San Antonio’s economy will outgrow most of the nation’s other large cities this year, according to a new report — despite a slowdown from 2022.
The report from the Kenan Institute of Private Enterprise ranks the Alamo City fifth among U.S. cities by expected growth of gross domestic product, prognosticating that its economy will grow by 1.4 percent through 2023, a tie with Salt Lake City.
Austin was ranked second among U.S. cities with an expected growth rate of 2.8 percent.
Last year, the San Antonio economy grew by 2.6 percent, the report says, citing economic data released in December.
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Like Austin, the rest of the cities predicted to outgrow San Antonio this year has strong tech sectors. The San Francisco Bay area is No. 1 with an expected rate of 3 percent; Seattle was third at 2 percent; the Raleigh and Durham area of North Carolina was fourth with 1.6 percent.
The report predicts that the U.S. economy will enter recession in the second half of 2023 or early 2024, citing uncertainty after “a volatile year that included both strong job growth and persistent inflation.”
“The good news is that we expect the anticipated recession to be relatively mild,” with more than half of U.S. cities still enjoying growth, the report says.
Cities with economies that rely on tourism — a group that includes San Antonio — are “expected to be hit hard as consumers cut back on unnecessary spending during the downturn,” the report says.
“After two years of lockdowns, however, pent-up demand — which is hard to model — may keep the tourism industry afloat,” it says.
How it compares
The institute, which operates as part of the UNC Kenan-Flagler Business School at the University of North Carolina, predicts the Dallas economy will grow at a slightly slower rate than San Antonio’s: 1.3 percent. Houston’s economy is expected to grow at 0.4 percent.
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The report predicts negative growth for many U.S. cities, including Chicago and Las Vegas, with each expected to suffer GDP declines of 0.6 percent.
It anticipates San Antonio’s GDP to reach $168 billion this year. In 2021, the San Antonio-New Braunfels metro area had a GDP of $144.3 billion, up from $115.3 billion in 2016 and $88.4 million in 2011, according to the Federal Reserve Bank of St. Louis.
“Cities with strong economic fundamentals, such as emerging industries and positive migration inflow, can perform well even during a national economic slowdown,” the report says.
For years, San Antonio has been one of the fastest-growing cities by population in the U.S. Between 2020 and 2021, more people moved here than anywhere else in the country, census data showed last year. Between July 2018 and the same month in 2019, the city’s growth rate was outpaced only by Phoenix.
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In December, another report from the Kenan Institute said San Antonio’s economy made one of the biggest climbs in productivity among large U.S. cities over the past 15 years.
The economies of Austin, Dallas and Houston grew at rates of 4.9 percent, 3.3 percent and 1.9 percent, respectively, according to this month’s report, which the institute released as part of its American Growth Project analyzing the growth of regional economies in the U.S.
The only economy listed as growing faster than Austin’s last year was that of the San Francisco Bay area, with a GDP growth rate of 5.1 percent.