Oct 20, 2022 - News

Denver has the sixth-fastest-growing economy in the U.S.

Data: Kenan Institute of Private Enterprise, "The American Growth Project"; Table: Alayna Alvarez/Axios

The Mile High City is in the midst of a growth spurt.

Driving the news: Denver was named the sixth-fastest-growing city in the country, according to a new analysis from the Kenan Institute of Private Enterprise, a nonpartisan think tank at the University of North Carolina- Chapel Hill.

  • The institute projects Denver's gross domestic product — a measure of the total value of goods and services produced — at 3% as of October.

Why it matters: The findings validate other data points that paint Denver as an increasingly desirable destination for outsiders.

How it works: The report, called "The American Growth Project," analyzes economic conditions among the nation's 50 largest cities.

  • The goal, researchers say, is to provide local policymakers an up-to-date snapshot of which cities are driving U.S. growth and which are falling behind.

What they found: Two main factors are fueling Denver's growth, researchers say.

  • Denver has become a magnet for professionals working from home amid a nationwide migration away from more densely urban areas.
  • But "a less-discussed aspect" of the population boom is the area's retention of its natives and young workers, the report states. About 70% of millennials who lived in Denver at age 16 decided to stay or return by age 26, according to research from the U.S. Census Bureau.

Of note: Software and financial services are among Denver's fastest-growing industries, according to the report. The area's aerospace, digital communications and food and beverage sectors are also expanding.

Yes, but: Should the U.S. economy experience a significant slowdown next year, researchers say the rankings could change — particularly if tech, tourism and manufacturing are hard hit.

The big picture: The San Francisco Bay Area — where the cost of living remains high — ranked No. 1 in the report. But analysts say recent hiring freezes and layoffs, combined with the region's declining housing market, may foreshadow a fall from the top spot.

  • Other fastest-growing metros include: Austin, Texas (2); Seattle (3); Raleigh and Durham, North Carolina (4); and Dallas (5).
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