Our preferred title company in Austin, Independence Title, recently provided an economic forecast meeting for local real estate professionals, and we found the summary below to be very informative.
Recap of Angelos Angelou 2012-13 Economic Forecast
Angelos Angelou, one of the states top economists is predicting a great 2012 for Austin’s economy. For the past 27 years, Angelou has been at the helm of Austin’s annual economic forecast, where he and local economists predict what the future holds economically for the city that year. The former economist for the Austin Chamber of Commerce and nationally known CEO of Angelou Economics forecast 45,000 new jobs will be added to Austin’s five-county metro area in 2012 and 2013, more than doubling the job expansion of the past two years.
18,900 jobs will be added in 2012. Austin added 12,800 jobs last year, but its growth rate of 1.7 percent trailed other major cities in Texas and the state as a whole, which expanded jobs by 2.3 percent.
The drivers for a stronger economy, Angelou said, will be venture-backed startups, a resurgence of established tech companies, an increase in new residents moving into the region from elsewhere, and a stronger real estate development sector (which has taken a back seat in Austin’s growth for the last 5 years). As a result, Austin’s unemployment rate should drop to 5.6 percent in 2013. He said the average for 2011 had been just about seven percent with the unemployment rate at 6.1 percent in December.
Austin’s population will grow by 88,000+ people over the next two years to nearly 1.84 million, with roughly 60 percent of newcomers from out of state and 40 percent from within Texas. Last year, there were about 39,000 newcomers to Austin who collectively spent about $1.1 billion.
Angelou was optimistic about the forecast because of the significant recovery in the high-tech sector last year, which he believes will continue. Austin had a seven percent increase in the number of high-tech workers, expanding to 101,000 last year. “That is substantial. Those increased payrolls are going to kick in this year and next,” predicted Angelou.
According to Angelou’s findings, in 2011, the semiconductor industry saw $300 billion in chip sales and 3.1 percent growth between 2011 and 2012. At the same time, the personal computer industry had $357 million in shipments and 9.3 percent growth, while information technology saw $3.67 billion in spending and 3.7 percent growth.
IT spending is projected to grow nationally and globally, which of course benefits Austin. Venture capital also seems to be doing fairly well, and if those trends continue, we should see an increase in the number of startups. In addition, people are continuing to move to Austin.
The forecast calls for 14,500 single-family home starts during 2012-13 along with the construction of 8,000 new apartment units. It also calls for increased construction of office space, industrial space and retail space as occupancy rates continue to rise.
Angelou also is bullish on the rise in Austin’s entertainment events, including the continued growth of the South by Southwest festivals, the Austin City Limits music festival and the city’s first Formula One auto race, which is scheduled for November.
“We are going back to being a high-tech town, a fun place to be and a great place to live and do business,” he said. “Formula One is going to provide a lot to this region over time, and it will be very successful.” The eventual impact of Formula One could reach $500 million a year to the local economy, Angelou estimated.
April Downey – Independence Title Company
Mobile: (512) 658-0660
Office: (512) 454-4500