Tourists and tech make Austin a top city for jobs
Dec 8, 2015, 1:55pm CST
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Michael Theis Staff writerAustin Business Journal
Thanks to booming hospitality and tech sectors, Austin is the fourth-best-performing city for job growth and retention, according to the latest edition of the Milken Best Performing Cities Report, an annual study from the Milken Institute that ranks U.S. cities by their economic might.
http://www.best-cities.org/2015/best-performing-cities-report-2015.pdf
However, the Austin area dropped two spots from Milken's 2014 rankings. It's the second year in a row that Austin has fallen on the rankings. In 2013, the Austin area was ranked No. 1 for job growth and creation that year.
At least some of that slide can be chalked up to the Austin economic expansion slowing in comparison to other cities in recent years. In the years immediately after the Great Recession, Austin's job growth was consistently among the best in the nation, ranking No. 2 in the country between 2009 and 2014. But in 2014 alone, Austin's job growth ranked 12th in the nation. Same with wage growth. Austin ranked third in the nation for wage growth between 2008 and 2013, but in 2013 alone, Austin's wage growth was the 25th-fastest in the nation.
Despite the slide, the Milken Institute noted that Austin's still-strong performance on its index was due partly to the region's economic diversification to be less dependent on microchip manufacturing and energy. In particular, the report singled out the expansion of Austin's leisure and hospitality industry, which grew employment by 6 percent in the 12 months ending this past August. Further, since 2010, hospitality industry employment in Austin has expanded by 33 percent.
"The South By Southwest Festival is a major driver. It drew 13,300 hotel reservations, with an average stay of five nights and 60,254 nights of bookings overall," reads the report. "In total, the 2015 festival injected $317.2 million into the city’s economy."
Milken's findings in the latest report echo the results of a study conducted by American City Business Journals, the Austin Business Journal's parent company, which found that jobs in the hospitality, tourism and restaurant industry are among the most numerous in the Austin area.
But behind all the festivals and hotels, Austin is still a tech town. The report notes that employment in Austin's professional, scientific and technical services industry has grown by more than 39 percent since 2010 and 9.3 percent – roughly 7,100 jobs – in 2014 alone. That's still the largest one-year employment increase in any industry sector in Austin.
But there could be clouds on the horizon. The report warns that falling oil prices could affect tax receipts and force cuts to state budgets that would be felt by job cuts at state government offices predominantly based in Austin.
All this economic activity is still drawing people here by the busload.
"Population growth was a whopping 3 percent in 2014, more than four times the national average gain," reads the report. "Housing demand has returned to pre-housing crisis levels despite prices rising at an 8 percent year-over-year pace in recent months."
Topping the Milken's list this year is the San Jose metro area. The report noted the region's bustling tech sector as its prime asset, but warned that rising business and housing costs could restrict job growth there if not contained.
Michael Theis covers local government, courts and economic development for the Austin Business Journal.
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