Even as the region grapples with a cooling job market and rising cost of living, Seattle surged ahead as the fastest-growing economy among U.S. metros. From 2022 to 2023, the city’s gross domestic product (GDP) increased by 6.2%, reaching $487.77 billion, according to data from the U.S. Bureau of Economic Analysis. This impressive growth rate outpaced all other U.S metro areas with populations exceeding 1.5 million, far exceeding the national average of 2.7%.
Houston followed Seattle at 5.4%, with Charlotte (4.7%), San Antonio (4.6%), and both Austin and Orlando (4.5%), trailing behind. Furthermore, Seattle’s per capita GDP soared to $120,592, a figure surpassed only by New York, San Francisco, and San Jose.
Seattle’s tech industry, a contributor to a third of the city’s GDP, generated $130 billion in 2023, a 15.7% increase from the previous year. Industry giants like Microsoft and Amazon continue to anchor this growth. The retail sector was also a significant contributor, rebounding strongly from last year with a 14.1% increase and adding $42.85 billion to the metro’s GDP. The professional and business services sector, encompassing fields like accounting, legal services, and advertising, added $59.18 billion after growing 6.1% over the last year.
Despite these gains, not all sectors shared in the growth. The real estate industry shrank by 0.6% but still added $37.52 billion to Seattle’s economy. The construction sector saw an 8.2% decline, while the mining industry experienced a dramatic 16.7% drop, marking the largest year-over-year decrease among local sectors.
Nationally, GDP growth slowed slightly in the third quarter of 2023, rising at an annualized rate of 2.8%, down from 3% in the previous quarter. Looking ahead, the Congressional Budget Office predicts national growth will slow further, projecting a rate of 2% in 2025 and 1.8% in the years that follow. While the Federal Reserve is anticipated to lower interest rates in early 2025 to counteract these trends, the national economy may still face headwinds.
Locally, Seattle is expected to maintain its economic momentum, though risks remain due to its reliance on major employers, changes in global tech markets and rising costs.
This post was based on information found on Puget Sound Business Journal.
