Research Briefing | May 23, 2024

Dallas and San Francisco lead top 10 US metro GDP growth

San Francisco, Atlanta, Dallas, and Boston had the strongest growing economies out of the top 10 metros in the five years preceding the Covid-19 outbreak, but that all changed once the pandemic hit; Houston outgrew Atlanta, Los Angeles fell behind Washington, and growth rankings shifted. Looking forward, Los Angeles and San Francisco benefit from favorable industrial compositions, while Dallas, Houston, and Boston have advantages in terms of local metro characteristics. As a result, we forecast that San Francisco, Dallas, and Boston will spearhead the top 10 metro GDP growth over the next five years. And other metros are breaking through into the top tier; Seattle, for instance, nearly matched the GDP of Atlanta and Philadelphia in 2023, and we forecast its GDP will be considerably larger than both by 2028.

What you will learn:

  • Over the 2015-19 period, the strongest growing metros in terms of GDP were San Francisco, Atlanta, Dallas, Boston, and Los Angeles. San Francisco’s strong performance is reflective of a high-tech ecosystem and a more desirable quality of life. For Atlanta and Dallas, strong growth in the economy was due to lower labor, living, and business costs; although Atlanta had a more favorable industry mix than Dallas, supporting higher growth. Over the 2020-23 period, Dallas, San Francisco, and Houston had the highest growth. The Texan metros gained ground on the rest due to their light regulatory, low-cost business environments.
  • In 2024, the metros which currently have the “best” industrial compositions (in the sense of having concentrations in sectors we think will grow rapidly at the national level) are San Francisco, Los Angeles, and Atlanta. However, Dallas and Houston have tended to perform better than their respective industrial makeups might lead us to expect, while Los Angeles and New York have tended to perform worse, in part due to higher living and business costs.
  • We forecast that San Francisco, Dallas, and Boston will lead the way for top 10 metro GDP growth over the 2024-28 period. We expect Atlanta to follow this growth closely and most of the East Coast metros along with Chicago will trail behind. It is worth noting that a couple of metros outside the top 10 are gaining on GDP growth robustly: Seattle and Miami are among the most notable of these metros, both of which have rapidly expanding tech sectors. We forecast that over 2024-28, both metros will outpace the national and 10-metros average growth, with Seattle surpassing Atlanta and Philadelphia in total GDP terms and even rivaling Boston.
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