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The D.C. region came in fifth in a ranking issued by the Milken Institute of how well various U.S. metropolitan areas are performing. Washington trailed only San Jose, Calif.; Austin, Texas; Raleigh, N.C.; and Houston in terms of job growth, quality of wages and salaries and the rate of industrial expansion, with a particular emphasis on the technology sector.

However, the Milken Institute’s methodology suggests that the region’s strong ranking—it jumped 12 spots from No. 17 in last year’s edition of this report—is weighted heavily toward the government contractors that populate Northern Virginia office parks. The local economy, it pointed out, benefits from “diverse high-tech industry tied to federal spending” with emphasis on health care, defense and information technology.

Defense spending, though, is set to decrease over the next decade, which will deal blows to major employers like Northrop Grumman and General Dynamics. Fairfax County alone, the Milken report projects, stands to lose 87,000 jobs thanks to defense cuts. But the report continues on that the region is gaining strength in other industries.

“So while defense contracting appears to be slowing, the metro’s booming tech sector, growth in healthcare services, and housing recovery will keep it afloat. Supported by a concentration of high-skilled workers, among them engineers and scientists, the area ranked 14th in wage growth, outpacing the nation by more than 2 percentage points.”

It should be noted, though, that the Milken Institute’s survey is based strictly on outcome and does not take into account elements like costs of living, commute times and other quality-of-life factors. Instead, it orders its rankings according to a formula that weighs job growth, wage and salary growth and the relative growth of high-tech industries.

“The Milken Institute ranking affirms what we have known for some time now: that the District is at the heart of a growing tech hub,” D.C. Mayor Vince Gray said in a news release. “We have invested heavily in the local tech sector, exemplified by our successful efforts to keep LivingSocial headquartered in the District.”

It is unclear if Milken completed its reporting before or after LivingSocial laid off 160 percent of its D.C. employees, or even if daily deals are as much a driver of the local economy as, say, Northrop Grumman’s line of X-47B aerial drones. In a press release, Milken’s researchers said federal spending on high-tech labor and output “anchored” the D.C. region’s growth.