Drivers of consumer spending across southern US metros
Our analysis of the economies of metros across the US provides us with a basis for projecting household income growth and consumer spending patterns, both overall and by market segment. We see 2023 as a likely good year for household spending across southern metros, driven by the migration of people from cities elsewhere.
What you will learn:
- Many southern metros, both large ones such as Atlanta and Dallas and smaller cities such as Austin and Raleigh, are clearly performing well in GDP and employment terms. That is a major driver of their population growth. Other metros such as Memphis and New Orleans, which are under-represented in fast growing sectors such as tech, are seeing weaker growth. And some southern metros such as Tampa and Miami are enjoying population growth driven by retirees moving there. Our forecasts reflect these different factors.
- Housing affordability is also crucial, including the difference compared with west coast tech majors such as San Jose, San Francisco, and Seattle. While there are concerns that this gap will narrow over time, reducing the competitive advantage of southern metros such as Austin, we think it is unlikely to happen fast enough to be a major problem.
- These macroeconomic drivers feed our views on personal income growth and consumer spending prospects across southern metros. We forecast that Austin, Houston, and Dallas will all do particularly well in terms of consumer spending growth in 2022-26. But some southern metros will under-perform such as Memphis and New Orleans.
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