SRRI developed the Prosperity Index to provide business and community leaders in the Sacramento Region a valuable tool to measure economic prosperity and track its performance against competitor regions in order to evaluate the competition, identify opportunities for improvement, and impact change in the Region.  Along with the national average, ten competitor regions were chosen as benchmarks based on feedback from regional economic development organizations regarding metropolitan areas that often compete with the Region for business location and expansion projects.  SRRI will update the Prosperity Index annually - which measures indicators in the three areas of Business, People and Place. The Business component will be updated quarterly in order to allow for more frequent evaluations of the local business climate.
The Sacramento Region placed ninth on the 2007 PROSPERITY INDEX, posting a score of 6.5 out of a possible 10, as shown in Figure 1. Similar to previous years, Sacramento received a strong score on the People component, but fairly weak scores on the Business and Place components, placing the Region toward the lower end of the list. Among the five competitor regions in California, Sacramento ranked in the middle, behind the SF Bay Area and San Diego and in front of Los Angeles and the Inland Empire (Riverside/San Bernardino). In relation to its main competitors, the Sacramento Region presents economic prosperity that is somewhat below average, giving it a modest competitive position.

 

The Sacramento Region moved up to ninth place among its main competitors on the BUSINESS component of the Prosperity Index for the first quarter of 2008. This marks a notable improvement for the Region which was at the bottom of the list for this measure in the fourth quarter of 2007. The Region received a score of 4 out of a possible 10, up from 2.5 in the last quarter. Although the Region remains below the national average, it ranked above two of the other measured California regions, San Diego and the Inland Empire. These other two California regions dropped in this update, demonstrating the effects the economic downturn is having on business climate indicators.

Austin displaced Salt Lake City at the top of the list, the leader since the second quarter of 2007. A bulk of the competitive regions ranked above the national average (including the Bay Area and Los Angeles), further illustrating the strength of these markets in the western United States. The Sacramento Region received a decent score on only one indicator, Payroll Growth, while the other measures posted somewhat low scores. Five of the six indicators improved since the last quarter in the Sacramento Region (with Payroll Growth showing the largest jump), increasing from notably weak scores in many cases. Only Establishment Growth dropped this quarter. Despite recent improvements, overall, the Sacramento Region presents a somewhat low competitive position in terms of business climate.