MarketWatch

MarketWatch

LOS ANGELES — We all know the fable of the tortoise ultimately winning his painstakingly measured race against the hare.

Apply that to today’s economy and it’s relatively easy to come up with a winner for MarketWatch’s third survey of the best U.S. cities for business. This year’s victor is the subdued terrapin of regional economies: Des Moines, Iowa — population 556,230.

Des Moines handily beat all comers, including two-time winner Minneapolis-St. Paul, in a survey that was expanded on several fronts for 2009.

Notably, the search for the nation’s best business city included any metro area with a population of more than 500,000, thus expanding the eligible list to 101 from last year’s total of 50. But we also threw in a few wrinkles to see how well local economies held up during one of the toughest years since the Great Depression.

The verdict seems to be that slow and steady wins ... well, you know the rest.

“We’re very much a traditional tortoise,” said Dave Elbert, a business columnist for the Des Moines Register. “We just keep moving ahead slowly and don’t stop.”

You could say Des Moines, the nation’s 90th largest metro area, is at the crossroads of America. It’s where Interstate 35, which stretches from Lake Superior to the Mexican border, crosses Interstate 80, the route that runs from San Francisco to New York.

How did this small metropolis plunked down in the middle of corn country win out? Nothing flashy, really. It just had above-average scores in every one of 10 metrics that MarketWatch examined. Well, not just above average; it was in the top fourth of all but one metric.

Des Moines’ strongest performance was in the unemployment metric, where it had the third-best ranking of all 101 cities. Its jobless rate was 6 percent in September — one of three unemployment data points used — far below the national average of 9.8 percent for that month.

When MarketWatch looked the concentration of companies located in the cities using a variety of metrics, Des Moines never was in an elite crowd. Its lowest ranking was in its concentration of Fortune 1000 companies, where it placed 41st out of 101. But it scored consistently high. That, coupled with its strong economic fundamentals gave it the nod this year.

For this survey, it helps that Des Moines is a smaller metropolis. Having just a few companies on the S&P 500 or Russell 2000 indexes can give a city a high score.

Des Moines’ economy is not terribly diverse, but the companies in its specialty industries — financial services and insurance — are doing well despite trouble among their contemporaries. It also helps that the city is the state capital, which can be a bountiful generator of jobs. Still, that could be hit hard as Iowa deals with new budget crunches.

And though it can fall prey to bone-chilling snowstorms, the city still remains popular among its denizens.

Dan Houston is president of retirement systems and investor services at Principal Financial Group Inc., the 130-year-old home-grown financial services company. Houston remembers coming to Principal in Des Moines from Texas in 1990 and immediately requesting a crack at a job in the company’s Dallas offices when an opening came up.

“Six years later, it was open and I didn’t take it,” Houston said, saying he was content to remain in Des Moines.

The city has grown over the last 20 years, built up its downtown region and lured a number of businesses to the area. All the while, it remains a smaller city with manageable commutes and better air quality.

If there is an image problem for Des Moines, it’s lack of awareness, says Martha Willits, president and chief executive of Greater Des Moines Partnership, a group that promotes economic growth in the region.