These Markets are Leading in GDP Growth

U.S. GDP rose at an unrevised 2.1% annualized rate last quarter, the Commerce Department reported last week in its third estimate for the April-June period.

Pockets of greater growth, of course, can be found across the country.

All but one market, Hartford (-0.2%), will show positive GDP growth in 2023, according to Oxford Economics, whose stats are cited in a Colliers report. Southern metros and areas with significant tourism are expected to have the healthiest growth: Houston (4.4%), Dallas-Ft. Worth (3.4%) and Nashville (3.2%) lead all U.S. markets.

However from 2023 to 2027, the average annual GDP growth rate is projected to be 1.6% and Oxford Economics projects that through 2027 employment growth will decrease to an average annual rate of 0.7% and trail GDP growth by a 2:1 margin, Colliers said. But some areas will still lead GDP growth over the medium term.

Colliers compiled a list of such cities, ranking them across five metrics to determine those that are best positioned to enjoy a sustained recovery. 

It compared the metros’ GDP growth rates, pinpointing the size of the local economy and performance. It also took into account employment, as well as spending and population.

Following are some of the results: the top five office markets in terms of their GDP and their metro office employment percentage change. Detailed metrics are provided for the employment, population, spending and housing prices, as well as for its office inventory, vacancy rate and availability rate, so comparisons can be made to help understand how they may fare the rest of this year and beyond.

Austin came in first for its average annual GDP growth at 4.5% Q2 this year. Between this year and 2027 its growth is expected to be 2.8%. Its employment for Q2 2023 growth is cited at 3.1%, its population at 1.9%, spending at 3.7% and house prices at -04.9%. Its total office inventory is 100,685,557, its vacancy rate is 18.9% and its availability rate is 22.8%

Jacksonville’s average annual GDP came in at 2.6% and between this year and 2027 its growth is projected to be 2.0%. Employment puts it in the second spot at 3.7%, population at 1.4%, spending at 2.8% and house prices at 0.8%. Its total inventory is 54,883,154 square feet, its vacancy rate at 10.1%, its availability rate at 14.59%.

Raleigh’s GDP for Q2 2023 growth is 2.5% and for between now and 2027 is 2.7%. Employment growth is 2.5%, population is 1.3% and spending is 2.4%. The total inventory is 53,095,896, vacancy rate is 17.6% and availability rate is 21.7%.

Dallas-Ft. Worth Q2 2023 growth is 3.4%. Between this year and 2027 its growth is expected to be 2.3%. Employment for this same period is 3.1%, its population at 1.4%, spending at 2.9% and its house prices at 0.7%. Total office inventory is 317,023,517, the vacancy rate is 20.6% and availability rate is 23.2%.

New Hampshire’s GDP growth is listed at 2.4% and at 1.8% for between this year’s Q2 and 2027. Its population is 0.4%, spending at 2.1% and housing prices at 1.9% for the same Q2 2023 growth and rank. When it comes to inventory, the total is 23,685,409, the vacancy rate is 12.5% and the availability rate is 11.4%.