Austin's boom to continue through 2014
Source: Austin Business Journal
Austin has had a spectacular year, and the future is
looking just as bright, predicted local economist
Angelos Angelou at his annual economic outlook
The Austin area welcomed 65,500 new residents,
created 26,300 new jobs, founded 1,120 new
businesses and saw $722 million in venture capital
investment in 2012, according to numbers compiled
by Angelou Economics. Unemployment sank to 5.3
percent, well below the 7.8 percent national average.
The city’s future looks just as bright. About 28,000
new jobs are forecast for 2013, and 2014 is projected
to yield more than 30,000 new jobs. Angelou said
those numbers are on the conservative side.
At the start of this year Angelou predicted about
19,000 new jobs but the area ended up with 26,300
Austin’s growth will continue to be driven by its own
unique brand of entrepreneurship, the tech sector,
real estate and entertainment, Angelou predicted.
“Austin is hot,” he said, “Never, never in all my
years have I [seen] a situation like this one.”
The country is paying attention, Angelou said, and
Austin’s brand is gaining nationwide traction. Austin
welcomed several new well-known corporations, as
well as large expansions from several already in the
area. New to the Austin area are Visa Inc., General
Motors Co., while Apple Inc. and Samsung have
recently committed to expand their presence in Austin.
Eventually, Angelou said, Apple could grow to become
the area’s largest employer. It employs about 3,500
people here now and is on track to double that
workforce in the coming years. That will help offset
any future layoffs at Dell, which has reduced its
headcount in recent years, according to various
sources. Several years ago Dell reported about
14,000 Central Texas workers but that number has
reportedly dropped to about 12,000.
The leisure and hospitality sector — driven by Austin’s
flagship events South By Southwest, Austin City Limits
and the new Formula One race — led the city’s growth
with a 5.9 percent growth rate. In terms of sheer
numbers, the professional services category added
the most jobs, with 6,700 new paychecks and a 5.8
percent growth rate. Construction also grew at 5.8
percent. Even the government, which many expected
to reduce headcount locally, showed gains in 2012.
Austin bucked a national trend by bringing in more
venture capital funding this year — about 15 percent
more. Nationwide, and even across Texas, venture
capital investment sank. That money fuels job growth
and creates wealth in the area, Angelou said. The city
still sees a shortage of seed funding for new companies,
The new, voter-approved medical school at the
University of Texas will drive significant growth in the
coming years, Angelou said. The hospital will position
Austin at the forefront of Texas’ medical industry and
offer great resources for entrepreneurs looking to set
up shop in the health care business.
Real estate looked strong in the Texas Capital, with
strong absorption of space. The continued population
growth has the potential to create a lasting and severe
shortage of residential real estate in the near future,
Angelou said. Landowners can look forward to higher
rents and property values.