According to a new ranking from BusinessWeek, Austin is currently the second strongest metropolitan economy in the nation, receiving praise for its low unemployment rate and stable housing market.
Research from the Brookings Institution’s new MetroMonitor study, used in BusinessWeek’s ranking, is based on job growth, home prices, unemployment change and gross metropolitan product, a measure of all goods produced
in Austin.
“As the state capital and home to one of the world’s top research universities, Austin
has an unmatched balance of high-quality living, cutting-edge science and technology and a business-and-entrepreneur-friendly climate,” said Donya White, Austin Chamber of Commerce spokeswoman.
“Austin also leverages one of the country’s most innovative and educated young work forces with the resources that businesses need to establish roots and grow exponentially,” White said.
Austin’s strong, diverse base of small companies lessened the effect of the nationwide recession on the city according to Michelle Frith, outreach and marketing coordinator for the city of Austin’s Small Business Development program. On average, 86 percent of businesses nationwide are small businesses. In Austin, small businesses make up 94 percent of all businesses in the city.
Austin’s Small Business Development Program, which provides tools and resources and guidance for new businesses, is one of the only business development programs in the nation funded by a city council. The city’s funding is a reflection of how valuable small businesses are to the Austin’s economic stability, Firth said.
“People really support small businesses [in Austin], and owners aren’t afraid to start anything new or unusual,” Frith said. “Our culture supports starting new businesses.”
Austin’s diverse economy also prevented the recession from causing intense suffering, said Daniel Hamermesh, a UT economics professor.
This particular recession has not hit heavy in the industries that Austin is heavy in, which are government and technology,” Hamermesh said. “Also, the past four years [Austin] did not see a very big housing boom. So when bad times came, we didn’t have a big bust.”
City Councilwoman Randi Shade said the housing market is helping Austin’s economy.
“We have a comparably affordable house market,” said Shade. “Those amongst other factors allow us have to a striving economy, including recession-proof industries here, like the University.”
The state of Texas had six other metropolitan areas in the Brookings Institute’s top 20 metro areas including San Antonio, which was ranked No. 1. This week, Gov. Rick Perry traveled to New York with Texas business leaders to encourage businesses there to relocate or expand into Texas.
“Texas overall is a good place to live,” Hamermesh said. “The economy has done very
well here.”
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