austin, tx: an economic prospectus

Austin, TX: An Economic Prospectus

CCIM SymposiumGrowing Pains of AustinJanuary 30, 2013

January 30, 2013 | CCIM Symposium: Growing Pains of Austin

Why Choose Austin?

• Unique combination of big city growth rates and feel of small, “weird” university town

• Diversified economy powered by innovation, productivity, and well-developed ecosystem for supporting entrepreneurship

• Region offers great variety in quality of life at relatively affordable prices


19701972

19741976

19781980

19821984

19861988

19901992

19941996

19982000

20022004

20062008

20100%

1%

2%

3%

4%

5%

6%

7%

8%

Population GrowthSource: U.S. Bureau of Economic Analysis

Austin-Round Rock-San Marcos

All U.S. Metro Areas


Fastest Growing Metro AreasSource: U.S. Census Bureau, Population Change, 2001-2011

SeattleCharlotte

Los AngelesSan Antonio

OrlandoAustin

Las VegasNew York

MiamiWashington

PhoenixRiverside

AtlantaDallas

Houston

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000

407,099421,097433,310446,804461,001462,203

509,475539,136

559,345776,054

899,500927,632

972,7011,194,282

1,245,826

Despite being only the 34th largest metropolitan area, Austin ranks 10th in population growth since 2001.

Austin is adding an average of 50,000 people every year since the recession hit in 2007—roughly equivalent to a Cedar Park . . . every year.


Austin: Movers Driving GrowthSource: Internal Revenue Service, 2000-2010 (MSAs only)

Blue: Move to Austin > Move from AustinPink: Move to Austin < Move from Austin

Top 10 Origin Metros(Avg Movers Per Year)

1.Houston (6,700)2.Dallas (6,000)3.San Antonio (4,700)4.Killeen (2,100)5.Los Angeles (1,800)6.Corpus Christi (1,100)7.Chicago (1,000)8.Phoenix (900)9.New York (900)10.San Francisco (800)


CensusTract General Area

Out-of-Staters

% TractPopulation

17.6 Steiner Ranch 1,113 8%

6.01 UT Campus 1,030 11%

17.86 Milwood/Arrowwood 856 17%

215.07 Indian Ridge/Eagle Ridge 785 10%

203.14 2243/183 Leander 754 15%

18.49 North Burnet/Domain 708 13%

Popular NeighborhoodsSource: U.S. Census Bureau, People Moving to Travis & Williamson Counties from Out of State, 2007-2011


Job Growth: Total EmploymentSource: U.S. Bureau of Economic Analysis

19701972

19741976

19781980

19821984

19861988

19901992

19941996

19982000

20022004

20062008

2010-4%

-2%

0%

2%

4%

6%

8%

10%

12% Austin-Round Rock-San Marcos



Economic Growth: GDPSource: U.S. Bureau of Economic Analysis

Metro AreaGDP ≥ $50B

Real GDP2001-10

Real GDP2007-10

Portland 49% 6%Austin 48% 10%San Jose 43% 13%Raleigh 33% 5%Orlando 31% -4%Washington 30% 6%Las Vegas 26% -13%Phoenix 25% -7%

Austin’s growing economy:

$26.6 billion increase in GDP between 2001 and 2010, a 48% growth rate second only to Portland among large metros.

$7.5 billion+ increase in GDP since recession hit in 2007, a 10% growth rate behind only San Jose among large metros.

GDP Per Capita, a proxy used for standard of living, has increased from 97% of U.S. to 104% of U.S.


2001 2002 2003 2004 2005 2006 2007 2008 2009 201080%

85%

90%

95%

100%

105%

Skilled Workforce AvailabilitySource: U.S. Bureau of Economic Analysis, Austin MSA as % of All U.S. Metro Areas (100%)

Paychecks(average earnings per worker)

Productivity(output per worker)

Productivity in Austin grew nearly twice as fast as productivity in all U.S. metropolitan areas between 2001 and 2010.


Manufacturing RenaissanceSource: U.S. Bureau of Economic Analysis, Output Per Worker (2005 dollars)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Austin-Round Rock-San Marcos


Manufacturing (output) in Austin is growing more than four times faster than the Austin economy as a whole. It now makes up approximately 20% of the total metro area economy, up from only 9% in 2001.


