When Prasant Pallikandi wanted to open the U.S. branch of his brand communication firm in Boston, his first step was sizing up the competition. The results were disheartening: for every 15 companies Pallikandi identified to target as potential clients, he counted one established branding firm he’d have to edge out. “It was a little overwhelming to say the least,” he says. “Being a startup and having to compete with these guys—I was like, how am I going to do that?”
He looked for a city that would give him better odds. When he crunched the numbers, Houston, with its booming energy sector, medical tech firms, and on-fire economy, came out on top. So two years ago, 26-year-old Pallikandi and his wife, Badiana, relocated to Houston, where they now helm the U.S. arm of Ganancia360, the Indian communications firm Pallikandi joined six years ago. So far Ganancia360 has worked with Houston-based energy companies, a handful of tech startups, and one cloud-based technology firm; Pallikandi is now trying hard to crack into med technology next. He has no regrets about trading cities. “There was so much more room to grow,” he says.
Thanks in large part to the boom in horizontal drilling and fracking, which has helped the Houston metro area add a whopping 667,800 new jobs since 2005, the energy city is an economic powerhouse: its 4.5% year-over-year job growth rate is the nation’s fastest. Jobs at major corporations like ConocoPhillips and Halliburton help boost the median annual pay for college-educated workers to $71,900, fourth among America’s 100 largest metro areas. Add to that an economy that grew at a 3.52% clip last year alone, and Houston lands the No. 1 spot on Forbes’ annual list of America’s Fastest-Growing Cities.
Behind the Numbers
To compile this year’s list, we started with America’s 100 most populous Metropolitan Statistical Areas (cities and their surrounding suburbs, as defined by the U.S. Office of Management and Budget), ranking these places on six metrics. Using data from Moody’s Analytics, we considered estimated population growth for 2014 and 2015, year-over-year job growth for 2014, and 2014 gross metro product growth (in other words, the metro area’s economic growth rate). We also considered federal unemployment data. Finally, we factored in median annual pay for college-educated workers in each area, using data from Payscale.com. The result is a list of the 20 fastest-growing metro areas in America in terms of local population and economy.
Texas placed five cites on the list, the most of any state: after Houston, the top 3 of our list is rounded out by Austin and Dallas, followed by Fort Worth (No. 8) and San Antonio (No. 10), to give Texas half the cities in the top 10, propelled by strong population growth and unemployment levels under 5%.
Given that Texas’ oil output has more than doubled in the past three years, it’s not surprising that Houston, the center of the energy boom, tops this year’s list of America’s Fastest-Growing Cities. The metro area is expected to add 63,000 jobs in 2015, according to the Greater Houston Partnership. Since 2009 the area has welcomed some 1,500 corporate relocations or expansions—and that’s just counting those that created 50 or more jobs, leased 20,000 or more square feet of office space, or invested $1 million or more in capital improvements. Among the most recent: Valero Energy’s $805.9 million investment in new oil processing capacity at its Houston ship channel location (12 new jobs), FMC Technologies’ $316 million new campus (680 new jobs), and Mattress Firm’s $28 million expansion at its current facility (250 new jobs).