Real Estate Blog – Scott Nicholson

The Brookings Institute recently completed a study titled Export Nation: How U.S. Metros Lead National Export Growth and Boost Competitiveness. This study used an innovative new strategy to measure US exports, attempting to more accurately capture goods originating in the US and exported services, which differ from traditional export measures used by the Census Bureau and International Trade Administration.* The study compared exports in 2003 and 2008, and the results revealed that US exports grew 46% over this period, double the import growth rate, and Austin™s share of US metro exports has grown as well, with the Austin MSA exports growing 79.8% between 2003 and 2008, the 10^th highest growth rate among US metros, bringing Austin from the 31^st largest metro exporter (by dollar exported) in 2003 to the 26^th largest metro exporter in 2008.

Alongside Austin, two other Texas cities ranked high among US metro exporters, Houston and Dallas. Both cities saw significant growth in their exports during the study period, with Houston ranked 4^th nationally in export growth and moving from the 6^th largest exporter to 4^th and Dallas dropping from 4^th largest exporter to 5^th, but these positions can partially be considered a factor of their metropolitan population, while Austin holds a ranking above its relative population. In 2008, Dallas was the 4^th largest MSA, with a population of 6.3 million and Houston was the 6^th largest, with a population of 5.7 million. Austin, however, with a population of 1.7 million was the 36^th largest national MSA, but the 26^th largest exporter. This differential reveals the Austin MSA™s relative strength in exports, surpassing larger metros such as Charlotte, NC; Virginia Beach, VA; San Antonio, TX; Kansas City, MO; Orlando, FL; and Denver, CO.

The Austin metropolitan area™s expanded share of the national export market can be largely attributed to the Computer and Electrical Product Manufacturing Industry, which comprised 42.9% of the value of Austin™s exports at $4,491 million, accounting for an estimated 39,363 local export-related jobs, by far the highest of any industry. Conversely, Royalties from Intellectual Property, which was Austin™s second largest exported sector with 9.8% at $1,004 million only accounted for an estimated 146 local export-related jobs. Education, the fastest growing Austin export sector, at 319% between 2003 and 2008, was the fourth largest job producer, creating an estimated 2,856 export-related positions.

Austin™s export industry trends generally follow national trends, with the top 10 US export industries including: Transportation Equipment (1); Chemicals (2); Computer and Electronic Products (3); Machinery (4); Business, Professional, and Technical Services (5); Travel and Tourism (6); Royalties from Intellectual Property (7); Agriculture (8); Financial Services (9); and Port and Freight Services (10). Similarly, Austin™s Top 4 export markets mirror national destinations, with Canada and Mexico receiving 13% and 9% of the MSA™s export value respectively (16% and 9% nationally). Bucking the national trend, however, China surpasses Germany, as Austin™s 5^th largest export market, capturing 6.2% of Austin exports.  

Regarding which Austin industries export to various markets, a large share of Computer and Electrical Products go to Canada, Mexico, and China, with 9.6%, 9.8%, and 8.1% respectively. Similarly, these three markets are the largest recipients of Austin Machinery exports, with Canada receiving 17.9%, Mexico receiving 8.9%, and China receiving 5.4%. Conversely, the UK and Japan are some of the largest markets for Austin exports of Intellectual Property Royalties, receiving 9.7% and 8.2% respectively. The UK is by far the largest market for Austin exported Financial Services, as the destination for 19.2% of this industry™s exports. Lastly, China is the largest market for Austin™s fastest growing export industry, Education, with China receiving 12.9% of Austin™s Education exports.

*In order to generate estimates of metropolitan exports, Brookings allocated exports for industries to metropolitan areas based on each area™s percentage share of the national value-added for that industry. The same strategy was utilized to estimate the destination of US metro exports. For example, if Austin produced 10% of the value-added for the US Computer and Electrical Product Manufacturing industry, Austin would be allocated 10% of the US exports, and if China receives 5% of US Computer Industry exports, 5% of Austin™s exports would be allocated to China. While these numbers should be reviewed with caution, as they are estimates, methodology and comparison to ITA origin of movement data have lead Brookings to conclude that œthey accurately reflect export activity within a reasonable margin of error and are more accurate than any previous measures.