Local News

Just as the nation is struggling to avoid a potential financial crisis, new figures released on Thursday show just how well the economy was performing in recent years.

The gross domestic product—or total value of goods and services produced by labor and property—grew in 308 of 363 U.S. metropolitan areas between 2005 and 2006, according to data from the Bureau of Economic Analysis.

In Austin, the GDP hit $71 billion in 2006, up 11 percent from $64 billion in 2005, figures show. Private industry made up most of those totals, accounting for $56 billion of GDP in 2005 and $61 billion in 2006. The local economy ranks 39th in the nation.

Strong growth in financial industries—specifically real estate and securities, commodity contracts, and investments—accounted for 39 percent of U.S. metropolitan area GDP growth in 2006. That fact from two years ago may be a bit sobering today as it’s those same industries that have been most affected by the current economic downturn. In terms of dollars, the finance, insurance and real estate sectors accounted for roughly one out of every five dollars of total GDP in U.S. metro areas .

Brian Kelsey, director of Community & Economic Development for the Capital Area Council of Governments, says the Austin area is less exposed to the financial crisis because those same industries only make up about 15 percent of the area's GDP, compared to 40 percent or more in cities like New York.

"That said, the combined value of those sectors in Austin is around $10 billion, so we would be foolish to think that we are going to escape this mess unscathed," says Kelsey.