Austin: Diversifying EconomySource: U.S. Bureau of Economic Analysis

2001 2011 2001 2010Government 1 1 1 2Retail 2 3 6 7Manufacturing 3 11 4 1Prof, Sci, Tech Services 4 2 N/A 4Health Care, Social Asst 5 4 N/A 9Finance, Insurance 10 7 7 8Real Estate 12 10 3 5

Jobs Rank GDP Rank

Note: Rank based on share of total jobs, GDP.


Innovation & Entrepreneurship

• Corporate anchors

• Infrastructure

• Networks

• Connectors


• Number of households with at least $200K in annual income has doubled since 2000, up to 16,000 as of 2010 in city of Austin

• Inflation-adjusted retail sales in Austin metro area grew by 27% between 2002 and 2011, compared to 22% statewide, 1% Dallas

• Technology sectors (mobile, cloud, analytics) well-positioned for VC investment

Wealth CreationSources, U.S. Census Bureau, Texas Comptroller


Housing AffordabilitySource: Zillow, Median List Price, November 2012

CityPrice Per

Sq. Ft.Most Expensive

NeighborhoodPrice Per

Sq. Ft.

San Francisco $635 Presidio Heights $984

Washington $417 Kalorama $757

Seattle $286 Downtown $715

Denver $210 Country Club $363

Portland $191 Pearl District $350

Austin $141 Downtown $387

Raleigh $107 Wade $218


• Can Austin maintain its cost advantage given the region’s current growth trajectory?

• Will we make the necessary investments in public services, infrastructure (water), and amenities to keep up with growth?

• Is it possible to make the region’s economic development more inclusive?

Key Questions


Middle Income StagnationSource: U.S. Bureau of Economic Analysis, Austin MSA as % of All U.S. Metro Areas (100%)

19691971

19731975

19771979

19811983

19851987

19891991

19931995

19971999

20012003

20052007

20092011

70%

75%

80%

85%

90%

95%

100%

105%

110%

Per capita income

Average earnings per job

71% of Austin metro area’s population growth between 2000 and 2010 occurred in suburban areas, up from 53% between 1990 and 2000.


Source: Center for Neighborhood Technology http://htaindex.cnt.org


• 37% (7.5M) of all new jobs in U.S. expected by 2020 will require postsecondary degree

• 16 out of top 25 fastest growing occupations in U.S. will require postsecondary degree

• 91 out of top 100 highest paying occupations in U.S. require postsecondary degree

Human Capital InvestmentSource: U.S. Bureau of Labor Statistics

Note: Postsecondary here means certificates, associate’s degrees, and up.


Human Capital ROISource: U.S. Bureau of Labor Statistics, Median Wage for U.S. Occupations by Education Required, 2010

Less than high school

High school diploma or equivalent

Postsecondary non-degree award

Master's degree

Associate's degree

Bachelor's degree

Doctoral or professional degree

$0 $20,000 $40,000 $60,000 $80,000 $100,000

$20,070

$34,180

$34,220

$60,240

$61,590

$63,430

$87,500


Austin: The Challenge AheadSource: U.S. Census Bureau, % Population Age 25+ in Austin MSA with Postsecondary Degree, 2011

Asian White Black Hispanic0%

10%

20%

30%

40%

50%

60%

70%

80%73%

50%

33%

21%

% Total Population with Postsecondary Degree

Washington DC 54%San Francisco 51%Raleigh 50%Austin 47%Seattle 46%Denver 46%Portland 42%


Summary

• Austin’s reign atop metro area rankings should continue if we continue to think big, take risks, and invest in economic competitiveness

• Growth pressures will test our commitment to regional thinking—avoiding a zero-sum game mentality will be a critical success factor

• Creating stronger links between education and workforce development is a top priority


@brianjkelsey

http://civicanalytics.com

linkedin.com/in/brianjkelsey

Brian Kelsey, PrincipalCivic Analytics [email protected] 512-731-7851

mailto:[email protected]

austin, tx: an economic prospectus

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