The Austin area received mixed jobs news in the first half of 2013. Of the 100 most populous metropolitan areas in the nation, Houston, Dallas, and Austin are in the top 10 for highest year over year percent change in payroll employment for 2013Q2. Payroll employment for the region performed relatively well growing 3.7 percent from year ago in both Q1 and Q2. On the downside of labor news, IBM, which employs over 6,000 workers in the Austin area, announced system wide layoffs. One West Bank also announced that it will layoff 725 workers with the majority coming from its calling center based in Austin. Since the beginning of the year the unemployment rate ticked up to 5.4 percent in the region, yet remained well below the 2013Q2 national average of 7.6 percent.
Housing markets pulled back a bit in Q2. Single-family housing starts were down to a 7,687 unit annual rate in Q2, while multifamily housing starts declined to a 10,359 unit annual rate from a breakout 17,537 in Q1. The tight supply for single-family homes has not kept up with demand, leading to increased existing home prices. Homeowners will enjoy a positive wealth effect from increased home prices which will foster gains in consumer retail sales. The outlook for housing starts and home prices is positive and a continued upward trend is expected for the remainder of the year.
Austin is being “googlefied.” At the beginning of Q2, Google formally announced that Austin would become the next city to receive Google Fiber which will allow for high speed internet with speeds up to 1 gigabit per second. This has stirred competition amongst other internet providers in the region, with both AT&T and Time Warner Cable announcing plans to expand internet accessibility and speeds throughout the Austin area. The region will enjoy a competitive advantage from the new investment which will help to attract more high technology industries.
Click here for the complete Austin MSA Regional Economic Update: Austin 2013Q2.