- Austin’s economy grew by 1.2% in 2020. Only one other major metro, San Jose, also saw positive growth.
- GDP for the metropolitan portion of the U.S. in aggregate fell by 3.5% in 2020.
- The financial activities sector was the most significant driver of Austin’s GDP growth.
- Austin’s real per capita GDP fell 1.7% in 2020, but that rate made it the 5th best performing among the top 50 metros.
Austin’s economy grew 1.2% in 2020 according to new data on gross domestic product (GDP) by metro area and county released late last month by the U.S. Bureau of Economic Analysis (BEA). Growth for 2019, which was previously stated as 3.1% has been revised to 4.9%. The compound annual growth rate for 2015-2020 is 4.4%. These growth rates are real, inflation-adjusted, rates. GDP is the value of goods and services produced within a region less the value of goods and services used up in production.
Economic growth across U.S. metropolitan areas was widespread in 2019, with 90% of 384 metros seeing real gains. With the impact of COVID-19, the economies of the metropolitan portion of the U.S. fell by 3.5% in 2020 and only 8% of the 384 metros saw positive growth. Among the top 50 largest metros, only San Jose and Austin saw positive growth.
Austin’s 1.2% gain in real GDP makes it the second best performing among the 50 largest metro economies in 2020. The other major Texas metros performed better than U.S. metros overall. San Antonio fell by 1.7%, ranking ninth; Dallas-Ft. Worth fell 2.2%, ranking 12th; and Houston’s 3.0% contraction ranked 22nd.
Over the last 5 years, real GDP is up 6.4% in the metropolitan portion of the U.S. In Austin, real GDP has grown 24.1% since 2015, making it the fourth fastest growing major economy—behind only San Jose, Seattle, and San Francisco. Dallas-Ft. Worth (up 13.0%) also ranks in the top 10. San Antonio (up 8.4%) and Houston (down 0.1%) rank as the 19thand 39th best performing large metros for 2015-2020.
Austin’s current dollar GDP totals $168 billion in 2020, making it the 24th largest U.S. metropolitan economy. On the basis of population in 2020, the Austin metro ranks 29th. At the time of last year’s release of this data, Austin’s GDP ranked 26th.
While 8% of all metropolitan economies grew in real terms in 2020, only 4% of the 50 largest metros grew. In aggregate, their growth was 3.5%, the same as the real gain for the entire metropolitan portion of the U.S. The 50 largest metros account for 71% of U.S. metropolitan area GDP.
Per Capita GDP
Austin’s real GDP on a per capita basis performed well relative to other large metros over 2015-2020 and for 2019-2020. Austin ranks fifth, with a contraction of only 1.7% in real per capita GDP in 2020, while the decline for all metros was 3.9%. San Antonio’s decline was 3.2% (ranking 17th), Dallas-Ft. Worth’s was 3.7% (23rd), and Houston’s loss was 4.2% (32nd). Only San Jose had positive growth (5.1%) in real per capita GDP in 2020.
Since 2015, real per capita GDP is up 8.2% in Austin, making it the fifth best performing large metro. Across all metros, 2015-2020 growth was 3.1%. Dallas-Ft. Worth’s increase is 3.5%, ranking 21st. In San Antonio and Houston, real per capita GDP is below what it was five years ago—San Antonio is down 0.4% (ranking 36th) and Houston is down 6.9% (49th). Gains in real GDP on a per capita basis reflect improvement in an area’s standard of living.
Before the previous recession, the peak for real per capita GDP across all metros was 2007. In 2019, the real per capita GDP had reached a level 9.6% above that. With the impact of COVID-19, nearly half of the gains over 2007 have been lost. For the metropolitan portion of the U.S., 2020 real per capita GDP surpasses 2007 by only 5.4%. Of the 50 largest metros, nine, including Houston, still had real per capita GDP in 2019 that was lower than what it was in 2007. In 2020, that count grows to 16. Two large metros—Las Vegas and New Orleans—have real per capita GDP in 2020 that is more than 20% below the level of 2007. In San Jose, real per capita income exceeds 2007 by 100.9% and the next greatest gain is 40.7% in San Francisco. Austin’s real per capita income is up by 17.6% (ranking fifth).
