Austin’s labor market continued to expand through the third quarter of 2012, driven by a robust local tech sector. The unemployment rate in Austin averaged 5.9 percent in Q3, 2.2 percentage points below the national rate during the same period. Recently named one of five international Silicon enclaves by Upstart Business Journal, Austin is attracting major business development. Apple, Incorporated purchased land for a two-building headquarters in Northwest Austin in the second quarter, and Samsung Electronics Co. is undertaking a $4 billion expansion of its Austin factory. Austin could poach additional jobs from Silicon Valley, following voter approved tax increases for high-income earners and state sales and business taxes in California this year. Texas’ lack of an income tax and Austin’s foundation as a tech hub make the area attractive for companies looking to relocate. Notably, General Motors Co. is in the process of staffing a 500-person tech innovation center in Northwest Austin for early 2013, opening the door to future investment from the automobile manufacturing industry. Although Austin’s high proportion of government jobs leaves it vulnerable to job losses stemming from federal budget cuts associated with the Fiscal Cliff, government payrolls have held up well thus far in 2012, rising at a 0.6 percent annualized rate through September.
Revised Austin income data shows a surge in income growth in the first half of 2012, with the Austin metro area outpacing national income growth by 2.8 percent in 2012Q2. As the Austin job market continues to expand, the metro area should see full-year 2012 income growth bordering seven percent, more than three percent higher than the national forecast.
Multifamily construction has surged in the first three quarters of 2012, positioning the Austin area for a more than 150 percent increase in multifamily activity compared to 2011. Rents and occupancy levels have climbed in Austin’s urban core recently, spurring condo and apartment construction. Single-family construction is up 54 percent year-over-year in 2012Q3. Although these numbers tend to be volatile, Austin housing starts are poised for continued strong growth. Home prices are also on the upswing, up 2.5 percent year-over-year in the second quarter.
Click here for a PDF version of the complete 2012Q4 Austin Regional Economic Update: Austin 2012Q4.