Insights
- Austin has the best performing economy among the top 50 metros, growing 7.4% in 2022.
- GDP growth for the metropolitan portion of the U.S. in aggregate was 2.1% in 2022 with 45 of the 50 largest metros showing positive growth.
- The professional and business services sector was the most significant driver of Austin’s GDP growth.
- Austin’s real per capita GDP is the second fastest growth among major metros, increasing 4.6% in 2022.
Austin’s economy grew 7.4% in 2022 according to new data on gross domestic product (GDP) by metro area and county released on December 7 by the U.S. Bureau of Economic Analysis (BEA). The compound annual growth rate for 2017-2022 is 6.5%. 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.
Austin’s current dollar GDP totals $222 billion in 2022, making it the 22nd largest U.S. metropolitan economy. On the basis of population in 2022, the Austin metro ranks 26th.
Economic contraction across U.S. metropolitan areas was widespread in 2020, with 75% of the 384 metros seeing negative growth. With the impact of COVID-19, GDP for the metropolitan portion of the U.S. fell by 2.2% in 2020. Among the top 50 largest metros, only 10 saw positive growth in 2020, with Austin ranking second behind San Jose.
Metro economies bounced back strongly in 2021. The metropolitan portion of the U.S. grew by 6.0% and Austin by 10.5%. Only 13, or 3.4%, of all metros saw negative growth. Among the top 50 metros, growth was uniformly positive.
Austin’s 7.4% gain in real GDP makes it the best performing among the 50 largest metro economies in 2022. Dallas-Ft. Worth grew by 5.7%, ranking fifth, San Antonio gained 4.7%, ranking 10th, and Houston’s increase was 2.5%, ranking 22nd. Ranking all 384 metropolitan areas for real GDP growth in 2022 shows Austin to be the third fastest growing metro, with only Kokomo, IN and The Villages, FL experiencing faster growth.
With growth falling back in 2022 from what it was in 2021, only 74% of all metropolitan economies grew in real terms in 2022. Among the top 50, five metro areas saw negative growth. In aggregate, their growth was 2.4%, which is slightly larger than the 2.1% real gain for the entire metropolitan portion of the U.S. The 50 largest metros account for 72% of U.S. metropolitan area GDP.
Over the last 5 years, real GDP is up 11.9% in the metropolitan portion of the U.S. In Austin, real GDP has grown 37.2% since 2017, making it the fastest growing major economy over the last five years as well as the last year. Dallas-Ft. Worth (up 22.5%), San Antonio (up 18.0%) and Houston (up 9.1%) rank as the 12th, 14th, and 33rd best performing large metros for 2017-2022.
Per capita GDP
Austin’s real GDP on a per capita basis performed well relative to other large metros over 2017-2022 and 2021-2022. Austin ranks second, with 4.6% growth in real per capita GDP in 2022, while the gain across all metros was 1.7%. Dallas-Ft. Worth’s increase was 3.5% (ranking eighth), San Antonio’s was 2.7% (16th), and Houston’s was 0.7% (42nd).
Since 2017, real per capita GDP is up 20.1% in Austin, making it the fourth best performing large metro. Across all metros, 2017-2022 growth was 9.3%. Dallas-Ft. Worth’s increase is 12.8% (ranking 14th), San Antonio is up 9.1% (24th), and Houston is up 2.3% (46th). Gains in real GDP on a per capita basis reflect improvement in an area’s standard of living.
The impact of COVID-19 pandemic brought real GDP per capita down by 2.7% in 2020 in the metropolitan portion of the U.S. Among the top 50 metro economies, only two (San Francisco and Tampa) saw positive growth. Las Vegas’s decline of 10.0% was the largest. As of 2022, four large metros have yet to regain the level of per capita GDP they had in 2019.
GDP by industry
In Austin, where real GDP growth in 2022 was 7.4%, government and eight of eleven major private industries contributed positively to growth. Professional and business services contributed the most to growth (3.30 percentage points). Financial activities (1.60) and information (0.98) were also notable. Construction, natural resources and mining, and trade contributed negatively to growth (-0.36 combined).
Professional and business services, Austin’s largest industry sector, accounted for 20.2% of 2022 GDP. The industry saw 17.5% real growth in 2022. Transportation and utilities also grew by 17.5%, but the industry accounts for only 2.5% of the region’s GDP. Austin’s second largest sector, financial activities, which accounts for 19.1% of GDP by industry, grew by 8.4%. Information accounts for 7.7% of Austin’s GDP and growth was a robust 12.8%.
The most significant major sector with negative growth in 2022 was construction, which contracted by 3.6%. The industry accounts for 4.9% of Austin’s 2022 GDP.
As in Austin, professional and business services was the sector contributing most significantly (1.00 percentage points) to the 2.1% real change in GDP nationally. Trade provided the most significant negative contribution (-0.57) to growth in 2022.
GDP by county
Travis County’s $171 billion economy ranks as the 18th largest county economy in the nation. Harris County, TX ($495 billion) and Dallas County, TX ($345 billion) are in the nation’s top 10, ranking third and eighth, respectively.
Among the Austin MSA’s five counties, Travis County saw the fastest growth (7.7%) in real GDP in 2022. Among large counties, those with 500,000 or more population, Travis County ranks as the third fastest growing in 2022. Williamson County’s 6.8% growth ranks sixth. The fastest growing county nationally is Douglas, NE (9.2%), followed by Collin County, TX (8.7%).
Among the dozen large counties in Texas, Travis County’s $128,846 per capita GDP is the second highest in 2022, behind Dallas County’s $132,717. Travis County ranks 17th for per capita GDP among the 145 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 ($554,825 and $311,943 respectively). Hidalgo County, TX has the lowest per capita GDP ($31,164) among large U.S. counties.
Travis County’s 7.7% real growth in 2022 was driven by professional and business services (3.72 percentage points), information (1.03), and financial activities (1.42). Construction (-0.21) provided the most significant negative contribution among major sectors.
The business and professional services industry was also the leading contributor to Williamson County’s 6.8% GDP growth in 2022, accounting for 2.22 percentage points. Financial activities (2.21) and information (1.11) were the next most significant contributors. Trade (-0.36) provided the most significant negative contribution.
Conclusion
Austin’s economy performed extraordinarily well in 2022 according to last Friday’s annual release of GDP by metro by the U.S. Bureau of Economic Analysis. Not only did it rank first for real, inflation-adjusted growth among the 50 largest metro economies, it’s 7.4% growth ranks third among all 384 U.S. metropolitan areas. Longer range growth is also robust, with Austin ranking first for real growth over the last five years. Real GDP measured on a per capita basis is strong as well. Among large metros, Austin’s 4.6% gain in real GDP per capita in 2022 ranks second and Austin ranks fourth for real growth over the last five years.
Austin’s current dollar GDP totals $222 billion in 2022, making it the 22nd largest U.S. metropolitan economy. In 2022, Austin’s per capita GDP is $91,716, ranking 13th among large metros.
