This analysis predates the COVID-19 crisis and the economic impacts that followed. It is offered as an overview of the Capital regional economy and a resource for comparative purposes.
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 Capital region has one metropolitan statistical area (MSA), the Austin-Round Rock MSA, which includes Bastrop, Caldwell, Hays, Travis and Williamson counties. Counties in the region not associated with the MSA include Blanco, Burnet, Fayette, Llano and Lee counties.
This report examines regional economic trends including population, household 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 2019 was about 2.4 million, or nearly 8 percent of the state’s total population. That represents an increase of 28.5 percent (more than 500,000 people) since the 2010 Census. An estimated 54.2 percent of the region’s population is concentrated in Travis County. The Austin-Round Rock MSA accounted for almost 95 percent of the region’s population and 7.7 percent of the state.
From 2010 to 2019, the region’s population grew at a faster pace than the state (Exhibit 1). While the population of each county in the region increased during this period, Hays County outpaced all others, growing by more than 46 percent — three times faster than the state.
Exhibit 1
Capital Region Population by County,
2010 and 2019
County
2010 Census
Estimate
(as of July 2019)
Change 2010 to 2019
Percent Change
Bastrop
74,171
88,723
14,552
19.6%
Blanco
10,497
11,931
1,434
13.7%
Burnet
42,750
48,155
5,405
12.6%
Caldwell
38,066
43,664
5,598
14.7%
Fayette
24,554
25,346
792
3.2%
Hays
157,107
230,191
73,084
46.5%
Lee
16,612
17,239
627
3.8%
Llano
19,301
21,795
2,494
12.9%
Travis
1,024,266
1,273,954
249,688
24.4%
Williamson
422,679
590,551
167,872
39.7%
Austin-Round Rock, MSA
1,716,289
2,227,083
510,794
29.8%
Capital Region Total
1,830,003
2,351,549
521,546
28.5%
Texas Total
25,145,561
28,995,881
3,850,320
15.3%
Source: U.S. Census Bureau
Population Composition
According to the U.S. Census Bureau’s 2018 American Community Survey, Capital region counties’ median age distribution 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 median of 34.2 years. In addition, the Capital region is home to one of the “oldest” counties in the state, Llano County, with a median age of more than 56 years. On the other hand, Travis, the region’s most populous county 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.
In 2018, more than 31 percent of the Capital region’s total population was Hispanic — more than 7 percentage points lower than the state’s total Hispanic population share of 38.6 percent (Exhibit 2).
Household Income
In 2018, the Capital region’s median household income was $72,439, significantly higher than the state median. Texas’ household income is generally distributed among five income levels. Of more than 9 million Texas households, 21 percent had incomes less than $25,000 in 2018, while 17 percent had incomes greater than $125,000. In every region in the state, nearly 18 percent of households had average incomes between $50,000 and $75,000. Only about 16 percent of the region’s residents had incomes below $25,000, while 22 percent had incomes of more than $125,000 (Exhibit 3).
Exhibit 2
Capital Region Population by Race and Ethnicity, 2018
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
Exhibit 3
Capital Region and Texas Household Income Percentile, 2018
Income Level
Capital Region
State Total
less than $25,000
15.8%
21.1%
$25,000 to $50,000
20.3%
23.0%
$50,000 to $75,000
18.1%
17.9%
$75,000 to $125,000
23.7%
20.6%
more than $125,000
22.1%
17.4%
Source: U.S. Census Bureau
Regional Industries
In 2019, the Capital region accounted for about 8.7 percent of the state’s total employment. Exhibit 4 lists the industries with the greatest regional employment concentrations compared to the national average, as measured by location quotient (LQ). LQ represents an industry’s proportionate concentration in the region; an LQ greater than 1.0 means that industry employment is more concentrated in the region than nationally. A high LQ can identify industries that have a competitive advantage in the region, such as the ability to produce products more efficiently and of a higher quality.
Based on location quotients, the Capital region is a leader in computer and electronic product manufacturing; data processing, hosting and related services; and funds, trusts and other financial vehicles.
