DATAPOINTS

By

THECAPITALAREA COUNCILOFGOVERNMENTS
www.datapoints.org DECEMBER2012

2012 YEARIN REVIEW

THE KICKSTARTER ECONOMY

TEXAS ECONOMIC RESILENCY

BACKTOTHE FUTUREOF CONSTRUCTION MAKING COMEBACK THINGS

THERISEOF ENERGY

NO VACANCIES

MISMATCH AFFORDABILITY OFTALENT& &MIGRATION OPPORTUNITY

MUSICINTHE METROPOLIS

DATA POINTS 2012: YEAR IN REVIEW The Central Texas economy experienced another solid year of growth in 2012. While much of the country continues to recover from the economic downturn, Central Texas remains ascendant. As the year draws to a close, its time look back at 12 months of Data Points. The following nine items highlight many of the most important economic and demographic issues facing the Austin region. 1. Texas Economic Resiliency Currently, just 18 of the 100 largest metropolitan areas recovered all of the jobs lost during the recession. With six metropolitans area represented on the list, Texas regionsincluding Austincontinue to experience some of the countrys strongest job growth. Back to the Future of Making Things After identifying biotechnology as the hot employment sector as few years ago before embracing data centers as the key to economic success, economic development professionals have now turned to the Next Big Thing, manufacturing. Construction Comeback While construction employment in Central Texas remains significantly below its prerecessionary peak, recent building permit data suggests that the sector is poised for a strong comeback. During this first half of 2012, more than 16,000 building permits were issued in Central Texas, more than much larger regions such as Atlanta and Phoenix. The Rise of Energy The traditional fossil fuel energy sector has roared back to life, fueling job growth and wealth creation throughout the country. Despite the absence of significant natural resources, Central Texas has been able to support a growing oil and gas sector thanks to a talented workforce and its relative proximity to resources elsewhere in the state. The Kickstarter Economy By connecting fledgling entrepreneurs with an audience of potential financiers, crowdfunding websites such as Kickstarter have created new opportunities for innovative individuals. During the first half of 2012, Austin entrepreneurs raised nearly $5 million via the crowdfunding site Kickstarter. No Vacancies With apartment occupancy hitting an extraordinary 95 percent, the real estate market has been rewarding for investors and vexing for renters in the region. Affordability and Migration Despite the continued rise in home prices within the urban core, recently released federal data cast doubt on the common assumption that residents are being priced out of Travis County. Mismatch of Talent & Opportunity During the past five years, highskill job growth in Central Texas has trailed increases in lowskill occupations. Music in the Metropolis Despite its title as the Music Capital of the World, a new database identified Nashville as home to the countrys highest concentration of musicians.

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DATAPOINTS
By

THECAPITALAREA COUNCILOFGOVERNMENTS
www.datapoints.org DATAPOINTS2012ROUNDUP
TexasEconomicResiliency The economic success of Texas during the past five years has been nothing short of extraordinary. Only 18 of the 100 largest metropolitan areas have recovered all job lost during the recession. Notably, all six major metropolitan areas in Texas including the Austin metropolitan regionbelong to this rather exclusive club. Furthermore, only five metropolitan areas in the country have increased their employment by 4 percent above their prerecession peaks. All five are in TexasAustin, Houston, San Antonio, El Paso, and Dallas. All of which suggests that the socalled Texas Miracle isnt all that miraculous. Its math. BacktotheFutureofEconomicDevelopment Manufacturing has been once again embraced by economic development professionals. The renewed focus on manufacturing is based on several encouraging trends. After decades of job losses, manufacturing employment has become more globally competitive; in the past year alone, domestic manufactures have added 200,000 workers. Manufacturing job gains have extended to Central Texas. Although manufacturers have shed more than 25,000 jobs in the region since 2000, there have been recent signs of renewal. During the past year, manufacturers in Central Texas have added more than 1,000 workers. While such gains may pale in comparison to other employment sectors, the extremely high wages of Manufacturing workers produce an outsize economic impact on Central Texas. Within the region, the average wage for a typical manufacturing worker is approximately $84,000, nearly three times higher than the wage of a typical retail worker. ConstructionsComeback Housing is back. Or at least it soon will be in Austin. Although the region largely escaped the worst excesses of the housing bubble and the subsequent real estate crash, the relative stability of home prices in the Austin region helped obscure a significant decline in new home construction. Recent data from the U.S. Census Bureau, however, suggests that home construction is poised for a significant rebound. More than 16,000 home permits were issued in the Austin metropolitan area during the first six months of 2012, more than such larger regions as Los Angeles and Miami. The upswing in home permits should help fuel a recovery of the construction sector within the Austin region in the year ahead. EMPLOYMENTPERFORMANCEOF100LARGESTMETROS

DECEMBER2012

EMPLOYMENT SURPASSED PRERECESSIONARY PEAK EMPLOYMENT BELOW PRE-RECESSIONARY PEAK Source:U.S.CensusBureau

AUSTINMANUFACTURINGVALUECREATION
$15,000 $12,000 $9,000 $6,000 $3,000 $0
MANUFACTURINGGROSSREGIONALPRODUCT(MILLIONSOFCURRENT DOLLARS)

