Ong-ad Nuseewor via iStockPhoto
Weather isn’t the only thing that’s hot in the Sunbelt – so are the job markets in rapidly growing cities like Austin and Nashville. The cities are often comparable regarding their presence in the business world, but Austin recently has come to be known as ‘the hottest market in the country’ due to the influx of people and businesses during the COVID-19 pandemic. But some recent changes may be cause for re-evaluating the business scene in each city: where is it still booming and where is the dust settling, or even blowing away?
For instance, Nashville was one of the seven cities chosen as a notable growing economy in the U.S Chamber of Commerce’s State of American Business 2025, while Austin did not make the list. Examining 12 different economic indicators, the report highlights key statistics for each of the cities selected, and points to Nashville’s labor force, vibrant culture, and growing population as economic boons for the area.
Overview: Housing and Population Growth
The number of building permit approvals for housing units can be interpreted as a marker for housing demand and predict the desirability of living in a certain location. Builders apply for these permits, which must be authorized before they can build private housing units. The fluctuations in the number of housing permits in Nashville and Austin often mirror each other, with Austin typically having a larger number of housing permits authorized per month. So far, in 2025, the number of private housing units authorized in Austin exceeds that of Nashville; however, Nashville had more permits authorized in June and August. This is the first time Nashville’s private housing authorizations have exceeded Austin’s twice in one year in the past 10 years. These variations show a notable new shift in the pattern of authorizations, yet it is too early to predict what it may signal. Future data will help shape a more comprehensive picture of population and housing trajectories in these locations.
Similar shifts can be seen in population growth rates for both cities. Nashville and Austin experienced a significant decline in growth rates since 2018; Austin’s population increased 2.79% from 2021 to 2022, while Nashville’s population only increased 1.73% in that same time period. Yet, from 2024 to 2025, Austin’s population growth was 1.07% lower than in 2021-2022, while Nashville’s population growth only decreased by 0.45%. These statistics demonstrate that Austin’s population growth has dropped more than double Nashville’s in the past 3 years. This could indicate a change in future population growth trends and give Nashville the opportunity to surpass Austin in population growth.
Job Opportunities
Another perhaps more significant indicator for the future growth of both cities is their status in the business world. Checkr analyzed the best cities for job opportunities and highest earnings in 2025, with Nashville earning second place and Austin ranking third. The article reiterated Nashville’s continued prominence in entertainment and healthcare industries, and, promisingly, the strong environment for start-ups and potential for the attraction of young professionals. These factors indicate that Nashville has a healthy economy that has a lot of future potential. Austin, on the other hand, recently faced tech industry slowdowns, yet still boasts a rapidly growing job market and fosters innovation by supporting entrepreneurship and attracting young professionals.
Top Industries
Currently, according to ATX Today, the top key industries in Austin are financial services, advanced manufacturing, and clean technology. According to NASH Today, Nashville’s top industries are healthcare, music and entertainment, advanced manufacturing, and tourism and hospitality. In the Bureau of Labor Statistics’ employment predictions, from 2024 to 2034, “healthcare and social assistance” is predicted to be the fastest growing industry sector, with AI and related services ranking second. With Nashville’s most prominent industry being healthcare, this will likely lead to significant economic growth.
Economic Growth
In the Milken Institute’s report on economic growth in U.S. cities, Austin ranks sixth, falling from first place in 2024. Nashville ranks 20th, a significant decrease from its prior ranking of 6th place. The report examines metrics from three main categories: labor market performance, high-tech impact, and access to economic opportunities.
In October 2024, USA Today published an analysis of the best U.S. cities to start a business in, Austin ranked number one, primarily due to its percentage of employment in startups and GDP growth. Nashville came in third overall, performing well in categories such as low unemployment rates and percentage of households with self-employment income.
Both cities boast headquarters or major offices for prominent Fortune 500 companies, as well as other large businesses. There are five Fortune 500 companies in the Nashville region, and three Fortune 500 companies currently have headquarters in or near Austin. Additionally, Oracle, one of the three Fortune 500 companies headquartered near Austin, announced they are moving their headquarters to Nashville, a project estimated to be complete in 2030. This will mark a shift in the job market and economic prosperity of both cities, benefiting Nashville and harming Austin.
Conclusion
Overall, Austin and Nashville are head-to-head in many categories, with Austin outperforming Nashville in some key areas, yet Nashville’s promise and future growth is evident. When looking solely at factors such as population and GDP, Austin undoubtedly outperforms Nashville, yet Nashville appears to be equipped with advantages that could lead them to surpass Austin in the business world. Based on current data, business in Nashville could be igniting and leaving Austin in a cloud of smoke.
