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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

economy

The Capital Region2018 Regional Report

The 10-county Capital Region covers about 8,600 square miles in central Texas, stretching from Llano to San Marcos and from La Grange to Georgetown. The region has a population density of 265 people per square mile, higher than the state’s average of 108 people per square mile.

The Capital Region has one metropolitan statistical area (MSA): the Austin-Round Rock MSA, which includes the counties of Bastrop, Caldwell, Hays, Travis and Williamson. Other counties in the region not associated with an MSA are Blanco, Burnet, Fayette, Llano and Lee.

The economic focus for the Capital Region is Austin (Travis County), the fourth-largest city in the state. The Austin-Round Rock MSA has a population of about 2.1 million.

This report examines regional economic trends including population, personal income, jobs and wages, and education, as well as economic conditions unique to the Capital Region.

Population

The Capital Region’s estimated total population in 2017 was 2.1 million, or nearly 8 percent of the state’s total population. This is an increase of 22 percent (more than 400,000 people) since the 2010 census. An estimated 55 percent of the region’s population is concentrated in Travis County. The Austin-Round Rock MSA accounted for 95 percent of the region’s population and 7.5 percent of the state’s population.

From 2010 to 2017, the region’s population grew at a faster pace than that of the state as a whole (Exhibit 1). While the population of each county in the region increased during this period, Hays outpaced all others, growing by more than 36 percent - three times faster than the state as a whole.


Exhibit 1: Capital Region Population by County,
2010 and 2017
County 2010 Census Estimate (as of July 2017) Percent Change
Bastrop 74,171 84,761 14.3%
Blanco 10,497 11,626 10.8%
Burnet 42,750 46,804 9.5%
Caldwell 38,066 42,338 11.2%
Fayette 24,554 25,272 2.9%
Hays 157,107 214,485 36.5%
Lee 16,612 17,183 3.4%
Llano 19,301 21,210 9.9%
Travis 1,024,266 1,226,698 19.8%
Williamson 422,679 547,545 29.5%
Capital Region Total 1,830,003 2,237,922 22.4%
Austin-Round Rock, MSA 1,716,289 2,115,827 23.3%
Texas Total 25,145,561 28,304,596 12.6%

Source: U.S. Census Bureau


Population Composition

According to a recent Census analysis, median age distribution for the Capital Region’s counties is on par with that of the state as a whole. Five of the region’s 10 counties have a median age significantly higher than the state’s median age of 34.2 years. In addition, the Capital Region is home to a county with one of the oldest populations in the state (Llano), with a median age of more than 56 years. On the other hand, Travis, the most populous county in the region and one of the most populous in the state, has a median age of 33.3. The Austin-Round Rock MSA has a median age on par with that of the state.

Household income in Texas is more or less evenly distributed among five income levels. Of the more than 9 million households within the state of Texas, 22 percent have incomes less than $25,000 and 16 percent have incomes more than $125,000. In every region in the state, nearly 18 percent have an average household income between $50,000 and $75,000. Household income within the Capital Region is significantly higher than that of the state. Only 17 percent have incomes less than $25,000, and 20 percent have incomes more than $125,000 (Exhibit 2).

More than 31 percent of the Capital Region’s total population is Hispanic – more than 7 percent lower than the state’s total Hispanic population of 38.6 percent (Exhibit 3).

Exhibit 2: Capital Region and Texas Household Income

Exhibit 2: Household Income Percentile, Capital Region vs. Texas
Income Level Capital Region State Total
less than $25,000 17.3% 22.2%
$25,000 to $50,000 21.0% 23.6%
$50,000 to $75,000 18.2% 17.8%
$75,000 to $125,000 23.3% 20.2%
more than $125,000 20.2% 16.1%

Source: U.S. Census Bureau

Exhibit 3: Capital Region and Texas Population by Race and Ethnicity

Population by Race and Ethnicity, Capital Region vs. Texas
Race and Ethnicity Capital Region State Total
Hispanic 31.2% 38.6%
Black (not Hispanic) 6.8% 11.6%
White (not hispanic) 54.6% 43.4%
Other 7.4% 6.3%

Source: U.S. Census Bureau


Jobs and Wages

In 2017, the Capital Region accounted for more than 8.5 percent of the state’s total employment. The region’s employment exceeded that of the state and nation with an increase of 30 percent from 2007 to 2017 – the highest growth of any region in Texas. Employment in the Austin-Round Rock MSA increased nearly 31 percent over the same period (Exhibit 4). More than 96 percent of the region’s total jobs are in the Austin-Round Rock MSA.

Exhibit 4: Capital Region Employment, 2007 to 2017
Area Number of Jobs, 2017 Change in Jobs from 2007 Percent Change
Austin-Round Rock MSA 983,525 231,408 30.8%
Capital Region 1,021,675 235,776 30.0%
Texas 12,011,078 1,779,177 17.4%
United States 143,860,846 8,495,037 6.3%

Note: The above figures include private and public sector employees with the exception of active duty military personnel, railroad employees, religious institution employees and the self-employed.

