Monday, December 07, 2009

Comparing Texas' Big 4 Metro Economies

David recently sent me this economic brief on Texas from Comerica Bank, choc full of interesting statistics comparing the big 4 metros of Texas:
  • "Four of those top 40 MSAs are in Texas: Houston, Dallas-Fort Worth (DFW), San Antonio and Austin. Respectively, the current dollar value of their GDPs ranked 4th, 6th, 36th and 37th in 2008. Together, they accounted for 77 percent of Texas GDP last year and seven percent of national GDP. The two giants, of course, are Houston and DFW, which each accounted for more than 30 percent of the state’s GDP. San Antonio and Austin each accounted for roughly 6 ½ percent of Texas GDP."
I've always kind of thought of Austin+San Antonio as sort of nearly equal to DFW or Houston, but that's clearly far from the case. Less than half.
  • All of them have roughly the same long-term GDP growth (since 2001) as Texas as a whole (~3%, 50% higher than the U.S. as a whole at ~2%), except for Austin, which is 50% faster again (~4.5%). Austin got a bit of an artificial boost from the bounce-back effect after a hard crash in 2000.
  • San Antonio is the most stable, followed by average DFW, with Austin and Houston having the most growth volatility (from tech and energy+hurricanes, respectively).
  • "Perhaps the best single measure of economic success is per capita real GDP. DFW followed closely by Houston (~$50K) were particularly strong in 2008, ranking respectively 18th and 21st nationally. Austin (~$44K) also was relatively highly ranked coming in at 43rd among the 366 MSAs. San Antonio (~$32K) placed in the middle of the pack with a ranking of 180th."
  • We all lag in per capita GDP growth, as population increases outstrip productivity increases. Houston lagged the worst, although I think this might be at least partly related to the large number of Katrina refugees (in addition to the usual international immigration). Texas also attracted a lot of lower-middle and middle income households this decade from across the country as housing got unaffordable elsewhere, averaging down GDP per capita. I wish they had stats to show GDP per capita growth for just the people that were here the entire period. I would imagine it would be much stronger: we have a pretty strong opportunity ladder that people move up the longer they're here, but new population is always streaming in at the bottom of the ladder.
Thanks for the tip, Dave.

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At 5:10 PM, December 07, 2009, Blogger Alon Levy said...

It's strange to read that Houston's GDP per capita lagged the most. The Bureau of Economic Analysis says that on the contrary, in the period leading up to 2007 it grew the fastest among the major Sunbelt regions (presumably because of oil). Maybe it crashed afterward because of the lower oil prices? I don't know...

At 5:52 PM, December 07, 2009, Blogger Tory Gattis said...

To clarify: our absolute number is high, but the growth rate has been low.

At 6:54 PM, December 07, 2009, Blogger Alon Levy said...

No, it was the growth rate that was high. The Houston CSA went from 110% the per capita income of the US in 1997-2003 to 119% in 2007, the last year for which the BEA has data. Dallas went from 109% in 1997 to 106% in 2007, the Austin MSA went from 100% to 96%, and the San Antonio MSA stayed at 88%.

The GDP numbers are different, but I tend to trust per capita income more. The problem with GDP is that it can produce abnormally high numbers for some cities, because it counts all economic activity produced in the area, even by non-residents, and divides it by the number of residents. In the EU, which does its entire analysis with GDP, you get absurd numbers for how rich large metro areas like London and Paris are, which are much higher than what the locals actually make even before you count living costs.

At 8:15 AM, December 08, 2009, Anonymous kjb434 said...

Good point Alon. A GDP per capita is assuming that only the population of the city is producing the economic output of that city. If I was a worker from a far out suburb, I might be insulted that I don't get credit for my economic output.

At 8:25 AM, December 08, 2009, Blogger Tory Gattis said...

I think it's gdp per capita based on metros, not city limits.

At 3:38 PM, December 08, 2009, Blogger Alon Levy said...

Even metros get some incoming commuting, albeit less. The excessive European GDP per capita numbers are often for the equivalent of MSAs.

Another problem is that the natural resources mined in a region also count for GDP, even if the income from them goes primarily to outsiders. Resource-rich areas get unrealistically high GDP numbers, too - for example, again in the EU, the part of Scotland that is deemed to include the North Sea oilfields is supposedly the richest part of the UK outside the London area, even though the oil profits all go to Shell and BP.

At 2:37 PM, December 10, 2009, Anonymous Keep Houston Houston said...

Have you considered changing the title of this blog from "Houston Strategies" to "Houston, fuck yeah!"

Given the preponderance of posts that are amalgamations of other articles lately, I think this would be a wise development. Sort of how HNG-Internorth became Enron.

At 3:06 PM, December 10, 2009, Blogger Tory Gattis said...

Yeah, not only have I been too busy lately to generate original essays, I haven't had a lot of new ideas either that I haven't already explored in the first few years of the blog. I may need to bring some of those back for readers who have just joined in the last couple of years.

But I do consider it part of what I do to pass along links of interest related to Houston that my busy readers are unlikely to come across themselves.

At 12:47 AM, December 12, 2009, Anonymous Keep Houston Houston said...

I have the same exact problem. For awhile I kinda started sliding towards "Keep Houston Houston does METRO and H-GAC's work for them and doesn't get paid for it." But then I remind myself CFE (Christof flipping exists) and the 713 is just fine without another blog detailing cash-vampire streetcar lines.

And I appreciate the links you post. So, ya know, keep doin' whatcha doin'. Just consider changing the name was all I was suggesting.

At 8:58 AM, December 12, 2009, Blogger Tory Gattis said...

Thanks. Looked at from another perspective, I am arguing for a lot of strategies for Houston that are what we are doing already (vs. calls for radical change), so pointing out good things like high rankings and awards and complimentary op-eds by others is a way of supporting my arguments for those strategies. They're working!

At 12:22 AM, December 13, 2009, Blogger Alon Levy said...

The problem with those articles is that what is working now may not work in the future - just compare what people said about Las Vegas and Dubai in 2006 to what they say today. Houston's fortunate to have weathered the current crisis well, but this in itself isn't evidence it'll do well in the next crisis. Cities and countries often emerge unscathed from one crisis and are then destroyed by the next; equally often, they're destroyed by one crisis and then recover and do well in the next crisis.

You can say other things about Houston's strengths, but those strengths should be reflected over the last 10-20 years, rather than just this year: economic diversity, tolerance of immigration, good schools by inner-city standards. But Houston isn't the only city with those strengths. Many other cities have achieved the same without following Houston's path, and conversely many other cities have followed Houston-style policies and gotten bad results.


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