The Austin labor market closed out 2012 with an impressive five percent annualized gain in Q4, driven by a robust local tech sector. Unemployment averaged 5.2 percent for the quarter, 2.6 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. Visa confirmed plans in December for a global information technology center in Austin. The years ahead could see an even greater influx of jobs from Silicon Valley, following voter approved tax increases for high-income earners and state sales and business taxes in California last year. Already, many smaller startups are expanding into the Austin market, and adding local staff. Texas’ lack of an income tax and Austin’s foundation as a hotbed of highly skilled tech workers make the metro area attractive for companies looking to relocate.
Austin year-over-year income growth surged in the first half of 2012, but moderated to a 3.2 percent rate in the third quarter. Local income growth for the fourth quarter likely surged, as was seen in already published national data, as companies accelerated dividend payments ahead of the Fiscal Cliff. Full-year 2012 income growth for Austin is forecast to be 4.5 percent, compared to 3.5 percent nationally.
Multifamily construction swelled over the course of 2012, with the Austin area logging a nearly 200 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 ended 2012 up 31 percent over 2011. Home prices are also on the upswing, up 3.0 percent year-over-year in the third quarter. A recent report by NAI REOC, an Austin commercial brokerage, released a January report that industrial vacancies fell from 17.8 percent in 2011 to 12.9 percent in 2012.
Click here for the complete Austin MSA Regional Economic Update: Austin 2013Q1.