Austin was the third fastest growing major metro economy in 2014
Durable goods manufacturing and professional and business services drove Austin’s GDP growth
Over the last 5 years, real per capita GDP is up 13.3%, making Austin the No. 4 best performing major metro
Austin’s economy grew an outstanding 6.1% in 2014 according to new data on gross domestic product (GDP) by metro released late last month by the U.S. Bureau of Economic Analysis (BEA). Growth for 2013, which was previously stated as 2.2% has been revised to 4.7%. These rates are real, inflation-adjusted, growth rates.
Economic growth in 2014 across U.S. metropolitan areas was widespread, although not quite as widespread as in 2013. In 2014, 74% of 381 metros saw real gains, compared to 76% in 2013. However, aggregate growth for all U.S. metros rose to 2.3% in 2014 after increasing 1.9% in 2013.
Austin’s 6.1% gain in real GDP is the third highest rate of growth among the 50 largest metro economies. Dallas-Fort Worth grew an extraordinary 8.5%, followed by San Jose which grew by 6.7%. San Antonio ranks seventh with 3.8% growth, while Houston’s growth slowing to 1.8% places it 33rd. In 2013, Houston ranked as the fastest growing major metro.
For the metropolitan portion of the U.S. as a whole, and for Austin, 2009 is the recession low point for real GDP. For all metros, real GDP in 2014 is 10.3% above 2009. In Austin real GDP has grown 30.9% over the same period, making it the second fastest growing major economy—behind only San Jose. Dallas-Fort Worth (up 29.3%), San Antonio (up 24.0%), and Houston (up 21.8%) round out the top five fastest growing large metros for 2009-2014.
Austin’s current dollar GDP totals $115.3 billion in 2014, making it the 32nd largest U.S. metropolitan economy. A decade ago, Austin was the 40th largest U.S. metro economy.
While 74% of all metropolitan economies grew in real terms in 2014, 98% of the 50 largest metros grew (all but Virginia Beach). In aggregate, their growth was 2.6%, slightly greater than the 2.3% gain for the entire metropolitan portion of the U.S. The 50 largest metros account for 72% 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 both 2013-2014 and 2009-2014. Austin ranks sixth with 2.8% real growth in per capita GDP in 2014, while the growth for all metros was 1.3%. Since 2009, real per capita GDP is up 13.3% in Austin, making it the fourth best performing large metro. Across all metros, 2009-2013 growth was 5.4%. Gains in real GDP on a per capita basis reflects improvement in an area’s standard of living.
The pre-recession peak for real per capita GDP across all metros was 2007. For the metropolitan portion of the U.S., per capita GDP remains 0.2% below what it was in 2007. Only 25 large metros have positive real per capita GDP growth over the period. San Jose (up 18.6%) and Portland (up 15.2%) lead all major metros for real per capita gains since 2007. Austin’s per capita GDP is $54,909 in constant (2009 chained) dollars, which is 8.8% ahead of 2007. This is the fifth best gain among the large metros.
Dallas-Fort Worth, up 11.7%, ranks third. San Antonio and Houston, up 6.4% and 3.2% respectively, rank seventh and twelfth.
Six large metros have real per capita GDP that is more than 10% below the level of 2007: Las Vegas (-21.0%), Orlando, Phoenix, Jacksonville, New Orleans, and Miami.
GDP by Industry
All private industry sectors except construction contributed positively to U.S. metropolitan area real GDP growth in 2014. Professional and business services, wholesale and retail trade, and financial activities made the greatest contributions to growth of U.S. metros in aggregate.
In Austin, durable goods manufacturing contributed the most to growth (1.21 percentage points), followed by professional and business services (1.09), natural resources and mining (0.94), and financial activities (0.91). Retail and wholesale trade contributed negatively to growth in 2014 (-0.15).
Financial activities account for 17.5% of Austin’s GDP and real growth for 2014 was 5.2%. Professional and business services is the next largest major sector, accounting for 14.2% of Austin’s 2014 GDP and growth was 7.8%. Durable goods manufacturing is only 9.9% of Austin’s GDP, but 13.0% growth in 2014 made it the top growth driver. In contrast, real growth in durable goods manufacturing was only 2.6% across all metros.
Government contributed negatively (-0.01 percentage points) to U.S. metro areas real GDP growth in 2014. In Austin, government made a slight (0.09) positive contribution.
Houston, the fourth largest metro economy, grew 1.8% in 2014. Houston’s growth in 2014 was driven by professional and business services (1.10 percentage points) and wholesale and retail trade (0.84), while nondurable goods manufacturing contributed negatively (-1.26). Natural resources and mining represents the largest share, 19.3%, of Houston’s GDP and real growth in that sector was a slender 0.6% in 2014.
Dallas-Fort Worth, the fifth largest metro economy, ranked first for growth in 2014. Data suppression makes it difficult to fully specify the drivers of the metro’s 8.5% gain, however, nondurable goods manufacturing, which contributes 3.94 percentage points, is the most significant.
San Antonio (ranking 35th largest) had real growth of 3.8% and the largest contributors to growth in 2014 were natural resources and mining (0.93) and trade (0.66), while nondurable goods manufacturing contributed negatively (-0.32).
Related Categories: Central Texas Economy in Perspective