By Anthony Michael
Project Manager, Economic Impact
Looking back on the first half of 2017, the Texas and Austin economies continue to show signs of resilience and growth. Before diving into these economicindicators, it is important to first note one of the important drivers of both our local and state economies: population growth.
At both the state and local levels, our population is growing at an outstanding pace. In 2016, Texas’ population grew by 1.6% – which was the largest numerical change in population in the U.S. At this pace, Texas added an average of 8,300 people per week in 2016.
At the local level, Austin was the 9th fastest-growing metro area in 2016 – growing at a pace of 2.9%. For metro area’s over 1 million people, this is the largest annual percent change in population. At this pace, the Austin MSA added over 1,100 people per week in 2016.
Population growth is a key component for economic resiliency for many reasons. First, it indicates that individuals are flocking to our region, which means we have jobs and opportunities for newcomers. Second, it indicates that we have a young workforce – which is supported by census data. Texas’s median age is 3.5 years younger than the national average, while Austin’s is 4 year’s below the national average.
Looking back at Texas’ economy, we see a slight dip in the number of workers (-0.4%) and a slight increase in the unemployment rate (0.4%) over Q1 of 2017. However, these signals are not worrisome considering the growth in the number of businesses (2.9%) and retail growth (2.6%). Businesses are still forming and consumers are spending money – which indicate that the dips in employment are merely small blips on our overall economic resiliency.
What is concerning, is the level of venture capital investment for the state thus far in 2017. In 2014 and 2015, Texas’ startups reached record levels of VC funding. Subsequently, 2016 levels of funding returned to somewhat normal levels. However, 2017’s year-to-date amount is 57.4% less than 2016 – which means we are well below our “normal” VC investing pace. There is still plenty of time for Texas to improve in 2017, but nonetheless, this sluggish start does not bode well for our start-ups.
In Austin, the economic indicators paint a fairly similar picture to Texas economy. Again, we see small dips in employment (-0.3%) and increases to unemployment levels (0.2%) in Q1 of 2017. However, strong retail growth (4.5%), business growth (5.0%), average wage growth (5.1%) and housing starts (21.1%) indicate that the economy is still expanding despite at a fierce pace.
Later this month, AngelouEconomics will be releasing a full Q1 2017 economic update. Coupled with this, will be an in-depth look into Austin’s real estate markets as well as a comprehensive guide to Austin’s health care sector. If you would like to receive the full report, please sign up at the following link: https://www.eventbrite.com/e/q1-economic-forecast-update-tickets-35354838273