AngelouEconomics 2010 -2011 Economic Forecast 

AngelouEconomics

Austin Economy 

Austin's economy will experience mild job growth in 2010 before returning to form in 2011, with employment increasing by 9,200 and 17,100 respectively. New jobs will be created across almost all of Austin's sectors. Job growth will remain strongest in Austin's core areas of education and health care, professional services, government, financial activities and information. Moderate growth will occur in transportation, warehousing and utilities, and retail trade. Manufacturing and construction will continue to have small job losses in 2010 as these hardest-hit industries recover the most slowly. However, they are expected to show growth again by late 2010 or early 2011. 

Despite Austin's sluggish economy in 2009, people still see the metro area as a place of opportunity. Last year, the area gained 44,400 people in spite of its mild job losses. As long as Austin maintains its reputation as a great place to live and find well-paying jobs, people will continue to move here to either find work or create their own. Over the next two years, AngelouEconomics expects that the metro area's population will grow by more than 110,000, topping 1.837 million by the end of 2011.  

As the Austin economy begins to add jobs again, AngelouEconomics expects retail sales to reverse their 2-year trend of declines. Retail sales throughout the metro area will increase by $1.5 billion in the next 2 years to average about $22.85 billion annually in 2011. 

While Austin has fared much better than much of the U.S., growth over the next two years is still expected to be conservative, with a reduction of unemployment rates by 1%. The unemployment rate, which averaged 6.7% in 2009, is expected to fall to 6.2% in 2010. By the end of 2011, it is expected to drop an additional 0.5% to 5.7% 

Conclusion 

At the beginning of 2010, the national economy remains in the grips of its worst economic slowdown of the last 50 years. With the recession expected to be officially declared over by mid-year, the recovery is moving at a snail's pace. Job recovery will likely take much longer. 

Unlike much of the nation, the Austin area has weathered the storm very well. With minimal job loss in 2009, Austin can look forward to the future with relative confidence. Companies and workers continue to consider Austin a "hot spot" for top talent and interesting, well-paying jobs. Austin consistently ranks high on "Best Cities" lists, whether they measure business-friendliness, quality of life, or entrepreneurism. These traits will remain Austin's core competitive strengths as it attracts companies and people.  

For Austin to maintain its competitiveness, it must continually build upon these great assets. In today's struggling financial environment, this translates into increased local government support. Effective economic development policy must be bolstered by strategic incentives and inducements that are competitive with other cities' attraction packages.  

In addition to government support that attract companies and people, Austin's success will also be determined by its capacity to grow jobs from within. To do so, the Austin area must cultivate entrepreneurism and attract additional early-stage capital. If people migrating to the region cannot find work, they must find the tools in place to create their own. Austin area residents are very entrepreneurial, and the region needs to continually assess and improve its infrastructure to keep entrepreneurism flourishing. 

AngelouEconomics expects the current economic conditions to extend through the second quarter of this year, as the embattled technology sector and real estate markets struggle to rediscover their footing. In the meantime, Austin's traditional economic base, the public sector, will continue to provide stability. While this "recession-proof" sector is incapable of supplying the region with an abundance of new jobs, gradual employment gains will persist through the end of the year.  

The region's economy will continue its path of improvement with the addition of 9,200 jobs in 2010 and another 17,100 jobs in 2011. Meanwhile, Austin's population will surpass 1,837,000 in the next two years.  

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