Austin, one of the fastest growing tech metros in the U.S., comprises about 8.0 percent of the total nonfarm payroll jobs in Texas. In the first quarter of 2014, Austin added a net of 3,500 nonfarm payroll jobs, about 4,900 fewer jobs compared to the first quarter of 2013. Stated a different way, Austin created 3.8 percent of the total nonfarm jobs created in the state of Texas during the first quarter of 2014, compared to 10.5 percent in the first quarter of 2013. Although job growth looks a bit softer in early 2014, Austin is still one of the strongest performers in terms of job growth, beating the U.S. average by over 2.1 percent on a year-over-year basis in 2014Q1. We expect job growth to be around 4.0 percent on an annual basis through 2014 as the region attracts people and businesses from across the country because of its pro-business environment.
Austin’s unemployment rate declined to 4.6 percent in 2014Q1 from 5.0 percent of the previous quarter. As of March 2014, about 45,980 people are unemployed in the Austin area compared to 53,900 a year ago. The decline in unemployment came from an increase in both employment and labor force growth, a positive signal for the economy. We expect Austin’s unemployment to decline continuously through 2014 due to ongoing strong job creation. Austin saw a decline in housing starts in the beginning of 2014 because of weak multifamily starts after a strong surge in the previous quarter. We expect total housing starts to rebound this summer and grow steadily through 2014. House prices are expected to grow moderately above the national average in 2014 and 2015. House prices are already at a historic high in the area.
Moderate U.S. economic growth is expected to spur consumer and business demand for tech products and services such as computer equipment, communication equipment, software, information technology and telecommunication services. In turn, we expect Austin’s job growth to be strong in professional and business services, trade, transportation, warehousing, utilities, leisure/hospitality, and other service-producing sectors in 2014.
Click here for the complete Austin MSA Regional Economic Update: Austin 2014Q1.