Exhibit 4
Top 10 Capital Region Industries, 2019
Industry
LQ
Number Employed
Average Annual Wages
Computer and Electronic Product Manufacturing
3.50
28,210
$149,899
Data Processing, Hosting and Related Services
2.86
7,430
$140,647
Funds, Trusts and Other Financial Vehicles
2.67
337
$132,845
Museums, Historical Sites and Similar Institutions
2.19
4,061
$22,095
Administration of Human Resource Programs
2.03
12,183
$66,370
Other Information Services
1.89
6,658
$108,670
Heavy and Civil Engineering Construction
1.84
17,041
$66,440
Motion Picture and Sound Recording Industries
1.74
5,642
$46,985
Administration of Environmental Quality Programs
1.72
4,369
$68,332
Merchant Wholesalers, Durable Goods
1.59
38,055
$114,176
Total - All Industries
0.99
1,098,122
$64,244
Note: Data are as of Q4 2019 except wage data, which are for covered employment in 2018.
Sources: JobsEQ and Bureau of Labor Statistics
U.S. Military Installation Impact
Texas has 14 U.S. military installations within its borders. In 2019, these bases directly employed more than 226,000 and supported nearly 634,000 jobs in all. In all, military installations in Texas contributed an estimated $75.3 billion annually to the state’s gross domestic product (GDP). Army Futures Command, the only military installation within the Capital region, had a positive impact on the Texas economy, supporting an estimated 2,300 jobs and contributing more than $200 million to the state’s GDP in 2019 (Exhibit 5).
Exhibit 5
U.S. Military Impact on Capital Region Estimated 2019
Region
Total Jobs Supported
Contribution to State GDP
Capital
2,342
$0.2 billion
State of Texas
633,892
$75.3 billion
Sources: Texas Comptroller of Public Accounts, Texas Military Preparedness Commission and REMI
From 2009 to 2019, the region’s employment growth exceeded that of the state and nation, at 38.5 percent — the highest of any Texas region. Employment in the Austin-Round Rock-Georgetown MSA rose by more than 39 percent in the same period (Exhibit 6). More than 96 percent of the region’s total jobs are in the Austin-Round Rock-Georgetown MSA.
Exhibit 6
Capital Region Employment Trends, 2019
Area
Number of Jobs (2019)
Actual Change (2009 to 2019)
Percent Change (2009 to 2019)
Austin-Round Rock-Georgetown MSA
1,049,947
296,077
39.30%
Capital Region
1,090,221
302,958
38.50%
Texas
12,531,100
2,284,407
22.3%
United States
147,886,638
17,768,373
13.7%
Note: 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 U.S. Bureau of Labor Statistics
Significant Regional Occupations
The Capital region’s most significant occupations are shown in Exhibits 7 and 8, first by location quotient and second by numeric growth during the last five years.
Exhibit 7
Top Occupations in the Capital Region by Location Quotient,
2014 to 2019
Occupation
Number Employed
Average Annual Wages
LQ
Unemployment Rate
Five-Year Employment Change
Computer Occupations
56,718
$90,900
1.7
1.6%
15,876
Drafters, Engineering Technicians and Mapping Technicians
8,006
$57,900
1.53
2.2%
333
Media and Communication Workers
8,369
$64,800
1.49
1.9%
1,098
Architects, Surveyors and Cartographers
2,378
$85,700
1.46
1.2%
330
Electrical and Electronic Equipment Mechanics, Installers, and Repairers
6,556
$47,300
1.45
2.2%
676
Note: Data are as of Q4 2019 except wage data, which are for covered employment in 2018.
Source: JobsEQ
Exhibit 8
Top Occupations in the Capital Region by Numeric Growth,
2014 to 2019
Occupation
Number Employed
Average Annual Wages
LQ
Unemployment Rate
Five-Year Employment Change
Computer Occupations
56,718
$90,900
1.7
1.6%
15,876
Food and Beverage Serving Workers
68,897
$24,600
1.2
4.7%
14,487
Construction Trades Workers
47,502
$40,700
1.12
4.5%
10,011
Business Operations Specialists
42,359
$74,200
1.06
2.3%
9,397
Information and Record Clerks
48,122
$34,300
1.1
3.3%
7,987
Note: Data are as of Q4 2019 except wage data, which are for covered employment in 2018.
