia-Tumwater, WA

Olympia-Tumwater ranks eighth due to its rapid high-tech GDP growth. The metropolitan had the fastest-growing high-tech sector in the country from 2018 to 2023. 

  1. Palm Bay-Melbourne-Titusville, FL

Due to its strong labor market performance, Palm Bay ranks ninth. The report explained it had one of the highest wage growth rates in 2023. 

  1. Boise City, ID

In recognition of its steady economic growth, Boise garnered the 10th spot. The report says it continues to perform well across multiple economic measures. 

Comparisons with other cities 

As part of its analysis, the Milken Institute’s 2025 report identified a wider trend of smaller metropolitan areas outperforming their larger counterparts in economic growth. 

“This year’s ranking illustrates a key trend among US large metros that reflects the rising performance of relatively less populous big metropolitan areas, such as Olympia–Tumwater, WA, Huntsville, AL, and Fayetteville–Springdale–Rogers, AR–MO,” the report stated. 

Large metropolitan areas with severe housing affordability challenges, such as San Francisco and Orlando, have seen their rankings decline. 

“The rise of less populous areas comes as many large metros face severe housing affordability challenges,” the report added. 

The report also indicates the distinct advantage smaller metros like Olympia possess in attracting new residents and businesses alike. 

As a result of its economic progress, Olympia’s strengths in high-tech growth and labor market performance elevate its standing among Tier 1 metros. 

For example, Raleigh, North Carolina, which secured the top spot in the 2025 rankings, reported a five-year high-tech GDP growth of 42.2%.

The report noted it is significantly lower than Olympia’s 111%. However, Raleigh outperformed Olympia in housing affordability, ranking 30th overall. 

Similar to Olympia, Ogden-Clearfield, UT, which placed second, was lauded for community resilience and low income. Ogden, however, has a smaller high-tech sector, with only four high-tech industries boasting a location quotient (LQ) above one, compared to Olympia’s rapidly expanding tech footprint. 

Another, Palm Bay-Melbourne-Titusville, FL, ranked ninth, benefited from its strong aerospace industry and high-tech GDP concentration. But, like Olympia, it also faces concerns in housing affordability and community resilience.  

Comments

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  • BobJacobs

    These national rankings are a dime a dozen. Depending on the criteria used, different cities will come out on top.

    This one is just about economics. Very important, but not everything. Quality of life?

    Bob Jacobs

    Tuesday, January 28 Report this

  • peterpumpkinhead

    Wait, what?…..expanding hi tech sector? I didn’t realize Oly-Tumwater had a high tech sector of any note.

    Tuesday, January 28 Report this

  • BillString

    An expanding high-tech sector, huh? I don't think we have enough Teslas per capita to back that up. We definitely have a good start on the increasingly obvious homeless problem that places like Silicon Valley have though, so its a start?

    Tuesday, January 28 Report this

  • Southsoundguy

    "hey our dumb line is going up so things are peachy!" GET THE VAGRANTS OFF THE STREETS!!!

    Tuesday, January 28 Report this