Tech Jobs, Tourism Fuel Changes in US Population Centers: Research – The Hill

history at a glance

  • The San Francisco Bay Area experienced the fastest economic growth in 2022, followed by Austin, Texas and Seattle, Washington.

  • Much of the growth was due to success in technology sectors and the exodus of US citizens to the southern and western regions of the country.

  • In comparison, Milwaukee, Wisc. at the bottom of the list as its economy contracted 0.5 percent.

The shift to high-tech jobs, migration west and south, and the recovery of the leisure and hospitality sectors in the wake of the COVID-19 pandemic are all behind economic growth in the United States’ largest metropolitan areas in 2022, according to new research from the Kenan Institute of Private Enterprise.

The findings are part of the institute’s American Growth Project, an initiative aimed at collecting economic data and analysis on the nation’s cities and counties. As part of the project, researchers ranked the country’s 50 largest metropolitan areas (EMAs) according to the speed of their economic growth in 2022.

The San Francisco Bay Area took first place as the region’s GDP grew 4.8 percent in 2022. Austin, Texas followed; Seattle, Washington; Raleigh and Durham, NC; and Dallas, Texas.

The San Francisco Bay Area is home to Silicon Valley, one of the most popular locations for tech startups, a fact that has likely fueled growth in the region in 2022.

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However, potential hiring freezes and layoffs in the sector could hit the region hard, while “steep jumps in the number of active listings – as well as measures of demand and competition from homebuyers – suggest the region’s housing market is declining among the fastest in the country heard,” the authors wrote.

As more Americans emerged with a travel bug from the COVID-19 pandemic, the economies of popular travel destinations like New Orleans also benefited. Between August 2021 and August 2022, the city’s leisure and hospitality services grew six percent, ranking ninth on the list of fastest growing economies.

Tourism to Orlando, Florida, meanwhile, with its many theme parks and popularity as a trade show destination, put the region in 10th place. Its economy grew by 2.4 percent in 2022.

The researchers also assessed the overall population and growth. “A total of 216 million people live in the 50 largest EMAs, or 65% of the US population.” These regions account for over 72 percent of the country’s economic activity each year, representing a GDP of around $18 trillion.

By population, New York is the largest EMA, encompassing parts of New Jersey, Connecticut, New York and Pennsylvania. Over 23 million people live in this EMA and collectively generate more than $2 trillion in economic activity annually.

Each EMA experiences different labor market conditions, the authors explained, but an economic slowdown in 2023 could hurt individual microeconomies.

“Typically, manufacturing and construction falter the most during recessions, particularly when the Federal Reserve is raising interest rates,” the report said.

“Higher mortgage rates and auto loans continue to depress demand, but we still face housing shortages and automakers are struggling to keep up with demand.”

However, any long-term shift toward restructuring or repatriating American manufacturing jobs from overseas could benefit regions like Detroit, Michigan; Denver, Colo.; and Dallas, Texas.

After the COVID-19 pandemic and the 2020 recession, the technology sector saw one of the strongest recoveries. Whether the sector can survive a future recession remains to be seen, while significant downturns could hit the tech-heavy economies of Austin and San Francisco.

Other unknowns, such as the future of the war in Ukraine, could also impact microeconomies. For example, should Ukraine initiate significant military reconstruction, it could boost the fortunes of Virginia Beach, an area with a large defense presence, or place San Antonio No. 11, home of the country’s largest common base, in the top 10 fastest-growing countries bring microeconomies, the authors speculated.

The Institute is an impartial business policy think tank affiliated with the University of North Carolina’s Kenan-Flagler Business School.


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