The headline in the Statesman's business section this morning read: "Area job market is tightest in 6 years." The seasonally adjusted job growth rate in August was 4.1% The Austin area's unemployment rate was 3.5%How many 5 county markets in the U.S. can say that right now? Other area are losing jobs and Austin is adding like crazy.
The last time things were close to this was back in the dot com run-up in 1999 and 2000. The jobless rate was an insane 2% back then. Employers were offering large signing bonuses as well as other incentives. So just what is going on here?
Austin is a great place to live. We have the most interesting topography in the state with great rivers and lakes. We have a very highly educated work force. We generally have great weather. For an MSA with just over 1.5 million people, there is a lot to do here in terms of music, hiking, biking, museums, etc. We have an excellent university in U.T. that cranks out people businesses want to hire. We are a very creative and progressive city in which entrepreneurs thrive. The economy is red hot. The cost of living, although high for Texas, is low compared to much of the country. We have a fabulous quality of life.
Who's adding jobs here? In 2006, announcements were made for many jobs: Advanced Micro Devices would add 300, Dell would add 500, Dimensional Fund Advisors would add 800, Samsung would add 900, HP would add 280 and the list goes on. Announcements so far in 2007 include Airborn adding 300, Apple Computer adding 100, Blizzard Entertainment adding 500, Education Finance Partners adding 280, PayPal adding 300, PRC adding 450 and the list goes on...
Major non-tech employers in Austin include Seton Healthcare Network with 7,500, St. David's Healthcare with 5,700, AT&T with 5,200, Girling Health Care with 1,900, Temple-Inland with 1,500, Progressive Insurance with 1,500, State Farm with 1,400, Hospira with 1,400, PPD Development with 1,300. Of course this list doesn't include the state of Texas and local school districts.
Major employers in Austin in the tech sector include Dell with 17,000 employees, IBM with 6,200, Freescale with 5,500, Solectron with 3,000, Applied Materials with 2,500, Advanced Micro Devices with 2,300, National Instruments with just under 2,300 and the list goes on...
Austin's semiconductor businesses include Advanced Micro Devices with over 2,700 employees, Freescale Semiconductors with 5,400, Applied Materials with 2,500, IBM with 6,200, Samsung with 1,676, Solectron Texas with 3,000, Spansion with 1,200 and the list goes on.
The latest big announcements in the tech sector: Samsung announced that it's largest U.S. chip manufacturing facility will be in Austin and will add 1,000 jobs. The total investment in Austin is expected to be #4.5 to $4 billion. AMD is building its latest campus on 60 acres in southwest Austin. After being here for 25 years, this looks like a commitment to stay for a long time. Freescale spun off of Motorola in 2004 and since has created around 6,000 jobs in Austin.
Austin's software businesses include IBM, National Instruments, Activant Solutions, Blizzard Entertainment, BMC Software, CIBER, CFC Financial Services Group, CyberTrader, Emerson Process Management, Interstate Connections, NCsoft, Oracle, Sun Microsystems, Trilogy, Unysis Corp. and Vignette.
Austin has over 26 companies in the wireless industry, over 22 in the biomedical and pharmaceutical industry, 18 in clean energy and 9 in the automotive brain business.
Other interesting stats: 5th most educated city among top 50 metro areas in 2005. Austin saw 56 corporate expansions in 2006. Between 1980 and 2006, the 5 county Austin area went from a population of 585,000 to 1,514,000. We added over 476,000 new jobs during that period. By 2015 the Austin area is expected to be well over 2,000,000 people and we will add another 91,000 jobs.From 1995 to 2006, the Austin area grew by over 41%. That compares to a rate of almost 24% in Texas and 13% for the country.
That's all for the stats. What this all adds up to is that many, many people will relocate to the Austin area over the next 10 years. They'll come for jobs, to retire, for second homes and other reasons. As long as nothing too dramatic happens nationally of globally, Austin should remain quite healthy. With Austin remaining healthy, assuming home builders don't go too crazy with home starts, our real estate market should be just fine.
Email Sam or call 512-293-2422.