Sources: JobsEQ and Bureau of Labor Statistics


The average wage in the Capital Region was $59,059 in 2017, well above the average wage of the state and nation. In addition, from 2007 to 2017, individual wage growth in the region outpaced individual wage growth at the state and national levels during the same period (Exhibit 5).

Adjusted for inflation, individual wages in the Capital Region increased more than 8.7 percent during this period. Within the region, the Austin-Round Rock MSA average wage was slightly higher than that of the region, but the growth rate from 2007 to 2017 was slightly lower than the region as a whole.

Exhibit 5: Capital Region Wage Trends, 2007 to 2017
Area Average Wage, 2017 Change in Wages from 2007 Nominal Rate of Change, 2007 to 2017 Real Rate of Change,* 2007 to 2017
Austin-Round Rock MSA $59,708 $13,170 28.3% 8.5%
Capital Region $59,059 $13,116 28.5% 8.7%
Texas $55,801 $11,106 24.9% 5.6%
United States $55,375 $10,917 24.6% 5.4%

* The constant or “real” rate adjusts average wages for the effects of inflation in the value of a particular base year. According to the Bureau of Labor Statistics, prices in 2017 are 18.22 percent higher than prices in 2007.

Sources: JobsEQ and Bureau of Labor Statistics


Industry Concentration

Exhibit 6 lists the Capital Region industry subsectors most highly concentrated according to location quotient (LQ) — a measure of how concentrated an industry is in the region relative to the nation — and by share of total state jobs in each subsector. Industries are described according to the federal government’s North American Industry Classification System (NAICS), which is used by federal statistical agencies to classify business establishments.

The Capital Region’s most highly concentrated industries primarily concern technology and administration. Although it is the region’s 10th most highly concentrated industry subsector, the area of professional, scientific and technical services has seen tremendous growth, due in part to Austin establishing itself as a technology-intensive metro economy. This subsector’s employment increased by more than 73 percent from 2007 to 2017, with average wages approaching $100,000 and representing close to 9 percent of the region’s workforce.

Exhibit 6: Capital Region’s Most Highly Concentrated Industries, 2007 to 2017
Industry Description (NAICS1) Job Concentration Job Trends Wage Trends
Location Quotient2 Share of State's Jobs Number of Jobs Change, 2007 to 2017 Average Wage Nominal Rate3 of Change Real Rate3 of Change, 2007 to 2017
Computer and Electronic Product Manufacturing (334) 3.47 28.7% 25,879 -16.6% $140,961 31.2% 11.0%
Funds, Trusts and Other Financial Vehicles (525) 3.01 24.7% 273 -58.4% $143,257 114.7% 81.6%
Data Processing, Hosting and Related Services (518) 2.36 16.6% 5,388 246.0% $111,067 44.7% 22.4%
Museums, Historical Sites and Similar Institutions (712) 2.14 12.5% 3,807 31.0% $22,783 19.8% 1.4%
Administration of Human Resource Programs (923) 2.08 28.2% 11,758 8.4% $64,189 38.5% 17.1%
Administration of Environmental Quality Programs (924) 1.82 30.8% 4,202 -5.1% $65,610 26.2% 6.8%
Heavy and Civil Engineering Construction (237) 1.81 8.5% 14,960 22.3% $61,917 32.8% 12.3%
Merchant Wholesalers, Durable Goods (423) 1.64 10.6% 34,839 6.6% $96,815 17.5% -0.6%
Telecommunications (517) 1.51 10.2% 8,391 27.8% $89,642 29.2% 9.3%
Professional, Scientific and Technical Services (541) 1.50 13.0% 97,637 73.1% $98,065 35.4% 14.5%
Capital Region - 8.5% 1,021,675 30.0% $59,059 28.5% 8.7%

Note: The figures above include private and public sector employees with the exception of active duty military personnel, railroad employees, religious institution employees and the self-employed.

  1. NAICS codes are the standard used by federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing and publishing statistical data related to the U.S. business economy.
  2. The higher the location quotient, the more concentrated the industry subsector is in the region compared to nation.
  3. The constant or “real” rate adjusts average wages for the effects of inflation in the value of a particular base year. According to the Bureau of Labor Statistics, prices in 2017 were 18.22 percent higher than prices in 2007.

Sources: JobsEQ and Bureau of Labor Statistics


Education

A strong educational foundation is the cornerstone for growth and competitiveness in the global economy. As the Texas economy diversifies, becoming more knowledge based, a well-educated workforce offers possibilities for workplace advancement and prospects for business expansion.

In 2016, 91.9 percent of the Capital Region’s class of public high school students graduated, higher than the state’s rate of 89.1 percent (Exhibit 7). The region’s high school graduation rate has increased almost 7 percent since 2010 and has gone from on par with to outperforming the state.

Exhibit 7: Capital Region and Texas Public High School Graduation Rates, 2010 to 2016
Year Capital Region Texas
2010 84.2% 84.3%
2011 86.0% 85.9%
2012 88.7% 87.7%
2013 90.2% 88.0%
2014 91.2% 88.3%
2015 92.0% 89.0%
2016 91.9% 89.1%

Source: Texas Education Agency


Many high school graduates enroll in postsecondary programs, offering greater job prospects and the possibility to of earning higher wages. Residents of the Capital Region enjoy a variety of options for higher educational achievement (Exhibit 8).

