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St. Louis’ economy shrank faster than almost any other region in the country in the second quarter, according to a new report out today from the Brookings Institution.

Only beleaguered Detroit saw its economic output fall faster than St. Louis’ in the three months ending in June, a time when Chrysler’s Fenton truck plant limped into shutdown and U.S. Steel’s massive Granite City Works sat quiet.

Those sort of cuts contrasted with a relatively stable housing sector and a job market that’s less gruesome than some, keeping St. Louis mired in the middle of the pack among 100 large metropolitan areas that Brookings has been tracking through the recession. It’s better off than housing crisis hot spots like Las Vegas or factory towns like Dayton, Ohio, but worse off than energy hubs in Houston and Dallas, the same as it was three months ago.

With its broad base of industries, St. Louis’ $120 billion regional economy tends to track the nation as a whole. But this spring’s factory cuts took an outsized toll here because they eliminated jobs with better-than-average wages, said Jason Kunkel, an economist who tracks St. Louis for Moody’s Economy.com. That translated into a 1.5 percent decline in output, though that figure may be revised upward a bit. Since the recession began, output is off 6.1 percent.

"The manufacturing sector there has been hit very hard," he said. "That certainly has a big effect on why (output) in the first half of 2009 will be worse than average."

The good news, said Howard Wial, who co-authored the Brookings report, is that things appear to be getting a little better. The pace of job cuts is slowing. Auto sales have leveled off, a good sign for the car-making that remains here. The big plant in Granite City is pumping out steel again.

"You can see the light at the end of the tunnel," he said. "But you’re not there yet."

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