Austin, TX: State of the Economy October 2015

The Presentation inside:

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

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2 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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3 Economic growth in Austin outpacing most other leading metros – 3x faster than U.S. since 2009 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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4 182,700 net new jobs created in Austin since the recession ended – ~3x faster than U.S. growth 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).

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5 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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7 Austin is among fastest growing tech markets in U.S. Projected Job Growth, ‘14-’20 Source: EMSI, 2014. Includes self-employment. Published in ATC Tech Talent Study:

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8 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).

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10 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.

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11 Blame California Florida: Wealthiest movers from Bay Area/Silicon Valley, but FL leads donor states Source: Internal Revenue Service, SOI Tax Stats.

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12 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 *Complete responses only (n = 50). Differences not statistically significant. 1 = Not difficult 2 = Somewhat difficult 3 = Difficult 4 = Very difficult 5 = Extremely difficult 1 = Not confident 2 = Somewhat confident 3 = Confident 4 = Very confident 5 = Extremely confident 0 = 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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13 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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14 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).

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