Austin, Round Rock Deemed Among Nation's Most Recession-Resistant

AUSTIN, TX — The mighty nature of the Austin-Round Rock economic engine is no secret but lauded by municipal officials, buttressed in economic reports and evidenced anecdotally based on the sight of cranes dotting the landscape, abundant construction sites and ongoing street work to accommodate ever-growing traffic at every turn as the region grows.

Researchers at SmartAsset now add another superlative to the region's economic power in a new report. According to its findings, SmartAsset ranked the metro area as among the nation's most recession-resistant.

Granted, the national unemployment rate now hovers at a historic low of 3.5 percent, and the Dow roared toward 30,000 in early 2020 after a decade-long bull market. Yet analysts noted there are signs of economic vulnerability — including the Dow's worst week in 2008 and recent hiccups caused by potential effects of new coronavirus on the global economy. Indeed, and notwithstanding recent gains, the U.S. could face another recession — and not every city is equally equipped to weather the next downturn, SmartAsset analysts noted.

To find the most recession-resistant cities, SmartAsset examined nine metrics related to employment, housing and social assistance, looking both at recent figures and changes during the last recession in assessing the economic strength of 264 U.S. cities.

The upshot: Both Austin and Round Rock rank among the top 15 in terms of resistance to recession, according to the findings. Austin leads the way, ranking fifth, and Round Rock comes in 11th. Both cities rank in the top 15 percent for the three categories considered: Employment, housing and social assistance.

Here's what SmartAsset analysts had to say about Austin:

"Austin, Texas, ranks within the top 11 percent of the study in each of the categories we considered. Specifically, it ranked 13th-best for employment, 29th-best for housing and 26th-best for social assistance. Austin also holds top-15 rates for individual metrics in each of those categories. In terms of employment, its 2018 labor force participation rate is 10th-highest in the study, at 74.0 percent. In terms of housing, the average home value in Austin increased by almost 10 percent during the Great Recession. Finally, Austin ties for the 15th-lowest percentage of the population relying on public assistance, at approximately 1 percent."

Austin and Round Rock stood out for their change in median home values during the last recession, analysts said. During the Great Recession (2007-2010), home values decreased by 13.7 percent, on average, across the 264 cities as SmartAsset's findings found. Conversely, analysts found, median home values in Austin and Round Rock increased by 9.7 percent and 1.6 percent, respectively.

Analysts found Texas as a whole performs particularly well for its state’s rainy-day funds as a percentage of state expenditures — ranking second-highest of all 50 states at almost 19 percent, SmartAsset researchers found. The findings bear this out, as three of the four cities besting Austin are in Texas: Frisco, Plano and Denton in the 1st, 3rd and 4th positions, respectively. Breaking the Texas streak was Cedar Rapids, Iowa, in the second slot.

The full report, including the methodology and key findings, can be accessed by clicking here.