Wednesday, March 24, 2010

Reverse Urbanization in the US

Data released by the U.S. Census Bureau reveals a reverse urban migration trend in the country.

This interactive graph paints the picture.

The recession has played a big role in determining migration trends in the U.S., with most people either staying where they are or returning to where they came from, particularly in big cities. The New York area lost a net 100,000 people in 2009, (down from 220,000 in 2007) while Los Angeles lost a net 80,000 (down from a massive 222,000 in 2007). Chicago lost a net 40,000 residents which is in line with the 52,000 the recession sent packing in 2007. This runs contrary to historical data which shows a net migration of people to big cities, rather than away from them.

Reverse urban migration will decrease the supply of labor and consumers in the cities which could result in lower prices in terms of real estate and consumer goods, not to mention services such as restaurants. In New York, fewer people will impact high-density high-margin businesses such as Starbucks (SBX). Regional focused banks, such as Chase Manhattan, will also have a smaller market to penetrate as they lack national representation like that enjoyed by Bank of America (BAC).

Just an interesting piece of information, especially considering the huge trend seen in China and other emerging markets of mass migration into urban environments which is largely responsible for rising labor costs, increasing inflation and higher consumer spending (all running contrary to current experience in the US on a 3 year view).