During a time when the unemployment rate is increasing in cities around the country, the city of Austin actually expects to add around 2,100 jobs in 2009. While this is a bit disappointing for the city, which added about 19,000 jobs in 2008, it is still better than most other cities around the country.
Angelos Angelou of AngelouEconomics recently released his annual forecast to the Austin business community, at which time he discussed the effects of the recession on the city of Austin. While he acknowledged that things are looking more grim than usual, he also expressed optimism for the city – particularly in the areas of creative media and renewable energy.
“Austin has been through these cycles before, and come out stronger than ever,” Austin Biz Journals reported Angelou as saying.
According to Angelou, Austin ended the 2008 year with a 5% employment rate, but this rate is expected to jump to 7.2% in 2009. Nonetheless, the city is faring better than many other cities across the country when it comes to job growth. While Austin is projected to enjoy a 2.5% job growth, Seattle will only be growing by 1.7%. Boston will only experience a 0.6% growth while Portland will only grow by 0.3%. In fact, the only city doing better than Austin will be Raleigh/Durham, North Carolina, which is expected to just barely edge out Austin with a 2.6% growth rate.
The job sectors that are expected to enjoy the most growth in 2009 include the government sector, which is projected to grow by 4%, and the professional services, education services and health services sectors, all of which are expected to grow by about 5% in 2009. Construction, retail and manufacturing, on the other hand, are expected to be the weakest sectors and to experience an overall loss of jobs.
Angelou also reported that the Central Texas real estate market is projected to experience a downturn during 2009 as well. He anticipates a rise in vacancy rates for industrial, office and retail properties, with the possibility of the Austin metro area seeing a vacancy rate as high as 23%. He also anticipates seeing the occupancy rate dropping to 87%, which is largely due to the nearly 12,000 new units that are expected to become available within the next few months.
Angelou also expressed concern regarding a possible shortage in single-family homes over the next few years, as housing starts are expected to be half of what they were in 2007. The good news, however, is the Austin housing market is still looking better than other major metro areas. In Detroit, for example, Angelou reported that 40% of the homes sold in 2008 were sold for less than $40,000.