I gave an update on the Austin economy today at the Austin CPA Chapter CFO/Controllers Conference. It was good timing, as last week the U.S. Census Bureau published new data from the 2015 American Community Survey to round out the other usual sources.
My slides are available on the CA website. Here are a few highlights:
- 44 consecutive months of 4.0%+ total nonfarm job growth on a year-over-year basis came to an end in April. So we’ve come out of ludicrous speed and are now cruising at a comfortable ridiculous speed, more or less where we’ve been in non-recession years since 2004. Austin has become so accustomed to this level of growth that we often take it for granted–no other major metro in the country has come close to 44 consecutive months at 4.0% or better.
- Total real personal income in the Austin metro grew 22.5% during 2010-2014, ranking third behind Houston (24.2%) and San Jose (22.5%) among large metros. That’s equivalent to adding $15.6 billion in real income to the regional economy–quite a bit of fuel for our housing market and increasingly pricey foodie scene.
- Austin is attracting and retaining so many well-educated and highly-paid people that we almost have to stop measuring in terms of bachelor’s degrees and start counting the advanced degrees. Austin (city) added nearly 30,000 residents with graduate degrees during 2010-2015, with median earnings of $70,000 per year.
- Austin’s tech sector continues to lead nationally, with total employment growing 31% during 2010-2015, fourth highest among major metros with at least 50,000 tech jobs. Travis County ranked fifth among counties. Mobile, apps, and SaaS companies are driving a significant portion of the growth, with employment in Travis County up 115% during that five-year period (#2 nationally behind SF).
We also touched on the usual three challenges:
- Inclusive economic development. 45% of primary working age (25-64) residents in Austin do not have a completed postsecondary degree. 67% of Black residents and 75% of Hispanic or Latino residents age 25+ do not have a completed postsecondary degree, compared to 22% of Asians and 31% of Whites. Median gross rent for a 2BR in Austin (city) is up to $1,243 per month, exceeding what is considered affordable for the housing budgets of Hispanic or Latino and Black families with median family income, as well as the budget at median earnings for all workers age 25+ who have less than a bachelor’s degree. This is how you become one of the most economically segregated places in the country.
- When will housing costs in the urban core start to erode Austin’s competitive advantage relative to the expensive coastal markets? Affordability–relative to pricey markets with comparable economies–has long been one of Austin’s key selling points. There is still a considerable gap relative to California, but are we approaching a point on the curve where some people will opt for smaller markets with growing tech centers in North Carolina, Tennessee, or Utah?
- Trying to tackle big-city/regional issues with a small-city/local toolkit, and, at times, mindset. $6 billion transit plan in Nashville. Multi-billion dollar investment in Denver approved by voters in eight counties. Meanwhile, we are squabbling about seats on our MPO and protesting $720 million in relatively small-scale upgrades–in one city.
Austin is great at many things, but you would think with all those graduate degrees we’d be able to show more progress on regional collaboration.