Austin, Texas: State of the Economy

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Brian Kelsey, Principal Civic Analytics LLC civicanalytics.com @civicanalytics Austin, TX: State of the Economy October 2015

Transcript of Austin, Texas: State of the Economy

Page 1: Austin, Texas: State of the Economy

Brian Kelsey, PrincipalCivic Analytics LLCcivicanalytics.com@civicanalytics

Austin, TX: State of the EconomyOctober 2015

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Presentation Topics

• Review latest available indicators for Austin & regional economy.

• Big splash from Kauffman on the state of entrepreneurship & tech driven growth in Austin.

• Inclusive economic development.

• Blame California Florida?

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Economic growth in Austin outpacing most other leading metros – 3x faster than U.S. since 2009

20022003

20042005

20062007

20082009

20102011

20122013

2014-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%2014 2009-14

San Jose 5.8% 30.0%

Austin 5.6% 28.5%

Nashville 3.6% 19.0%

Charlotte 2.3% 16.5%

San Francisco 4.4% 14.5%

Seattle 3.3% 13.9%

Denver 4.4% 13.4%

Salt Lake City 1.8% 11.8%

Portland 3.7% 10.6%

Raleigh-Durh 2.2% 9.7%

Orlando 3.6% 5.4%

U.S. Metro 2.0% 9.8%

Real Annual GDP Growth (2014 Dollars)

Austin

U.S. Metro Portion

Source: U.S. Bureau of Economic Analysis. Data is for Metropolitan Statistical Areas (MSAs).

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182,700 net new jobs created in Austin since the recession ended – ~3x faster than U.S. growth

2013 Aug

2013 Oct

2013 Dec

2014 Feb

2014 Apr

2014 Jun

2014 Aug

2014 Oct

2014 Dec

2015 Feb

2015 Apr

2015 Jun

2015 Aug0.0

1.0

2.0

3.0

4.0

5.0

6.0Job Growth, 12-Month % Change

Source: U.S. Bureau of Labor Statistics (CES). Total nonfarm employment, seasonally adjusted. 2015 is YTD, January-August (p). 2009-15 is June 2009 to August 2015 (p).

2015 2009-15

Austin 2.5% 23.8%

San Jose 2.7% 22.8%

Nashville 2.0% 21.2%

Orlando 2.5% 16.6%

Salt Lake City 2.5% 15.7%

Denver 0.7% 15.7%

Seattle 2.0% 14.3%

Portland 2.2% 14.2%

Raleigh-Durh 1.2% 12.7%

U.S. 1.0% 8.6%

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Austin economy is partying like it’s 1999

• Unemployment rate in Austin (city) was 2.8% in Aug—lowest period of unemployment since dot-com era.

• Sales at Austin (city) businesses up nearly 5% in 2014 compared to ‘13.

• Real average wages in Austin MSA increased by 1.6% in 2014 and are finally nearly back to pre-dot-com bust level (> $54,000/yr).

Sources: (1) Bureau of Labor Statistics (LAUS). Not seasonally adjusted. Data is for portion of Austin in Travis County. (2) Texas Comptroller. Gross sales, adjusted for inflation. (3) Bureau of Labor Statistics (QCEW). All industries, adjusted for inflation.

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Austin is among fastest growing tech markets in U.S.

Tech Jobs % Tech 2013-14Raleigh 57,838 9.5% 9.4%Durham-Chapel Hill 32,920 10.4% 7.2%San Jose 294,848 27.0% 6.4%San Francisco 236,525 9.7% 5.7%Austin 108,310 11.1% 5.3%Boston 266,409 9.6% 4.0%Seattle 175,670 8.6% 3.8%Salt Lake City 43,686 6.1% 2.6%Dallas 207,012 5.8% 2.2%Washington DC 295,106 8.8% -2.4%Nation 6,736,083 4.4% 2.6%

Dallas

Durham-Chapel Hill

Boston

San Jose

Washington DC

Austin

Raleigh

San Francisco

Salt Lake City

Seattle

5.0%

6.0%

8.5%

8.9%

9.9%

11.0%

11.4%

14.8%

15.5%

16.0%Projected Job Growth, ‘14-’20

Source: EMSI, 2014. Includes self-employment. Published in ATC Tech Talent Study: http://austintechnologycouncil.org/atc-shares-preliminary-findings-of-tech-talent-study.

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Austin would still have at least 1,000 “core” tech job openings per year even if every student was hired

• 108,310 total jobs in tech sector• 67,546 jobs in “core” tech talent

occupations w/ in-demand skills• ~2,500 to 3,500 job openings in

core tech talent occupations are expected per year in Austin for 2014-2024 time period*

• ~1,500 degrees and certificates in core related programs awarded by Austin area schools annually

How are we defining “tech”?

ATC generally follows the methodology used by TECNA/CompTIA/TechAmerica for their annual Cyberstates report.* It currently includes 49 industries.

Austin’s largest tech sectors ranked by minimum of $1 billion contribution to regional gross domestic product:

#1 Computer & Peripheral Equipment#2 IT Services & Applications#3 Internet & Telecommunications#4 Semiconductors#5 Software

Source: EMSI, 2014. Jobs include self-employment. *Job postings are unique, de-duplicated average monthly openings advertised online during March 2014-March 2015 and include job openings at tech and non-tech businesses (i.e. total demand for core technical workers). http://austintechnologycouncil.org/atc-shares-preliminary-findings-of-tech-talent-study

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9http://startup-ecosystem.compass.co/ser2015/

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Austin was fastest growing (%) large metro (1M+) and city (500K+) in U.S. from July ‘13 to July ‘14

Source: U.S. Census Bureau, Population Estimates.

