Texas Metropolitan Economies

This is the first in what will be an ongoing series of posts on the Texas economy from the standpoint of its metropolitan areas.

Metropolitan areas are defined by the Office of Management and Budget, a part of the White House. Counties with interconnected commuting patterns are combined into a single metropolitan statistical area (MSA) or, metro area, for short. Each metro area is a common labor market. Companies in that metro area will generally be drawing their workers from the included counties.

Despite its wide open spaces and Hollywood reputation, Texas is more urbanized than the U.S. as a whole. Texas urban areas include 85 percent of the state’s population compared with an 81 percent urban share for the nation. Texas’ 25 metro areas include 82 of our 254 counties. The map below shows the metro areas in green outline. Most of the metro counties are in the eastern half of the state.

Texas MSAs

An urbanized state with a lot of open space

The map also shows the land area of Texas’ 1,700 cities and towns in yellow. Since metros are defined by county, many of the smaller MSAs include only one or a few small cities at the center of a mostly unincorporated metro area. Only the largest metros like Houston and Dallas=Fort Worth are mostly incorporated. This reminds us that population and jobs are even more concentrated than the metro boundaries imply.

Economists and other researchers pay close attention to the health of metro areas. Most major government statistics are published at the metro area. Businesses and others base marketing and expansion decisions on the relative health of metro areas. Government planners and nonprofits need to understand metro area growth to better prepare public services like transportation and public safety.

Today we will take a quick look at a key summary statistic, gross domestic product. When calculated at the MSA level it is often called gross metro product (GMP.) It is defined similarly to the national gross domestic product (GDP) as the total final value of all goods and services produced in a given geography. Economic output is another term for GDP. With a common definition, we can compare GMP performance to national GDP or even state gross state product (GSP.)

Texas’ total economy is over $1.6 trillion. That is slightly larger than the Canadian economy, and 25 percent larger than the Russian economy. Of that total, 93 percent comes from the state’s metropolitan areas. Clearly, it is essential to understand our metro areas if we want to understand the Texas economy as a whole.

The table below lists all Texas metro areas and their GMP growth since the Great Recession in 2008. For comparison at the bottom, we see that the national economy grew 26 percent over the last eight years. Texas’ growth was slightly faster at 30 percent. Metro area performance varies. Only 40 percent, or ten of the 25, of the metro areas grew faster than the state overall. These tended to be the largest metro areas. The state’s smaller metros have not seen as much growth. This uneven pattern is identical to what economists have seen nationwide since the recession. Some communities are prospering, some are continuing to decline, and many are simply marking time.

In future posts we will look closer at our metro areas by digging into the details of different industries and what is happening to jobs, households, and income within and across the state’s metro areas.

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