#159 – Inside Out Industry – A $100 Billion Wealth Migration Tilts US Economy’s Center of Gravity South
Posted on | Inside Our Industry
Population migration to the Southern and Southeastern United States has been occurring for many years but the acceleration of that movement over that past two years is unprecedented. Following are excerpts from a story from Bloomberg.com. Click the link at the bottom for the full report along with a number of graphs.
A $100 Billion Wealth Migration Tilts US Economy’s Center of Gravity South
Some 2.2 million people moved to the Southeast in just over two years. That’s roughly the population of Houston.
By Michael Sasso and Alexandre Tanzi. June 29, 2023
Drive along the 240-mile stretch of the Atlantic coast from Charleston, South Carolina, through the grassy marsh land of southern Georgia and down into northern Florida, and you’ll see one of the most profound economic shifts in the US today.
Welcome to the New New South.
Electric-vehicle factories and battery plants are overtaking pine forests in this region of antebellum architecture and shrimp and grits. More broadly, the entire South from here, north to Kentucky and west to Texas is where businesses are moving to, jobs are being created and homes are being bought. The uplift isn’t happening equally everywhere, or equally for everyone. But the implications for the entire country are enormous.
The numbers tell the story. For the first time, six fast-growing states in the South — Florida, Texas, Georgia, the Carolinas and Tennessee — are contributing more to the national GDP than the Northeast, with its Washington-New York-Boston corridor, in government figures going back to the 1990s. The switch happened during the pandemic and shows no signs of reverting.
A flood of transplants helped steer about $100 billion in new income to the Southeast in 2020 and 2021 alone, while the Northeast bled out about $60 billion, based on an analysis of recently published Internal Revenue Service data.
The Southeast accounted for more than two-thirds of all job growth across the US since early 2020, almost doubling its pre-pandemic share. And it was home to 10 of the 15 fastest-growing American large cities.
In recent decades, the warmer weather, lower taxes, looser regulation and cheaper housing lured companies and retirees. But this pandemic-era Sun Belt economic upswing is wider in scope.
“You could throw a dart anywhere at a map of the South and hit somewhere booming,” said Mark Vitner, a retired longtime economist for Wells Fargo who now heads his own economic consultancy, Piedmont Crescent Capital, in Charlotte, North Carolina.
Nashville, where the asset-management firm AllianceBernstein relocated a few years ago, has become the country’s top real estate “supernova” in surveys by PricewaterhouseCoopers and the Urban Land Institute. Houston, Atlanta and Charlotte, longtime home of Bank of America Corp., rank among the top 10 moving destinations nationwide by Penske Truck Rental — all ahead of boomtown Austin.
And no one beats Fort Worth, Texas, near Dallas, the country’s fastest-growing big city in the latest Census Bureau data.
“We now have more employees in Texas than New York state. It shouldn’t have been that way,” JPMorgan Chase & Co. CEO Jamie Dimon said to Bloomberg TV on a swing through the South earlier this year.