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Austin, TX: State of the Economy

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Brian Kelsey's presentation at the 2016 Austin CPA Chapter CFO/Controllers Conference on September 20, 2016.

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Austin, TX: State of the Economy

  1. 1. State of the Economy in Austin, Texas 2016 Austin CPA Chapter CFO/Controllers Conference September 20, 2016
  2. 2. 2 Economic Summary: Ludicrous Speed Source: (Chart) US Bureau of Labor Statistics, State and Area Employment, Hours, and Earnings, Seasonally Adjusted. (Unemployment) BLS, Local Area Unemployment Statistics, Not Seasonally Adjusted. (Tech) Emsi, includes self employment. See CompTIA Cyberstates report for tech definition. (GDP) US Bureau of Economic Analysis, inflation adjusted in chained 2009 dollars. 44 consecutive months of total nonfarm job growth at 4.0%+ in Austin-Round Rock MSA on a 12-month % change basis (Aug 2012-March 2016). 3.1% unemployment in city of Austin (July ‘16)—9 out of last 12 months under 3.0%, lowest period since 1999. Tech employment grew 31% in Austin-Round Rock MSA during 2010-15, fourth highest among MSAs w/ 50K+ tech jobs. Travis County #5 among counties. Average annual growth in real GDP in Austin-Round Rock MSA was 5.5% during 2010-14. -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Total Nonfarm Job Growth in Austin-Round Rock MSA, 12-month % change Jan ‘91 May ‘00 Dec ‘01 Dec ‘03 Mar ‘07 Sept ‘09 Feb ‘10 Nov ‘15 Jul ‘16
  3. 3. 3 Economic Summary: Ludicrous Speed Source: US Bureau of Economic Analysis. Total real personal income is in chained 2009 dollars and adjusted for regional cost of living differences using BEA’s Regional Price Parities. Annual Growth Rate in Real GDP (chained 2009 dollars) -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 US Metro Portion Austin MSA Metro Area GDP Growth 2010-14 Dallas-FW 25.4% San Jose 25.1% Austin 23.6% Houston 20.5% US (Metro) 8.0% Total real personal income in Austin-Round Rock MSA grew by $15.6 billion in 2010-2014. 22.5% gain ranked 3rd among large metros behind Houston (24.2%) and San Jose (22.5%).
  4. 4. 4 Rapidly Growing Aggregate Wealth Source: US Bureau of Economic Analysis. Total real personal income is in chained 2009 dollars and adjusted for regional cost of living differences using BEA’s Regional Price Parities. Total Real Personal Income Growth, 2010-2014 Top MSAs (all sizes) ranked by percentage growth 20.9% 21.6% 22.0% 22.5% 22.5% 24.1% 24.2% 31.5% 33.7% 37.4% 52.0% San Francisco, CA Casper, WY Fargo, ND-MN Austin, TX San Jose, CA Bismarck, ND Houston, TX Fayetteville, AR-MO The Villages, FL Odessa, TX Midland, TX
  5. 5. 5 Source: Mike Maciag, Governing, The Counties Where Wealthier People Are Moving.
  6. 6. 6 The Human Capital City (500K+) 2010 2015 Change Percent Austin, TX 815,974 931,830 115,856 14.2% Denver, CO 603,300 682,545 79,245 13.1% Seattle, WA 610,383 684,451 74,068 12.1% Charlotte, NC 738,678 827,097 88,419 12.0% Fort Worth, TX 746,547 833,319 86,772 11.6% Washington, DC 605,126 672,228 67,102 11.1% San Antonio, TX 1,333,953 1,469,845 135,892 10.2% Houston, TX 2,114,761 2,296,224 181,463 8.6% Oklahoma City, OK 582,118 631,346 49,228 8.5% Dallas, TX 1,200,699 1,300,092 99,393 8.3% Nashville, TN 604,926 654,610 49,684 8.2% Portland, OR 585,427 632,309 46,882 8.0% City (500K+) Change Percent Earnings Austin, TX 29,501 36.4% $70,248 Denver, CO 25,629 40.2% $65,481 Seattle, WA 27,062 26.6% $75,482 Charlotte, NC 20,251 33.3% $67,027 Fort Worth, TX 10,213 29.9% $67,830 Washington, DC 43,465 38.7% $84,682 San Antonio, TX 3,880 5.4% $62,540 Houston, TX 30,460 20.8% $72,342 Oklahoma City, OK 10,395 31.0% $60,989 Dallas, TX 16,686 21.1% $75,384 Nashville, TN 11,186 20.5% $55,910 Portland, OR 23,761 36.4% $61,595 Total Population Graduate Degree Holders (Age 25+), 2010-15 Source: (Total Population) US Census Bureau, Population Estimates Program, July 1 Estimate (accessed 09/15/16). (Graduate Degree Holders) US Census Bureau, 2015 and 2010 American Community Surveys, 1-Year Estimates. Earnings are median earnings, which are calculated as the sum of wage or salary income and net income from self-employment.
