• Austin’s economy grew by 10.5% in 2021, making it the fourth best performing major metro.
• GDP growth for the metropolitan portion of the U.S. in aggregate was 6.2% in 2021 and all of the 50 largest metros saw positive growth.
• The professional and business services sector was the most significant driver of Austin’s GDP growth.
• Austin’s real per capita GDP increased 8.0% in 2021, the 11^th best gain among the top 50 metros.

Austin’s economy grew 10.5% in 2021 according to new data on gross domestic product (GDP) by metro area and county released by the U.S. Bureau of Economic Analysis (BEA). Growth for 2020, which was previously stated as 1.2% has been revised to 2.2%. The compound annual growth rate for 2016-2021 is 5.6%. 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 contraction across U.S. metropolitan areas was widespread in 2020, with 78% of the 384 metros seeing negative growth. With the impact of COVID-19, the economies of the metropolitan portion of the U.S. fell by 2.8% in 2020. Among the top 50 largest metros, only seven saw positive growth in 2020, with Austin ranking second behind San Jose.

This year is a very different story. Only 19, or 5%, of the metros saw negative growth. The metropolitan portion of the U.S. grew by 6.2%. Among the top 50 metros, growth was uniformly positive.

Austin’s 10.5% gain in real GDP makes it the fourth best performing among the 50 largest metro economies in 2021. Dallas-Ft. Worth grew by 6.9%, ranking 19^th, San Antonio gained 5.9%, ranking 31^st, and Houston’s increase was 1.9%, ranking 48^th.

Over the last 5 years, real GDP is up 11.4% in the metropolitan portion of the U.S. In Austin, real GDP has grown 31.2% since 2016, making it the third fastest growing major economy—behind only San Jose and Seattle. Dallas-Ft. Worth (up 18.0%), San Antonio (up 12.7%) and Houston (up 3.0%) rank as the 12^th, 23^rd, and 46^th best performing large metros for 2016-2021.

Austin’s current dollar GDP totals $194 billion in 2021, making it the 22^nd largest U.S. metropolitan economy. On the basis of population in 2021, the Austin metro ranks 28^th. At the time of last year’s release of this data, Austin’s GDP ranked 24^th.

While 95% of all metropolitan economies grew in real terms in 2021, 100% of the 50 largest metros grew. In aggregate, their growth was 6.8%, which is slightly larger than the 6.2% real 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 2016-2021 and 2020-2021. Austin ranks 11^th, with 8.0% growth in real per capita GDP in 2021, while the gain across all metros was 6.1%. Dallas-Ft. Worth’s increase was 5.6% (ranking 29^th), San Antonio’s was 4.5% (44^th), and Houston’s was 0.9% (49^th). Five metros had double digit growth, led by San Jose with a 15.8% increase in real per capita GDP in 2021.

Since 2016, real per capita GDP is up 12.2% in Austin, making it the fifth best performing large metro. Across all metros, 2016-2021 growth was 8.5%. Dallas-Ft. Worth’s increase is 9.2%, ranking 21^st and San Antonio is up 4.5%, ranking 36^th. In Houston, real per capita GDP is below what it was five years ago by 2.9% ranking Houston 49^th. Gains in real GDP on a per capita basis reflect improvement in an area’s standard of living.

Before the Great Recession, the peak for real per capita GDP across all metros was 2007. In 2019, real per capita GDP had reached a level 8.7% above that. With the impact in 2020 of COVID-19, nearly half of the gains since 2007 were lost. For the metropolitan portion of the U.S., 2020 real per capita GDP surpassed 2007 by only 5.2%. Of the 50 largest metros, 10, including Houston, still had real per capita GDP in 2019 that was lower than what it was in 2007. In 2020, with the impact of COVID-19, that count grew to 16. With 2021’s gains, only seven large metros, including Houston, remain with real per capita GDP below 2007. New Orleans has real per capita GDP in 2021 that is more than 20% below the level of 2007. In San Jose, real per capita GDP now exceeds 2007 by 128% and the next greatest gain is 57% in San Francisco. Austin’s real per capita GDP is up by 28% (ranking fourth).

GDP by Industry

In Austin, where real GDP growth in 2021 was 10.5%, government and each of the major private industries, but one, contributed positively to growth. Professional and business services contributed the most to growth (4.82 percentage points). Financial activities (1.65) and information (1.53) were also notable. Natural resources and mining contributed negatively to growth (-0.64).

Professional and business services, Austin’s largest industry sector, accounted for 19.3% of 2021 GDP. The industry saw 28.6% real growth in 2021. Leisure and hospitality had the greatest growth, 29.4%, but the industry accounts for only 3.8% of the region’s GDP. Information accounts for 7.3% of Austin’s GDP and growth was a robust 24.1%. Austin’s second largest industry, financial activities, accounts for 18.3% of total GDP, and GDP attributable to the industry grew by 8.8% in 2021.[1]

The only major sector with negative growth in 2021 was natural resources and mining, which contracted by 55.4%. The industry accounts for only 0.5% of Austin’s 2021 GDP.

As in Austin, the only major sector contributing negatively to the change in GDP nationally is natural resources and mining (0.26 percentage points). Each of the other major private industries, plus government, contributed positively. Professional and business services (1.57) and financial activities (1.09) made the greatest contributions to the 6.2% increase in U.S. metros’ real GDP.

GDP by County

Among the Austin MSA’s five counties, Travis County saw the fastest growth (11.6%) in real GDP in 2021. Among large counties, those with 500,000 or more population, Travis County ranks as the sixth fastest growing in 2021. Williamson County's 7.4% growth ranks 31^st. The fastest growing county nationally is San Francisco County, CA (14.0%), followed by Davidson County, TN (13.8%). Colin County, TX (8.7%) is the best performing large Texas county after Travis County.

Among the dozen large counties in Texas, Travis County’s $115,213 per capita GDP is the second highest in 2021, behind Dallas County’s $116,159. Travis County ranks 17^th for per capita GDP among the 144 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 ($526,195 and $289,972 respectively). Hidalgo County, TX has the lowest per capita GDP ($28,975) among large U.S. counties.

Travis County’s 11.6% real growth in 2021 was driven by professional and business services (5.67 percentage points), information (1.97), and financial activities (1.66). Natural resources and mining (-0.8) provided the only negative contribution among major sectors.

The business and professional services was also the leading contributor to Williamson County’s 7.4% GDP growth in 2021, accounting for 2.15 percentage points. Financial activities (1.46) and trade (0.94) were the next most significant contributors. Transportation and utilities (-0.11) and natural resources and mining (-0.06) provided the only 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.

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FOOTNOTES:

1. 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 a couple of years ago, 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 estimates of missing 2020 county values for utilities, information, and professional and business services and combined these with the published industry estimates for Hays, Travis and Williamson County to create Austin MSA estimates where 2020 data was suppressed. ↩