Source: JobsEQ
Education
A strong educational foundation provides a cornerstone for growth and competitiveness in the global economy, offering opportunities for workplace advancement and business expansion.
Wages by Educational Attainment
Post-secondary education delivers a good return on investments of time and tuition. In 2018, Capital region workers with some college or associate degrees and with stable jobs — defined as those employed with the same firm throughout a calendar quarter — earned an average of $4,606 more annually than high school degree, while those with at least a bachelor’s degree earned an average of $22,287 more (Exhibit 9).
Exhibit 9
Average Annual Earnings by Educational Attainment, Capital Region and Texas, 2018
Educational Attainment
Number Employed, Region
Percent of Region
Average Annual Earnings, Region
Number Employed, Texas
Percent of Texas
Average Annual Earnings, Texas
Less than High School
150,223
14.6%
$41,802
2,065,483
17.1%
$42,808
High School or Equivalent, No College
225,543
21.9%
$45,878
2,765,759
22.9%
$52,035
Some College or Associate Degree
283,327
27.5%
$50,484
3,245,675
26.9%
$60,428
Bachelor’s Degree or Advanced Degree
246,365
23.9%
$68,165
2,454,975
20.3%
$95,716
Educational Attainment Unavailable
126,221
12.2%
$22,583
1,544,282
12.8%
$22,087
Total
1,031,680
$48,423
12,076,174
$58,787
Sources: U.S. Census Bureau and JobsEQ
During the 2017-18 school year, 92.2 percent of the Capital region’s class of public high school senior students graduated, higher than the state’s rate of 90 percent (Exhibit 10). The region’s high school graduation rate has risen since the 2009-10 school year and is consistently outperforming the state.
Exhibit 10
Capital Region Public High School Graduation Rates,
2009-10 to 2017-18 School Year
Region
2010
2011
2012
2013
2014
2015
2016
2017
2018
Capital
84.2%
86.0%
88.7%
90.2%
91.2%
92.0%
91.9%
91.6%
92.2%
Texas
84.3%
85.9%
87.7%
88.0%
88.3%
89.0%
89.1%
89.7%
90.0%
Source: Texas Education Agency
Many high school graduates enroll in postsecondary programs, which offer greater job prospects and the possibility of higher wages. Residents of the Capital region enjoy a variety of options for higher educational achievement (Exhibit 11).
Exhibit 11Capital Region Institutions of Higher Education
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
The Capital region’s community college district provided technical and academic coursework for more than 38,000 students in the 2017-18 school year (Exhibit 12).
Exhibit 12
Capital Region Community Colleges Overview, 2017-18 School Year
*The percentage of academic or technical graduates employed in the fourth quarter of the calendar year after graduation and/or enrolled in a Texas two- or four-year institution in the following fall after graduation, as specified.
Source: Texas Higher Education Coordinating Board
The Capital region’s community college district awarded more than 1,900 certificates and associate degrees in health professions in the 2017-18 school year; the next most common awards were for business administration and marketing, general studies and liberal arts (Exhibit 13).
Exhibit 13
Top 10 Certificates and Associate Degree Awards in the
Capital Region Community Colleges, 2017-18 School Year
Certificates and Degrees
Number Awarded
Health Professions and Related Clinical Sciences
1,946
Business, Management, Marketing, and Related Support Services
1,556
Liberal Arts and Sciences, General Studies and Humanities
1,176
Personal and Culinary Services
849
Computer and Information Sciences and Support Services
489
Security and Protective Services
247
Engineering Technologies/Technicians
216
Skilled Precision Production of Leather, Metal or Wood Products
173
Visual and Performing Arts
169
Foreign Languages, Literatures, and Linguistics
134
Source: JobsEQ
Regional Economy
The relative health of the Capital region’s economy can be measured by its sales tax revenue and comparisons with other states on education, population, per capita income and unemployment rate. Together, these data are good indicators of the region’s economic dynamics and competitiveness.