CityPopulation

07/01/14Change

2013-14Growth

2013-14New York 8,491,079 52,700 0.6%Los Angeles 3,928,864 30,924 0.8%Chicago 2,722,389 82 0.0%Houston 2,239,558 35,752 1.6%Philadelphia 1,560,297 4,245 0.3%Phoenix 1,537,058 24,616 1.6%San Antonio 1,436,697 24,931 1.8%San Diego 1,381,069 21,225 1.6%Dallas 1,281,047 20,322 1.6%San Jose 1,015,785 11,964 1.2%Austin 912,791 25,667 2.9%

MetroPopulation

07/01/14Change

2013-14Growth

2013-14New York 20,092,883 90,797 0.5%Los Angeles 13,262,220 86,371 0.7%Chicago 9,554,598 9,802 0.1%Dallas 6,954,330 131,217 1.9%Houston 6,490,180 156,371 2.5%Philadelphia 6,051,170 14,942 0.2%Washington 6,033,737 66,561 1.1%Miami 5,929,819 66,361 1.1%Atlanta 5,614,323 88,891 1.6%Boston 4,732,161 34,112 0.7%Austin (#35) 1,943,299 57,496 3.0%

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Blame California Florida: Wealthiest movers from Bay Area/Silicon Valley, but FL leads donor states

Source: Internal Revenue Service, SOI Tax Stats.

To TravisOrigin State

Households(Tax Returns)

2011-2014

People(Exemptions)

2011-2014

Average Income(AGI Per Return)

2011-2014Florida 30,236 47,047 $55,275California 15,602 30,135 $81,059Georgia 10,097 18,745 $27,446New York 9,595 15,728 $53,557Illinois 4,698 8,478 $56,407North Carolina 3,541 7,994 $41,286Arizona 3,430 7,704 $47,763New Jersey 4,137 7,526 $45,281Michigan 4,034 6,943 $27,611Pennsylvania 3,521 6,008 $36,872Tennessee 2,824 5,644 $32,388

To TravisOrigin County

People(Exemptions)

2013-2014Williamson, TX 14,332Miami-Dade, FL 6,466Harris, TX 6,060Los Angeles, CA 5,679Dallas, TX 3,788Maricopa, AZ 3,728Broward, FL 3,675Hays, TX 3,577Cook, IL 3,349Bexar, TX 2,867Wayne, MI 2,865

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EmployeesRespondents

Number*DifficultyAverage

ConfidenceAverage

1 to 10 19 3.1 2.8

11 to 50 15 3.5 2.5

51 to 125 7 3.6 2.4

126 to 500 6 2.5 2.8

501+ 3 2.3 3.7

Total (Ans) 50 3.1 2.7

Source: ATC Tech Talent Employer Survey. Second-stage firms have reached a growth stage of $1M to $50M in receipts and 10 to 100 employees. For more on second-stage company research see Edward Lowe Foundation at http://edwardlowe.org/who-we-serve/secondstage. *Complete responses only (n = 50). Differences not statistically significant.

1 = Not difficult2 = Somewhat difficult3 = Difficult4 = Very difficult5 = Extremely difficult

1 = Not confident2 = Somewhat confident3 = Confident4 = Very confident5 = Extremely confident0 = I don’t know

Overall, how difficult is it to find qualified people to fill job openings at your company in Austin?

How confident are you that Austin will be able to meet your future workforce demand?

“New” Austin presents opportunities & challenges

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< High School

High School

Some College/Associate's

Bachelor's +

$38,064

$47,265

$57,357

$92,826

Black

Hispanic/Latino

White

Asian

$38,475

$40,080

$59,994

$72,495

Inclusive prosperity—ensuring as many as possible able to participate in growing economy—is critical

Average Annual Earnings in Travis County for Workers Age 25+ (2013)

Source: U.S. Census Bureau, Longitudinal Employer-Household Dynamics (LEHD), QWI, ACS 2014. See earnings definition on Slide 14. Average rent for 1 BR apartment was between $1,000 and $1,050 as of Oct 2015 according to various reports (Mark Sprague, Independence Title). Affordability calculated as maximum 30% total income spent on housing costs. Race categories are Race Alone using Census definition. Hispanic/Latino is Any Race.

$41,880 income needed to afford average 1 BR apt in Travis County.

48% residents age 25-64 do not have completed postsecondary degree.

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19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

Some perspective: Austin, TX | Raleigh, NC

Average Annual Earnings for Workers Age 25+ with Bachelor’s Degree +

Wake County (Raleigh, NC)

Travis County (Austin, TX)

Source: Census, LEHD (QWI), ACS 2014. Annual earnings is calculated by averaging quarterly earnings. Earnings include gross wages/salaries, bonuses, stock options, tips, and other gratuities, and the value of meals and lodging. Earnings do not include Old Age Survivor and Disability Insurance, health insurance, workers compensation, unemployment insurance, private pensions, and welfare funds. *Adjusted for inflation (2013 Dollars).

2013 Travis Wake

< High School $38,064 $36,036

High School $47,265 $42,507

SC/Associate's $57,357 $50,292

Bachelor's + $92,826 $77,982

2009-2013* Travis Wake

< High School 7.0% 3.0%

High School 3.9% 0.5%

SC/Associate's 2.3% -0.1%

Bachelor's + 4.3% -0.4%

1996-2013* Travis Wake

< High School 23.6% 18.3%

High School 21.8% 14.5%

SC/Associate's 23.2% 13.7%

Bachelor's + 35.0% 17.4%

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7600 Burnet Road, Suite 108Austin, Texas 78757

@civicanalyticshttp://civicanalytics.com