Forbes: If one state is a poster child for economic recovery, it's Texas
March 08, 2010
AUSTIN – Forbes has ranked Austin as the city best surviving the recession. Austin tied with Washington, DC for the number one slot. Four Texas cities made the top 10, including Dallas, San Antonio and Houston. Forbes looked at unemployment, rate of job growth and projections, home prices and cost of goods and services.
“This Forbes ranking highlights the relative economic strength of our state’s major metropolitan cities, which is good news not only for the people who live in Texas, but for those looking to move to a state with a strong economic future,” said Gov. Rick Perry. “Texas continues to be the best state in the nation to live, work and raise a family thanks to our low tax burden, predictable regulatory climate, skilled workforce and principled, disciplined spending.”
Cities Where The Recession Is Easing
In recent weeks business in Washington, D.C. ground to a halt as record snowfalls pummeled the area and a sparring match over national health care reform hijacked the political conversation. But the nation's capital is getting something right: It is emerging from the recession better than any other major city in the country, according to research by Forbes.
Jobs in Washington are growing quickly, and in 2008 the city produced more in goods and services than almost anywhere in the country.
D.C. and nine other cities (among them: Boston, Los Angeles and a host of metros in Texas) are best surviving the downturn in part because they specialize in industries that are relatively insulated from economic volatility. Federal and state jobs all but guarantee the health of a local economy, and nowhere is there more government-related work than in Washington. The city has one of the lowest unemployment rates in the country, at 6.2%, and its output amounts to $362.3 billion, more than three times the average for the country's largest cities.
List: Cities Where The Recession Is Easing
It also saw a more modest slide in home sale prices than many other metros in late 2009. Cities where the recession's effects are lessening either never felt the full brunt of the housing crisis, or have proven resilient enough that demand is returning sooner than elsewhere in the country. These strong housing markets further enrich the local economy by feeding a host of secondary industries, like construction, lending and household services.
Uncle Sam as a Recession Shield
Government spending hasn't hurt Austin, Texas, either. It's the seat of state government and tied for No. 1 on our list of 10 cities best surviving the recession. Jobs have been lost nearly everywhere in the last three years, but between December 2007 and December 2009 the number of jobs in Austin rose by 0.98%; more than any of the other major cities we looked at. And by three years from now, jobs are expected to grow by 8.09%, the second-best job outlook on our list. Third on the list is Dallas, home to a thriving technology and energy sector, where jobs are projected to jump 7.19% in three years.
Behind the Numbers
To find the cities where the recession was easing, Forbes looked for a relatively low unemployment rate, using December 2009 figures, the most recent available, and the rate of job growth between December 2007 and December 2009, both from the Bureau of Labor statistics. We sought cities where economists expected that jobs would keep growing, based on the three-year job-growth forecast from Moody's Economy.com; we also looked for metros with the highest positive change in median sale price for single-family homes between the third and fourth quarter of 2009, according to the National Association of Realtors. Finally, we factored in Metropolitan Gross Domestic Product--the dollar amount of goods and services produced within a metro area--provided for 2008, the most recent available, by Moody's.
Forbes ranked the 40 largest Metropolitan Statistical Areas for which it had comprehensive data (that excludes Nashville, Tennn. and Detroit, Mich.) on all these measures, then averaged the rankings for a final score.
Good Fortune In The Lone Star State
If one state is a poster child for economic recovery, it's Texas, home to four of the 10 cities on our list. There's more to why Austin, Dallas, San Antonio and Houston are faring well than just the state's energy industry. The tech, government and education industries supplement the oil state's riches. As for housing, cities in Texas didn't see the same run-up in home prices and rampant speculation that led to the spectacular bubble burst elsewhere in the country.
"The housing market got lucky, if you want to look at it that way," says James P. Gaines, research economist at the Real Estate Center at Texas A&M University.
"We didn't have excessive overbuilding, so we don't have a big overhang of unsold new homes, and because Texas has among most affordable housing in the country, the demand sustained."
Like Austin and Dallas, Houston, tied for No. 4 on the list, is expected to experience a three-year 7.03% rise in jobs. But nowhere are jobs projected to grow more than in San Antonio, where four military bases should help drive its expected 8.32% increase.
To view the article in its entirety, please visit: http://www.forbes.com/2010/03/02/cities-recession-jobs-...