Sales Tax Revenue
Sales taxes are inherently volatile in the short term but when reviewed over time can provide a useful indication of the state’s economic condition.
Sales receipts subject to state sales tax directly attributed to the Capital region trended upward in the past decade (Exhibit 14). The region saw a 104 percent climb since the 2009 recession, and taxable sales from 2019 indicated the trend would accelerate. For 2019, taxable sales in the Capital region approached $44 billion, contributing nearly 7.9 percent to the state’s overall taxable sales. The Austin-Round Rock MSA directly accounted for $42 billion of this total.
Exhibit 14
Capital Region, Taxable Sales, 2007-2019
Year
Revenue Capital Region
2007
23.27 billion dollars
2008
23.43 billion dollars
2009
21.49 billion dollars
2010
22.40 billion dollars
2011
24.12 billion dollars
2012
26.49 billion dollars
2013
28.46 billion dollars
2014
30.61 billion dollars
2015
32.24 billion dollars
2016
34.25 billion dollars
2017
36.25 billion dollars
2018
40.01 billion dollars
2019
43.93 billion dollars
Note: Numbers shown are for reported revenue subject to sales tax and directly attributed to the region.
Source: Texas Comptroller of Public Accounts
In 1997, the U.S., Canada and Mexico jointly released the North American Industry Classification System (NAICS), which classifies all business enterprises for the purpose of collecting, analyzing and publishing economic statistics. A review of two-digit NAICS codes allows for a broad analysis of industry sectors.
The Capital region’s retail trade sector contributes most to taxable sales, with 38.8 percent of the region’s state sales tax contributions in 2019. Two other industries of note were the food services and accommodation and the manufacturing sectors, combining for about 27 percent of the region’s 2019 reported sales tax contributions.
Capital Region vs. the U.S.
Exhibit 15 illustrates how the Capital region compares among other states and the nation on a number of demographic and economic measures. If it were a state, the region would be the 48th-largest state in terms of land area (about the same size as New Jersey) and have the 36th-largest population. It had the 12th highest per capita income in 2018, and the second-highest percent of population with bachelor’s degrees.
Exhibit 15
Capital Region Compared to the U.S.
Measure
Capital Region
Rank if Region
were a State
Texas
State Rank
U.S.
Square Miles
8,575
48
268,597
2
3,531,905
Population, 2019
2,351,549
36
28,995,881
2
328,239,523
Population with at Least a High School Diploma, 2018
89.5%
29
83.2%
49
87.7%
Population with Bachelor’s Degree or Higher, 2018
42.7%
2
29.3%
28
31.5%
Population Under 18 Years, 2018
22.9%
20
25.8%
2
22.4%
Population 65 Years and Above, 2018
11.7%
50
12.6%
48
16.0%
Population Percent Change, 2010 to 2019
28.5%
1
15.3%
2
6.3%
Per Capita Income, 2018
$58,230
12
$50,355
26
$54,446
Unemployment Rate, 2019
2.7%
5
3.5%
27
3.7%
Sources: U.S. Census Bureau, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis.
Capital Regional Summary
The Capital region is a microcosm of the state, both urban and rural, with a vibrant and diverse economy. Travis County, with the city of Austin at its center, is the region’s economic hub.
The region and its 10 counties have many unique economic conditions and challenges. It has a highly educated population with high income and low unemployment.
If it were a state, the Capital region would have the second-highest share of population with at least a bachelor’s degree, behind Massachusetts. The region had a population growth of 28 percent since 2010. About 46 percent of the region’s households had incomes above $75,000 in 2018.
The Capital region’s economy has demonstrated strong, steady and consistent growth. It boasts a large concentration of technology-related industries and, in the last decade, maintained high employment growth with high average wages.