  7. 7. 7 Blame California Florida: Top Origins of Different State Migration to Travis County, 2012-2014 State Tax Returns HH Estimate Exemptions Ppl Estimate Avg Income Per Return FL 30,162 46,911 $55,327 CA 15,503 29,914 $79,887 GA 10,066 18,652 $27,437 NY 9,566 15,669 $53,610 IL 4,686 8,445 $56,493 NC 3,513 7,902 $41,301 AZ 3,403 7,614 $47,945 NJ 4,124 7,502 $45,135 MI 4,026 6,921 $27,489 PA 3,497 5,959 $36,688 TN 2,819 5,639 $32,410 AL 2,211 4,679 $26,785 Source: Internal Revenue Service. Average income is total adjusted gross income divided by the number of returns. County Tax Returns HH Estimate Exemptions Ppl Estimate Avg Income Per Return Miami-Dade, FL 8,079 11,780 $25,867 Los Angeles, CA 4,853 8,711 $91,898 Broward, FL 4,347 6,449 $28,492 Hillsborough, FL 3,714 5,696 $21,893 Maricopa, AZ 2,357 5,582 $51,508 Cook, IL 3,137 5,487 $52,968 Bronx, NY 2,390 4,155 $23,895 Fulton, GA 2,580 4,153 $28,097 Wayne, MI 2,148 3,685 $19,277 Palm Beach, FL 2,036 3,187 $31,003 Riverside, CA 1,052 3,008 $32,375 Orange, FL 1,725 2,986 $31,551
  8. 8. 8 #1 San Francisco 124% #2 Wake 48% #3 New York 45% #4 San Mateo 39% #5 Travis 30% Tech Sector Employment Growth, 2010-15 – Top Five Counties (minimum 50K tech jobs) Source: Emsi, includes self employment. See CompTIA Cyberstates report for tech definition.
  9. 9. 9 #1 San Francisco 149% #3 Dallas 55% #5 Maricopa 45% #4 Alameda 55% #2 Travis 115% Computer Systems Design & Related Services Employment Growth, 2010-15 – Top Five Counties (minimum 20K jobs) Mobile, Apps, SaaS Source: Emsi, includes self employment. See CompTIA Cyberstates report for more on tech. Earnings include wages, salaries, supplements (additional employee benefits), and proprietor income. Average earnings in Travis County are $119,596.
  10. 10. 10Source: Startup Compass, 2015 Global Startup Ecosystem Ranking.
  11. 11. 11http://www.arma-tx.org/about/austin-manufacturing Manufacturing employment in Austin-Round Rock MSA grew by 21% during 2010-15 and is now back to pre- recession levels.
  12. 12. 12 Source: Kauffman Foundation, Kauffman Index, Metropolitan Area Rankings for Startup Activity. % of adult population who became entrepreneurs in a given month Austin 0.60% % of new entrepreneurs who were not unemployed before starting business Austin 79.88% Number of startup firms (< 1 yr old w/ at least one employee besides owner) per 1,000 firm population Austin 105.2
  13. 13. 13 Source: Kauffman Foundation, Kauffman Index, Metropolitan Area Rankings for Startup Activity. 1. Miami 8.69% 2. Nashville 8.12% 3. Portland 8.02% 4. Austin 7.97% 5. LA 7.76%
  14. 14. 14 Source: Kauffman Foundation, Kauffman Index, Entrepreneurial Demographics, Austin-Round Rock MSA Profile. Austin is top 5 in: Female Biz Owners (#4) Age 20-34 Biz Owners (#3) Age 55-64 Biz Owners (#2)
  15. 15. 15 Can we leverage city’s successful startup culture to achieve inclusive/equitable economic growth? Source: US Census Bureau, 2012 Survey of Business Owners. *Includes all firms classifiable by gender, ethnicity, race, and veteran status and not total universe of firms (e.g., no publicly held firms). Ownership Average Sales With Employees Average Pay Asian $398,063 29% $35,171 Male $673,168 23% $44,219 White $501,880 20% $42,141 Female $150,694 12% $31,600 Hispanic $103,386 8% $34,105 Black $111,324 7% $25,813 All Firms* $456,346 19% $41,441 Characteristics of Business Owners in Austin (city), 2012
  16. 16. 16 Challenges • Inclusive prosperity—45% of primary working age (25-64) city residents do not have a postsecondary degree. • When will housing costs in urban core start to erode competitive advantage relative to pricey coastal markets? • Trying to tackle big-city/regional issues with small-city/local toolkit. Source: US Census Bureau, 2015 American Community Survey, 1-Year Estimates.
  17. 17. $21,713 $26,221 $35,306 $50,379 $70,248 No HS Diploma HS Diploma SC/Associate Bachelor Graduate $543/month 17 Explaining economic segregation in Austin (city) Median Earnings and Maximum Affordable Housing Costs for Workers Age 25+ by Education Attainment Source: US Census Bureau, 2015 American Community Survey, 1-Year Estimates. Asian, White (Not Hispanic or Latino), and Black are race alone categories and Hispanic/Latino is any race. Housing affordability is defined as spending less than or equal to 30% of income on total housing costs (rent or mortgage, utilities, etc.). SC is Some College. $1,259/month $883/month $656/month $1,756/month 25% 33% 69% 78% Hispanic/Latino Black White Asian % Pop Age 25+ by Race/Ethnicity with a Postsecondary Degree Income Asian $110,069 White $108,413 Hispanic/Latino $45,614 Black $43,685 Median Family Income by Race/Ethnicity Budget Asian $2,752 White $2,710 Hispanic/Latino $1,140 Black $1,092 Max Affordable Monthly Housing Costs Median Gross Rent (Housing Cost) for 2BR: $1,243
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  20. 20. 4101 Medical Parkway Suite 116 Austin, TX 78756 civicanalytics.com Brian Kelsey, Principal brian@civicanalytics.com

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