Why Big D is outpacing the Bayou City economically

The downturn in Texas is definitely not the story of Dallas, where the economic growth rate over the past year has rocketed ahead of Houston's.

In fact, Dallas is doing better than the nation's 11 biggest metropolitan areas, at least where employment is concerned. It posted 3.3 percent year-over-year job growth in October, beating everyone from Atlanta on down to Houston, where employment grew only 0.4 percent over the same period.

In addition, Dallas is gaining on Houston in population, and it maintains an unemployment rate of 3.6 percent, while Houston's has crept up to 5.1 percent.

So how is Dallas doing so well while Houston languishes? It's not as dependent on oil. And this asymmetry between the cities is a longstanding feature of Texas' urban economy. And it's even considered a strength.

The theory was developed by none other than Bill Gilmer, the oft-quoted economist at the University of Houston's Bauer School of Business. Before he was the Bayou City's chief prognosticator, he worked at the Dallas Federal Reserve, where he observed the development of something he called the "Texas Triangle": Houston, San Antonio, and Dallas, big cities connected by big highways, with Austin stuck in the middle.

The key to the Texas Triangle is that each of the four cities developed complementary strengths.

Houston is the state's biggest port and oil capital, San Antonio is a hub for military activity and the trade that exploded under NAFTA, and Austin is the locus of state government as well as tech and academic activity.

When taken together, their industry composition doesn't significantly differ from other urban megalopolises like New York and Los Angeles.

Dallas, by contrast, has few distinguishing characteristics.

Out of all of Texas' big cities, it's the most reflective of the U.S. economy overall, not overly dependent on the ups and downs of technology, trade, or energy. The oil and gas sector directly accounts for only 8 percent of its jobs. That's the biggest reason why it's surged ahead of the rest of the state: The national economy is doing fairly well. Therefore, so is Dallas-Fort Worth.

"A strengthening economy is really providing a boost to DFW, giving us an advantage over state economic performance this year," Amy Jordan, assistant economist with the Dallas Fed, said at a conference in November.

A lot of that growth has come from well-paid jobs in the business and financial services sectors: Banking, lawyering, consulting, etc. JPMorgan Chase, for example, has 12,000 employees in Dallas - the most of any city outside its headquarters in New York. It's also attractive to many kinds of business headquarters because of its central location and easy access to cheap office space. Cinepolis, a large chain of movie theaters, moved its U.S. headquarters there from California in July, citing a need for a larger footprint and the desire to expand to the East Coast.

Of course, that means that if the U.S. economy tanks, then it's more likely to take Dallas down with it, by which time Houston may have emerged from its oily malaise - and the cycle will begin again.