01020304050607080910
Source:BureauofEconomicAnalysis

BUILDINGPERMITSISSUEDYEARTODATE 2012 40K 30K 20K 10K K 36K 29K 22K 18K 16K 15K 14K 13K 12K 11K

Source:Source:U.S.CensusBureau

DATAPOINTS
By

THECAPITALAREA COUNCILOFGOVERNMENTS
www.datapoints.org DATAPOINTS2012ROUNDUP
TheRiseofEnergy Despite the absence of significant natural resources, Central Texas has successfully captured a growing piece of the states hundredbillion dollar energy sector. Thanks to the regions storied quality of life and wealth of engineering talent, energy companies located in Central Texas have access to both highly skilled workers as well as relative proximity to their operations elsewhere in the state, including the Eagle Ford shale. The marriage of human and natural resources in Central Texas has generated both jobs and tremendous enormous wealth in the region. Since 2003, direct employment in Central Texas oil and gas extraction sector has soared 400 percent, jumping to 1,600 workers. The average worker directly employed in the region oil and gas sector in Central Texas earns an average annual salary of $244,000, supporting a direct payroll of more than $400 million. CENTRALTEXASOIL&GASEXTRACTIONEMPLOYMENT 2,000 1,500 1,000 500 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source:BureauofLaborStatistics

DECEMBER2012

SUCCESSFULAUSTINKICKSTARTERPROJECTS,2012 125

AustinsKickstarter Economy During the first half of 2012, Austin entrepreneurs raised nearly $5 million via the crowdfunding site Kickstarter. By connecting fledgling entrepreneurs with an audience of potential financiers, websites such as Kickstarter and IndieGoGo have leveraged crowdfunding to spur hundreds of millions of dollars in investment throughout the country, including $2.5 million in Austin this year alone. Within Austin, Kickstarter has been especially popular as an alternative source of funding for the arts and media; more than 60 percent of all successfully funded efforts in Austin this year have involved music or film projects. Other popular categories within Austin include art projects (25 proposals), publishing (28 proposals), and games (16 proposals).

100 75 50 25 0

Source:Kickstarter

AUSTINMSARENT&OCCUPANCYRATES
OCCUPANYRATEPRICEPERSQUAREFOOT

100% NoVacancies While the strong real estate market in Central Texas has been a boon for investors, renters in the region are increasingly squeezed by rising prices. At the beginning of 2012, apartments occupancy rates in the region hit an extraordinary 95 percent. Unsurprisingly, extremely low vacancy rates have put significant upward pressure on rents. The average price per square of an apartment today is $1.05, a steep jump from two years ago, when the figure was just $.91 cents. Until supply catches up with demand, apartment dwellers will continue to be burdened by higher rents. 80% 60% 40% 20% 0% 02 03 04 05 06 07 08
TOTAL POPULATION AGE25+

TOTAL POPULATION AGE25+ WHOMOVED FROMA DIFFERENT STATE WITHINTHE PASTYEAR

$1.25 $1.00 $0.75 $0.50 $0.25 $0.00

09

10

11

Source:AustinInvestorInterests

DATAPOINTS
By

THECAPITALAREA COUNCILOFGOVERNMENTS
www.datapoints.org DATAPOINTS2012ROUNDUP
Affordability&Migration The specter of rising home costs, especially within Travis County, has led many observers to fear that residents are increasingly forced to flee central Austin in favor of outlying counties in Central Texas. Although such thinking may make intuitive sense, government statistics suggest that the reality is far more complicated. Proportionally, however, residents of Travis County are less likely to move to neighboring counties within the Austin metropolitan region than residents of Bastrop, Caldwell, Hays, and Williamson County. At the very least, recent released data presents a serious challenge to prevailing understandings of the relationship between affordability and migration. AUSTINMSAINTERNALMIGRATIONDYNAMICS
PROPORTIONOFRESIDENTSANNUALLYMOVINGFROMHOMECOUNTYTO ANOTHERCOUNTYWITHINTHEAUSTINMSA(20062010)

DECEMBER2012

5% 4% 3% 2% 1% 0%
BASTROP CALDWELL HAYS TRAVIS WILLIAMSON Source:U.S.CensusBureau

WORKFORCEGROWTHVERSUSJOBGROWTH(SINCE2006) MismatchofTalent&Opportunity 20% As one of the countrys premiere talent magnets, Central Texas remains a deeply compelling place for recent college graduates hungry for economic opportunity. During the past five years, however, the number of Central Texas residents with a bachelor degree has increased 60 percent more than the number of jobs at corresponding skill levels. While the economy of Central Texas continues to outperform the national economy, quantitative job growth must be matched by qualitative job growthwe must not only create jobs, but good jobs. 15% 10% 5% 0% GrowthofHighSkillJobs GrowthofHighSkill Population
Source:U.S.PatentOffice

MusicintheMetropolis According to a remarkable new artist location database released by The Echo Nest, Nashville is home to the highest number of musicians on a per capita basis. Yes, Music City topped the Live Music Capital of the World (as did San Francisco and Los Angeles). Still, the Central Texas hasnt lost its music mojo. Data from The Echo Nest it represents a single, imprecise metric. Austins ability to support worldclass events such as Austin City Limits and SXSW, for example, cant be captured by any database. Additionally, the true breadth of a regions music talent isnt readily quantifiable. While Nashville may have a higher proportion of musicians, it lacks much of the diversity that characterizes Austins music scene.

*Amongmetroswithatleast1millionresidents

MOSTMUSICALMETROPOLITANAREASINAMERICA
MUSICARTISTSPER10,000RESIDENTS Nashville,Tennessee SanFrancisco,California LosAngeles,California Austin,Texas Bloomington,Indiana Lawrence,Kansas Athens,Georgia PalmBay,Florida Portland,Oregon Gainesville,Florida

Source:Source:U.S.CensusBureau