DATA POINTS

By

THE CAPITAL AREA COUNCIL OF GOVERNMENTS

www.datapoints.org AUSTIN & THE CLEAN ECONOMY
Although Austin is touted as a leader in the green economy, the findings of a new report question the regions green credentials. In one of the most comprehensive examinations of the clean economy to date, the Brookings Institution determined total green employment in each of the countrys 100 largest metro areas. Austins clean economy ranks 36th among the 100 largest metropolitan areas, with approximately 14,500 individuals working in the clean economy. The region fares appears even less competitive on measures of concentration; with less than 2 percent of Austins employment categorized as clean, the region ranks just 43rd among the 100 largest metros. As highlighted by the findings of the Brookings Institution, the clean economy is becoming increasingly important in supporting high-quality job creation: The clean economy employs approximately 2.7 million workers across a host of industries. Most jobs within the clean economy are in manufacturing and public services, including mass transit. Nascent subsectors such as solar, wind, smart grid, and batteries comprise a comparatively smaller share of the clean economy. The clean economy offers relatively high wages to low- and middle-skilled workers. Median wages in the clean economy are 13 percent higher than the U.S. median wage. Furthermore, the clean economy has a disproportionately higher percentage of workers with relatively little formal education. Economic clustering increases the performance of the clean economy within individual metropolitan areas. Compared to isolated firms, clean economy companies located in counties containing a significant number of jobs from other establishments in the same segment grew 1.4 percentage points faster each year. If Austin is to benefit from this growing industry, the region must act aggressively to support the clean economy. Initiatives such as CAPCOGs investment in the Pecan Street Project, for example, brings together the regions existing assets to develop a green cluster around smart grid technology. Given the decline in highwage industries within the Austin region (see the Mid-Year Economic Review on the following page), developing a vibrant clean energy industry may be as critical as previous high-tech fields proved in enriching our region. CLEAN ECONOMY EMPLOYMENT (2010)

JULY 2011

EMPLOYMENT UPDATE - MAY

6.7% -0.1%
COUNTY

CAPCOG UNEMPLOYMENT RATE CHANGE SINCE MAY 2010

+ 11,009 JOBS GAINED DURING PAST YEAR

UNEMPLOYMENT JOBS + / -

Bastrop Blanco Burnet Caldwell Fayette Hays Lee Llano Travis Williamson

7.6% 5.6% 6.5% 8.1% 5.8% 6.6% 6.1% 7.5% 6.6% 7.0%

359 -31 -47 192 -84 1,009 223 -105 7,020 2,473

SOURCE: Texas Workforce Commission

RETAIL SALES TAX COLLECTION - JULY

COUNTY TOTAL CHANGE SINCE JULY 2010

Bastrop $435,963 Blanco $45,955 Burnet $670,997 Caldwell $231,632 Fayette $201,233 Hays $2,108,618 Lee $125,697 Llano $64,300 Travis $13,276,918 Williamson $7,837,666
SOURCE: Texas Comptroller

1.6% 1.8% 0.0% 6.4% 3.2% 0.1% 16.7% 1.6% 4.2% 5.8%

AUSTIN METRO REAL ESTATE - JUNE

JUNE '11 JUNE '10 CHANGE Sales Average Price Total Listings Inventory (Months)

2,361

2,190

7.8%
-0.4%

EMPLOYMENT

$265.5K $266.8K

90K 40K 90K 20K 40K

10,958 13,353 -17.9%

6.9

7.2

-4.2%

SOURCE: Texas State Realty Center For questions about Data Points, please contact John Rees 512.916.6183 jrees@capcog.org

10K 20K
> 10K
Source: Brookings Institution

DATA POINTS
By

THE CAPITAL AREA COUNCIL OF GOVERNMENTS

2011 MID-YEAR ECONOMIC REVIEW
On first glance, the performance of the Capital Area economy appears rather impressive in comparison to the lackluster performance of the national economy. There have never been more jobs in the Austin metropolitan statistical area (MSA). In May, total employment in the Austin MSA reached 785,300. Austin has now surpassed its previous employment peak (reached in November 2008). Despite these gains, however, a close look at the employment numbers reveals several troubling trends. Private Employment Remains Below Pre-Recessionary Peak: Private sector employment has declined by nearly 6,000 jobs since November 2008. Without strong government employment growth, total employment within the Austin MSA would have remained below the pre-recessionary peak. In the months ahead, government employment growth will likely slow as the region absorbs the budget cuts recently passed by the Texas legislature. The loss of Austin-based jobs in state agenciescombined with the elimination of local education positionswill further increase the need for greater private sector growth within the Austin MSA. Employment Declines Permeate High-Wage Industries: The six highest-paying private sector industries have all experienced employment declines since November 2008. Manufacturing, with average salaries approaching $86,000 annually, has declined by nearly 13 percent. Information, where average annual salaries exceed $72,000, has shed nearly 10 percent of its workforce in the past 18 months. Employment Gains in Private Sector are in Low-Skill, LowWage Industries: Outside of government, only three industries in the Austin MSA have experienced job growth since November 2008Educational and Health Services, Leisure and Hospitality, and Other Services (an ad hoc category covering everything from machinery repair to drycleaning to pet care services). These three industries have the lowest average annual wages of any private sector industries within the Austin MSA. Furthermore, they are all locally-serving industries; the recent growth of these industries is largely dependent on strong population growth. Continued economic prosperity within Austin can only be sustained by higher levels of growth among high-skill, highwage industries. AUSTIN MSA EMPLOYMENT BY INDUSTRY
Change in Employment from November 2008 to May 2011
Educational and Health Services Government Leisure and Hospitality Other Services Professional and Business Services Financial Activities Information Trade, Transportation, and Utilities Natural Resources / Construction Manufacturing

-8K -6K -4K -2K K

2K 4K 6K 8K

Source: Bureau of Labor Statistics

AUSTIN MSA PRIVATE EMPLOYMENT

Rate of Industry Job Growth (Nov 08 - May 2011) & Average Industry Salary (2010) Manufacturing Information Finance Professional and Business Services Education and Health Trade, Transportation, and Utilities Natural Resources / Construction -10.0% -5.0% Other Services

$100,000 $80,000 $60,000 $40,000 $20,000 $0

Leisure and Hospitality

0.0% 5.0% 10.0% 15.0%

-15.0%

Source: US Census Bureau

U.S. TOTAL EMPLOYMENT (IN MILLIONS)

Historical Employment 2007 - June 2011 / Projections through 2013
Employment High: Employment Low: June 2011 Jan 10 Employment: Nov 08 127.3 Million 132.1 Million 139.1 Million Projected High: June 13 139.1 Million

150 125 100 75 50 25 0 07 08 09 10 11 12 13

Source: Bureau of Labor Statistics / Author

Despite these weaknesses in the regional economy, Austin looks undeniably dynamic when placed within the context of national trends. Two years after the official end of the recession, Americas economic recovery has proved frustratingly anemic. Today there are 7 million fewer jobs in America since employment peaked in November 2008. At the current rate of job growth (based on job creation since employment reached its trough in January 2010), America will not return to pre-recessionary employment levels for another two years. The U.S. is facing the real possibility of suffering a nearly five-year period without any net job creation. Given the countrys steady population growth, it will take even longer for unemployment rates to fall to pre-recession levels. Without an acceleration in job creation, the U.S. economic recovery will continue to feel illusionary to many Americans.