Austin: Navigating the “Great Reset” and Creating a More Sustainable Economy
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Transcript of Austin: Navigating the “Great Reset” and Creating a More Sustainable Economy
Austin: Navigating the “Great Reset” and Creating a More
Sustainable Economy
Leadership AustinOctober 26, 2010
Brian Kelsey, Presenter
Leadership Austin 2 October 26, 2010
Overview
1. Pre- and post-recession economy
2. Equity and sustainability
3. Discussion
Leadership Austin 3 October 26, 2010
US: Depth of the Great Recession
Leadership Austin 4 October 26, 2010
US: Growth driving growth 2002-07
United States% US Emp
2002Job Growth
2002-07% TotalGrowth
Health Care and Social Assistance 10% 2,265,903 15%
Real Estate and Rental and Leasing 3% 2,079,117 14%
Professional, Scientific, Tech Services 6% 1,825,371 12%
Construction 6% 1,775,786 12%
Administrative, Wst Mgt, Remediation 6% 1,422,690 10%
Accommodation and Food Services 7% 1,312,946 9%
Finance and Insurance 5% 956,505 6%
Government 14% 800,561 5%
Manufacturing 10% -1,262,069 -9%
Source: EMSI. Industries selected based on job growth. Not all industries shown.
Source: U.S. Bureau of Economic Analysis
Source: U.S. Bureau of Economic Analysis
Leadership Austin 7 October 26, 2010
US: The “Great Reset” 2007-2009
• Housing collapse• Financial crisis• 5-7 million jobs lost• 10% unemployment• Spending down• Foreclosures
Leadership Austin 8 October 26, 2010
US: Economic recovery 2009-today
• GDP is growing again, but no labor market improvements in many regions
• Housing prices are stabilizing, but rising foreclosures in many markets
• Uncertainty causing many consumers and investors to stay on sidelines
Leadership Austin 9 October 26, 2010
Austin rated top U.S. city for 2010
Leadership Austin 10 October 26, 2010Source: http://www.pswrealestate.com/blog/2010/05/austins-2010-accolades
#1 – Austin Best City for Next DECADE! – Kiplinger
#2 – May 24, 2010 – Austin 2nd Most Innovative City – Forbes
May 24, 2010 – Austin ranks high on Quality of Life – Portfolio.com
May 11, 2010 – Austin Surviving and Thriving in Recession – Mainstreet
#1 – Apr 28, 2010 – Texas Cities Best Place for Jobs (Austin #1) – NewGeography
Apr 20, 2010 – Austin #3 Best City to Relocate – RelocateAmerica.com
#1 – Apr 1, 2010 – Austin tops Builder Market Health Index for 2010 – Builder Magazine
Mar 25, 2010 – Austin the model for US job recovery – Time Magazine
#1 – Mar 8, 2010 – Austin Best Economic Recovery in U.S. – Forbes
Feb 25, 2010 – Austin #1 Healthiest Housing Market in 2010! – Builder Magazine
Feb 23, 2010 – CNN’s take on why Austin is different, and leading nation’s recovery – CNN
#1 – Feb 5, 2010 – Austin #1 for Small Business in 2010 – BizJournal
#1 – Jan 22, 2010 – Austin Top City for Starting a Business – Bizjournals
#1 – Jan 8, 2010 – Austin tops in US for GMP – Fiscal 2009 according to Brookings Source: http://www.pswrealestate.com/blog/2010/05/austins-2010-accolades
Leadership Austin 11 October 26, 2010
Austin’s flirtation with recession
Source: MSNBC Adversity Index, Moody’s Economy.com
According to Moody’s Economy.com, Austin-Round Rock-San Marcos entered recession in February 2009, more than a year after the U.S. economy (December 2007). The recession lasted only six months in Austin. Economic indicators started turning around in August 2009. The U.S. recession officially ended in June 2009.
Leadership Austin 12 October 26, 2010
Brookings: Austin in top 20 metros
Rankings for Austin-Round Rock-San Marcos (100 largest metro areas)
Employment growth #4Unemployment rate #13Gross metro product #2
Housing prices #10Real-estate owned properties #30
Source: Brookings MetroMonitor, September 2010
Leadership Austin 13 October 26, 2010
Employment growth
Source: U.S. Bureau of Economic Analysis
-2%
0%
2%
4%
6%
8%
10%
12%19
70
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
United States
All U.S. Metropolitan Areas
Austin-Round Rock-San Marcos
Average: 4.7%2008: 3.3%
Leadership Austin 14 October 26, 2010
Population growth
0%
1%
2%
3%
4%
5%
6%
7%
8%19
70
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
United States
All U.S. Metropolitan Areas
Austin-Round Rock-San Marcos
Source: U.S. Bureau of Economic Analysis
Average: 3.8%2008: 3.7%
Leadership Austin 15 October 26, 2010
Moody’s: Back to jobs peak mid-2011
Source: USA Today, Moody’s Economy.com
Leadership Austin 16 October 26, 2010
Austin: Job growth by major industry
Austin-Round Rock-San MarcosJobs2009
Growth2002-09
Percent2002-09 U.S.
