- Austin’s economy grew an outstanding 5.0% in 2015, making it the fourth fastest growing major metro economy in 2015.
- Professional and business services was the most significant driver of Austin’s GDP growth in 2015, but trade, information and durable goods manufacturing were also important.
- Over the last 5 years, real per capita GDP is up 10.6%, placing Austin as the ninth best performing major metro.
Austin’s economy grew an outstanding 5.0% in 2015 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 2014, which was previously stated as 6.1% has been revised to 5.6%. These rates are real, inflation-adjusted, growth rates.
Economic growth in 2015 across U.S. metropolitan areas was widespread. In 2015, 76% of 382 metros saw real gains, compared to 77% in 2014. However, aggregate growth for all U.S. metros rose to 2.5% in 2015 after increasing 2.3% in 2014.
Austin’s 5.0% gain in real GDP is the fourth highest rate of growth among the 50 largest metro economies. Austin follows San Jose which grew by 8.9%, Raleigh (7.0%), and San Antonio (5.9%). Houston also makes the top ten with 4.6% growth in 2015. Dallas-Fort Worth’s 3.6% growth ranks 16th.
For the metropolitan portion of the U.S. as a whole, and for Austin, 2009 is the recession low point for real GDP and positive growth resumes in 2010. For all metros, real GDP in 2015 is 9.9% above 2010. In Austin real GDP has grown 36.0% over the same period, making it the second fastest growing major economy—behind only San Jose. San Antonio (up 25.2%) and Houston (up 24.4%), Dallas-Fort Worth (up 21.8%) and rank as the third, fourth and sixth fastest growing large metros for 2010-2015.
Austin’s current dollar GDP totals $119.9 billion in 2015, making it the 32nd largest U.S. metropolitan economy. A decade ago, Austin was the 40th largest U.S. metro economy.
While 76% of all metropolitan economies grew in real terms in 2015, 100% of the 50 largest metros grew. In aggregate, their growth was 2.9%, slightly greater than the 2.5% 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 2014-2015 and 2010-2015. Austin ranks 14th with 2.0% real growth in per capita GDP in 2015, while the growth for all metros was 1.6%. Since 2010, real per capita GDP is up 10.6% in Austin, making it the ninth best performing large metro. Across all metros, 2010-2015 growth was 5.0%. Gains in real GDP on a per capita basis reflect 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., 2015 per capita GDP just surpasses 2007 by 0.6%. Of the 50 largest metros, 20 still have real per capita GDP that is lower than what it was in 2007. San Jose (up 29.6%) and Pittsburgh (up 14.8%) lead all major metros for real per capita gains since 2007. Austin’s per capita GDP is $55,323 in constant (2009 chained) dollars, which is 9.3% ahead of 2007. This is the fifth best gain among the large metros. Six large metros have real per capita GDP in 2015 that is more than 10% below the level of 2007: Las Vegas, Orlando, Phoenix, Jacksonville, New Orleans, and Hartford.
GDP by Industry
All private industry sectors, except transportation and utilities, contributed positively to U.S. metropolitan area real GDP growth in 2015. 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, professional and business services contributed the most to growth (1.57 percentage points), followed by wholesale and retail trade (0.84), information (0.73), and durable goods manufacturing (0.61).
Financial activities contributed negatively to growth in 2015 (-0.52). Financial activities account for 16.3% of Austin’s GDP and real growth for 2015 was -3.0%. Austin’s relatively small transportation and utilities sector (1.9% of GDP) also contributed negatively.
After financial activities, wholesale and retail trade is Austin’s next largest major sector, accounting for 15.3% of 2015 GDP and growth was 5.6%. The third largest sector, professional and business services, makes up 15.2% of Austin’s 2015 GDP but growth of 10.9% made it the leading contributor to real GDP growth. Austin’s information sector, accounting for only 5.9% of GDP, was also a prime growth driver due to 13.2% growth 2015. Durable goods manufacturing accounts for 10.4% of Austin’s GDP and 5.9% growth in 2015 made it another notable contributor to growth. In contrast, real growth in durable goods manufacturing was only 1.0% across all metros.
Government contributed negatively (-0.03 percentage points) to U.S. metro areas real GDP growth in 2015. In Austin, government (accounting for 12.2% GDP and growing 0.8%) made a positive contribution (0.10) to growth.
Houston, the fourth largest metro economy, grew 4.6% in 2015. Houston’s growth in 2015 was driven by natural resources and mining (2.47 percentage points) and nondurable goods manufacturing (1.36), while durable goods manufacturing contributed negatively (-0.49).
Dallas-Fort Worth, the sixth largest metro economy, ranked 16th for growth in 2015. The metro’s 3.6% gain was driven by professional and business services (0.94) and wholesale and retail trade (0.87).
San Antonio (ranking 35th largest) had real growth of 5.9% (3rd fastest) and the largest contributors to growth in 2015 were natural resources and mining (2.51), trade (0.62), professional and business services (0.59), and construction (0.54).
Related Categories: Central Texas Economy in Perspective