GDP by Industry
In Austin, where real GDP growth in 2020 was 1.2%, seven private industries, plus government, contributed positively to growth. Financial activities contributed the most to growth (1.60 percentage points). Information (0.49), professional and business services (0.37), and trade (0.33) were also notable. Four industries contributed negatively to growth: leisure and hospitality (1.09), transportation and utilities (0.54), education and health services (0.38) and other services (0.26).
Financial activities, Austin’s largest industry sector, accounted for 19% of 2020 GDP. The industry saw 9.0% real growth in 2020. Natural resources and mining had the greatest growth, 34.3%, but the industry accounts for only 1% of the region’s GDP. Information accounts for 7% of Austin’s GDP and growth was a robust 7.8%. Austin’s second largest industry, professional and business services, accounts for 17% of total GDP, and GDP attributable to the industry grew by 2.2% in 2020.
Austin’s leisure and hospitality industry represents a moderate 3% of GDP, but the industry contracted by 25.7% in 2020. Transportation and utilities (2% of GDP) fell by 23.0% and education and health services (6% of GDP) fell by 6.3%.
Only three major private industry sectors contributed positively to U.S. metropolitan area real GDP in 2020. Those were information (0.21 percentage points) financial activities (0.07) and natural resources (0.01). The remaining other private industries, plus government, contributed negatively. Leisure and hospitality (-2.34), education and health services (-0.58), transportation and utilities (-0.37%), and professional and business services (-0.32) made the greatest contributions to the 3.5% contraction in U.S. metros’ real GDP.
GDP by County
Among the Austin MSA’s five counties, Bastrop County saw the fastest growth (2.9%) in real GDP in 2020. Among large counties, those with 500,000 or more population, both Travis and Williamson rank in the top 10 fastest growing in 2020. Williamson County's 2.7% growth ranks third and Travis County’s 1.0% growth ranks eighth. The fastest growing county nationally is Santa Clara County, CA (4.4%), followed by Denton County, TX (3.9%). Colin County, TX (1.6%) also ranks in the top 10.
Among the dozen large counties in Texas, Travis County’s $100,022 per capita GDP is the second highest in 2020, behind Dallas County’s $102,022. Travis County ranks 17th for per capita GDP among the 141 U.S. counties with 500,000 or more population. New York County, NY, followed by San Francisco County, CA have the highest per capita GDP among large counties ($468,173 and $232,571 respectively).
The financial activities sector was the leading contributor to Williamson County’s 2.7% GDP growth in 2020, accounting for 2.79 percentage points. Professional and business services (0.47) and manufacturing (0.35) were the next most significant contributors. Leisure and hospitality (-0.83), education and healthcare (-0.51), and other services (-0.32) provided the most significant negative contributions.
Travis County’s 1.0% real growth in 2020 was driven by financial activities (1.22 percentage points), information (0.66), and professional and business services (0.38). Leisure and hospitality (-1.16), transportation and utilities (-0.75), and education and healthcare (-0.34) provided the most significant negative contributions.
Refer to our January 2020 article about GDP data for an attempt to identify at what may be behind Caldwell County’s real GDP trend line above.
- The BEA suppresses industry detail where publication has the potential to reveal information about individual or small numbers of businesses. Since the BEA introduced county-level GDP estimates last year, incidences of suppression for confidentiality have multiplied in metro level estimates. Data suppression of a few industries for the Austin MSA is due to suppression of these industries in the estimates for Bastrop County and/or Caldwell County. We made 2019 and/or 2020 estimates of missing county values for utilities, information, and parts of professional and business services and combined these to the published industry estimates for Hays, Travis and Williamson County to create Austin MSA estimates where 2019 or 2020 data was suppressed. ↩
Related Categories: Central Texas Economy in Perspective