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Austin's Strong Metro Economy Will Stay Ahead of the Pack for Years, Report Finds

June 20, 2014

The Austin economy led the entire nation in percentage growth of gross metro product in 2013 and is expected to stay on top through 2020, according to an economic analysis released Friday by the U.S. Conference of Mayors.

The report relayed optimism about the improving U.S. economy and stressed that metro areas would be the quickest recover and improve as economy emerged from the effects of the recession. Austin led the nation's cities in 2013 with a gross metro product growth – the sum of all goods and services produced annually in a city – of 4.6 percent.

The city is expected to hold onto the No. 1 ranking though 2020, with an average annual gross metro product growth of 4.4 percent from between 2013 and 2020.

The report was released on the opening day of the annual U.S. Conference of Mayors national meeting in Dallas, which continues until Monday.

The report stressed that metro areas across the country would be the first to rebound, stating "Metro economies will lead the way, first enabling the nation to at last recover the jobs lost during the recession, and then propelling the U.S. economy to achieve its growth potential of greater than 3 percent real gains per year, a rate not reached since 2004."

Jon Hockenyos, president of TXP Inc. and local economist, said that while the report was likely prepared for a national audience, it generally matched his conclusions about Austin's economy.

"I think it's not a surprise," he said. "Really, absent something unusual... I think Austin is the strongest regional economy in the country. It's pretty consistent with what we've been thinking and saying for some time."

Other top-performing cities for average gross metro product growth for 2013 through 2020 were Raleigh, North Carolina, at 4.3 percent, Houston at 4.0 percent and Phoenix at 4.0 percent.

The Austin area's hot economy has seen its unadjusted employment rate recently plummet to less than 4 percent, highlighting a powerful demand for labor in the area.

Hockenyos also offered a warning that area leaders should not rely on past successes and back off economic development efforts – a warning echoed by many in the business community as well as Austin Mayor Lee Leffingwell.

"Economic development is something you have to constantly be doing," Hockenyos said, "You may not have to have the accelerator pressed down as much, but you need to stay in the game."


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