Dallas’ economic performance has cooled, according to a closely-followed national ranking that showed the Dallas-Plano-Irving region slipping further behind other metro areas ― including several fast-growing cities in the Southeast.
The new 2026 economic performance report, produced by the California-based think tank the Milken Institute, ranked Dallas-Plano-Irving at number 35 out of more than 200 large American metro areas.
Last year, greater Dallas ranked 19th. In the previous two years it had ranked in the top 10. (In line with Census designations, the analysis divided the broader D-FW metro area into two large metros, Dallas-Plano-Irving and Fort Worth-Arlington-Grapevine.)
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“It’s still doing well overall,” Brock Smith, a researcher at the Milken Institute who worked on the analysis, said of the Dallas economy. “It’s got lots of Fortune 500 companies. It’s still in these high-wage sectors.”
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But in other ways, the analysis showed, Dallas’ economic performance has been lagging, with its ranking dragged down especially by housing affordability and slowing employment growth — data that raises larger questions, at least, about the region’s longer term trajectory.
“I think it’s still a strong economy,” said Smith, who added that the analysis’ short-term metrics often swing dramatically from year to year. “We’ll just have to see.”
Key sectors show signs of wear
The report, released in late January, was mostly based on data from 2024, a year when the overall U.S. GDP grew by around 3% and Texas’ GDP grew by around 4%. That year, the country also added more than 2 million jobs, and Texas added 284,000, the highest overall increase of any state.
Yet in the new report, among large metro areas Dallas placed 106th for “2023-2024 job growth” and 113th for “2023-2024 wage growth” — significantly worse than the metro had fared in those categories a year earlier. In another category, “short-term job growth,” which included data from July 2024 through July 2025, Dallas ranked 127th.
Part of Dallas’ struggles came from the region’s large trade, transportation and utilities sector — a broad segment of the economy that includes retail, warehousing and utilities — which actually shrank compared to a year earlier.
Dallas’ large professional and business services sector, which includes white-collar jobs such as accountants and lawyers, also took a hit, along with its education and health sectors.
“Dallas has done really, really well in concentrating in these high-wage sectors, like professional business services, finance, information,” said Smith. “And those happen to be the sectors that are doing badly nationally right now.”
Greater Dallas has also clearly become more expensive, another factor weighing down its ranking: In the 2025 analysis, Dallas ranked 152nd on housing affordability, and in this year’s analysis it ranked 135th.
“Dallas was benefiting, especially in the 2010s, [from] being a strong economy with way better affordability than these coastal big cities that everyone was moving away from,” said Smith. “It’s still a lot more affordable than some of those cities. But I think that advantage is starting to slip.”
The report also comes as more questions have begun swirling about the broader state of the economy in long-booming Texas and D-FW, which for years has been dramatically transformed by a stream of corporate relocations and a burgeoning new financial sector.
Last month, the Federal Reserve Bank of Dallas projected that in 2025 Texas saw virtually no overall jobs gain — a major departure from its recent history of around 2% annual net employment growth.
“It is a big deal for Texas,” Luis Torres, an economist at the bank who authored the analysis, recently told The News. “It is a low-hiring, low-firing environment.” (The recent downshift has been driven in part by the state’s oil and gas industry, which has been shedding workers amid persistently low prices and geopolitical volatility.)
In November, the most recent month for which data is available, the D-FW Metroplex also saw a decline in payroll employment, according to the Dallas Fed, leading the bank to conclude that the regional economy had “slowed” that month even as unemployment remained flat.
And North Texas, like the country writ large, is also experiencing a “K-shaped economy,” analysts recently told The News, characterized by an increasing divergence between the region’s haves and have nots.
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The K-shaped trend, although likely no more severe locally than the national trend, nevertheless has left numerous Dallasites struggling, and raises still more questions about the future of the region.
“‘Do I keep my lights on? Do I put gas in my car to get to work, or do I feed my family?’” Sarah Burns, vice president of external affairs for the North Texas Food Bank, said recently. “Those are real, everyday choices that a lot of people in the Metroplex are having to make.”
Among large cities, greater Fayetteville, Ark., an affordable area boosted by a strong labor market and growing tech sector, took the top spot in the Milken Institute’s ranking. The rest of the top five included Huntsville, Ala., Charleston, S.C., Boise City, Idaho and Raleigh, N.C.
Fort Worth-Arlington-Grapevine, with relatively strong scores for job growth and wage growth, came in ahead of Dallas at number 27, a slight improvement from its showing the past two years.