Updated Jul 27, 2023 - Business

Austin is a hot spot for new businesses

New business applications in Texas, 2022
Explore the interactive map. Data: U.S. Census; Map: Kavya Beheraj/Axios

Austin had the highest rate of new business applications among major Texas metros in 2022, per new Census Bureau and IRS data.

  • Some 19 new business applications per 1,000 residents were filed in the Austin-Round Rock metro area — ranking the city 21st nationally.

Why it matters: New business applications are an important measure of an area's perceived economic health. If lots of people are trying to start new companies in a given city, it's a sign that they're bullish on the area's prospects.

Be smart: The Austin metro rate is higher than the national average of 15 applications per 1,000. It also dropped from 2021 by just 1% compared to the 6.6% drop seen nationally.

What they're saying: Austin's regional economy has grown twice as fast as San Antonio and Dallas in the last decade — and three times faster than Atlanta, Columbus and Orlando, officials with economic development initiative Opportunity Austin tell Axios.

  • The city has worked to diversify its economy following the dot-com recession in the early 2000s into other industries like aerospace, defense, electric vehicles and life sciences, they added.
  • That evolution helped the region weather the 2008 and 2020 recessions.

Meanwhile, Dallas and Houston are also seeing higher-than-average application rates.

  • Some rural west Texas counties are also seeing high rates per 1,000 residents, including Loving, Glasscock and Borden.

Between the lines: The word "startup" tends to evoke buzzy Silicon Valley tech ventures. But young companies of all stripes, from stores and restaurants to software and manufacturing firms, play a big economic role.

  • As of 2021, more than 66.7 million Americans worked for companies with fewer than 100 employees, and those companies posted nearly $3.6 trillion in annual payroll, per census data.

The big picture: Just over 5 million new business applications were filed nationwide in 2022, or 15.1 for every 1,000 residents.

  • That's down from 2021, when nearly 5.4 million applications were filed nationwide, or 16.2 for every 1,000 residents.

Zoom out: The Southeastern U.S. is a hotbed of new business activity, home to nine of the top 10 major metro areas with the most new business applications per 1,000 residents last year.

  • Miami/Fort Lauderdale/West Palm Beach (40.9) took the top spot for major metro areas.

Reality check: A filed application is no guarantee of a healthy, thriving business to follow — but at the very least it's a sign of economic optimism.

Editor's note: This story has been updated to include comment from Opportunity Austin.

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