Exhibit 8: Capital Region Institutions of Higher Education, 2017

Universities

  • Concordia University Texas
  • Huston-Tillotson University
  • Southwestern University
  • St. Edward's University
  • Texas State University
  • The University of Texas at Austin

Junior and Community Colleges

  • Austin Community College

Health Science Schools

  • The University of Texas at Austin Dell Medical School

Source: Texas Higher Education Coordinating Board

Regional Economy

The Comptroller's office has analyzed data pertaining to the Capital Region, examining the region’s dynamics and competitiveness.

Sales Tax Revenue

Receipts subject to state sales tax directly attributed to the Capital Region trended upward in the past decade (Exhibit 9). The region has had an almost 70 percent climb since the 2009 recession, and receipts from 2017 indicate this astounding trend will continue (trend lines depict trends in data, either upward, downward or flat, for an extended period of time).

For 2017, receipts subject to state sales tax directly attributed to businesses in the Capital Region approached $36.3 billion, contributing nearly 7.5 percent to the state’s overall sales tax revenue collections. The Austin-Round Rock MSA directly accounted for $34.8 billion of this total.

A review of two-digit NAICS codes allows for a broad analysis of industry sectors within the region. The retail trade and manufacturing sectors contribute most to taxable sales, with the two combining for more than 68 percent of the region’s state sales tax contributions. Two other industries of note are the wholesale trade and construction sectors, combining for 13 percent of the region’s reported sales tax contributions.

Exhibit 9: Revenue Subject to Sales Tax, 2007 to 2017
Year Capital Region
2007 $23,267,117,612
2008 $23,427,541,345
2009 $21,491,231,443
2010 $22,395,326,073
2011 $24,116,546,011
2012 $26,494,079,033
2013 $28,459,835,702
2014 $30,610,734,288
2015 $32,243,756,987
2016 $34,246,387,029
2017 $36,252,254,799

Note: Numbers shown are for reported revenue subject to sales tax and directly attributed to the region.

Source: Texas Comptroller of Public Accounts


U.S. Military Installation Impact

Texas has 13 U.S. military installations within its borders. In 2017, these bases directly employed more than 224,000 and supported nearly 625,000 jobs. The U.S. military installations in Texas contributed about $62.3 billion to the state’s gross domestic product (GDP).

There are currently no bases located within the Capital Region. However, the U.S. Army has chosen Austin to be the headquarters of its Futures Command, which is expected to grow to roughly 500 staff and have an annual budget of up to $100 million. This activity will have a direct and noteworthy economic impact on the region in the future.

Capital Region vs. the U.S.

Based on data from the World Bank and the U.S. Bureau of Economic Analysis, if Texas were a nation, it would rank as the world’s 10th largest economy in terms of GDP.

Likewise, the Capital Region ranks notably alongside other states in demographic and economic standings. The Capital Region would be the 48th largest state in terms of land mass (square miles) and have the 36th largest population. The region would also have the 16th highest per capita income and would have the 2nd highest percent of population with bachelor’s degrees (Exhibit 10).

Exhibit 10: Capital Region Compared to the U.S.
Measure Capital Region Rank if Region
was a State
Texas State Rank U.S.
Population 2,237,922 36 28,304,596 2 325,719,178
Age 25+ with at least a High School Diploma 88.7% 30 82.4% 49 87.0%
Age 25+ with Bachelor's Degree or Higher 40.8% 2 28.1% 29 30.3%
Population Under 18 Years 23.2% 20 26.0% 2 22.6%
Population 65 Years and Over 11.3% 49 12.3% 48 15.7%
Age Dependency Ratio* 52.8% 1 62.1% 20 61.9%
Per Capita Income $51,230 16 $46,204 25 $49,204
Unemployment Rate 3.1% 8 4.3% 26 4.4%

* The age dependency ratio is the share of dependent-age persons compared to the working-age population minus the sum of those under 18 years and 65 and older divided by the population age 18 to 64. In other words, for every 100 working-age people in Texas there are about 62 dependent-age people.

Sources: U.S. Census Bureau, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis


Conclusion

The Capital Region is a microcosm of the state; it is both urban and rural, with a vibrant and diverse economy. Travis County, with the city of Austin at its center, is the economic hub of the region.

As this report notes, the Capital Region and its 10 counties have many economic variables and challenges that are unique. This region touts a highly educated population with high income and low unemployment.

If this region were a state, it would have the second-highest share of population 25 and older with at least a bachelor’s degree (behind Massachusetts). The region has had a population growth of 22 percent since 2010, with more than 43 percent of households having incomes over $75,000.

The Capital Region’s local economy has demonstrated strong, steady and consistent growth. The region boasts a large concentration of industries surrounding the technology sector and has maintained a high employment growth rate from 2007 to 2017, combined with high average wages. The U.S. Army’s selection of the region for the location of its Futures Command will add to this positive economic growth.


Questions?

If you have any questions or concerns regarding the material on this page, please contact the Comptroller's Data Analysis and Transparency Division.

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