Professional, Scientific, Tech Services 103,030 30,945 43% 19%
Real Estate 58,230 23,315 67% 43%
Government 166,925 22,176 15% 5%
Accommodation and Food Services 76,924 19,151 33% 10%
Health Care and Social Assistance 80,869 18,029 29% 20%
Retail Trade 99,335 15,153 18% 0%
Finance and Insurance 52,589 13,171 33% 12%
Manufacturing 55,898 -9,843 -15% -18%
Total 1,037,517 193,514 23% 7%
Source: EMSI. Selected industries based on job growth 2002-09. Not all industries shown.
Leadership Austin 17 October 26, 2010
Austin: Job growth by occupation
Austin-Round Rock-San MarJobs2009
Growth2002-09
Percent2002-09 U.S.
MedianWage
Sales and related 144,647 33,494 30% 11% $25,730
Office and admin support 151,329 21,602 17% 1% $31,408
Business and financial oper 70,654 18,347 35% 18% $44,970
Food preparation and serving 70,617 17,527 33% 10% $18,470
Management 84,622 16,580 24% 11% $57,242
Education, training, and library 60,527 11,751 24% 11% $56,139
Arts, design, ent, sports, media 40,853 10,091 33% 14% $28,246
Construction and extraction 51,202 8,653 20% 4% $34,445
Total 1,037,517 193,514 23% 7% $38,002
Source: EMSI. Selected occupations based on job growth 2002-09. Not all occupations shown.
Leadership Austin 18 October 26, 2010
Income stagnation
Source: U.S. Bureau of Economic Analysis, EMSI
60%
70%
80%
90%
100%
110%
120%19
70
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Austin-Round Rock-San Marcos % of U.S.
All U.S. Metropolitan Areas % of U.S.
2009: 90.8%(lowest since 1989)
U.S. PCI
Leadership Austin 19 October 26, 2010
Quality of life
$19,258
$30,522 $35,611
$39,591
$59,366
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
One Adult, No Children
Single Parent, One Child
Single Parent, Two Children
Two Parents, One Child
Two Parents, Three
Children
Austin-Round Rock-San Marcos
Median wage (all jobs): $38,002
Growing jobs (2002-09): $32,458
Declining jobs (2002-09): $27,851
Source: EMSI, Center for Public Policy Priorities. Wages are from Family Budget Estimator and show what’s required to meet basic needs in Austin-Round Rock-San Marcos assuming employer sponsored health insurance.
Leadership Austin 20 October 26, 2010
Workforce competitiveness
71%
54%
31%
21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Asian White Black Hispanic
% Population Age 25+ by Race/Ethnicity in Austin-Round Rock-San Marcos with a Postsecondary Degree
Texas State Data Center projects that 63% of total population growth in Austin-Round
Rock-San Marcos during 2010-2040 will be due to growth among Hispanics.
Austin-Round Rock-San Marcos will be majority-minority sometime around 2025. Hispanics will be the largest race/ethnicity
group in 2040.
79% of new high-wage jobs (pay > overall median wage) during 2010-2020 will
require a postsecondary degree.
Source: U.S. Census Bureau, Texas State Data Center, EMSI
Leadership Austin 21 October 26, 2010
Educational attainment
Source: ESRI
Leadership Austin 22 October 26, 2010
Sustainable communities
Median multiple is the ratio of median residential sales
price to median annual wage by zip code. In other
words, do jobs located in the zip code pay enough to give
workers an opportunity to live near where they work?
Historically, the median multiple for home prices to household income is in the range of 3.0 for most areas.
Source: EMSI, Decision Data Resources, Austin Board of REALTORS. Residential median sales prices are YTD 2010 as of July. Map shows only those zip codes with at least 10 home sales.
Leadership Austin 23 October 26, 2010
Discussion
• How can we ensure that Austin remains among the leading U.S. regions?
• What can we do to help more people participate in Austin’s success?
• What changes will be needed?
Leadership Austin 24 October 26, 2010
Brian Kelsey
512-731-7851
@brianjkelsey
http://civicanalytics.com
facebook.com/economicdevelopment
linkedin.com/in/brianjkelsey
Special thanks to EMSI, Decision Data Resources, and Austin Board
of REALTORS for making data available for this presentation.
http://economicmodeling.com
http://www.decisiondata.net
http://www.abor.com