Job growth echoes boom years
Central Texas adding positions at clip not seen since 2000; average of wages climbs 7 percent.
March 05, 2006
After four years in the doldrums, the Central Texas job market roared back to life in 2005.
Employment growth last year was almost twice as strong as previously thought, rising 4.5 percent, according to estimates by the Federal Reserve Bank of Dallas.
That's more than double the state average of about 2.1 percent, and far ahead of San Antonio, Dallas and Houston. It's the strongest growth since the 1998-2000 high-tech boom, when jobs in the region were growing at about 6 percent a year.
Paychecks also grew, with the average weekly wage jumping 7 percent to $839 between September 2004 and September 2005.
The job growth came across the economy, from fast food to construction and high tech to health care. It reflects a surge in retail development that saw outdoors retailer Cabela's Inc. hire 450 people in Buda and a new Sears Grand store, 30 miles up Interstate 35, hire more than 100.
State government, the region's second-largest employment source, added jobs in social and health services as state regulators beefed up children and adult protective services.
The five-county area added 30,300 jobs, the Dallas Fed estimates, not the 15,500 originally thought.
If the Fed is correct, it would be the first time the total number of jobs topped 700,000 — well ahead of the previous annual high of 674,100 set just after the peak of the tech boom in 2001. The Federal Reserve tracks and forecasts the overall economy, relying on information from the Texas Workforce Commission, which gathers the data on jobs.
The Workforce Commission will release updated figures on total employment for 2005 on Thursday. Initial estimates, collected monthly, indicated that Travis, Williamson, Hays, Bastrop and Caldwell counties ended 2005 with 689,500 jobs.
Actual payroll data for specific industries is available only through Sept. 30. Still, it provides solid evidence about where the growth was last year.
The sectors adding the most jobs between September 2004 and September 2005 were retail, employment services, restaurants, local government, state government, health care and construction. Combined, they added almost 18,000 jobs.
Not all paychecks are created equal, of course. Nearly one-third of the new jobs are in retail, employment services and restaurants, where the pay is far below the regional average.
Workers have been battered by five years of layoffs and sparse hiring that put wages on ice after the heady days of the Internet boom. Average pay in Central Texas plunged from $787 a week in the third quarter of 2000 to $747 two years later.
The 2005 figure of $839 is 6 percent below the 2000 level when adjusted for inflation. But it's progress.
"Last year, things started to catch up," said Chad Macy, Central Texas managing director at staffing company Spherion.
"We've been warning some of our more established customers that the day is going to come when it's going to turn around. It's here. Some of them are having difficulty finding the right candidate."
Hot jobs include accounting, help-desk and technical support workers, project managers and some software programmers, Macy said. Industries with high demand include financial services and health care.
The data show Central Texas is "poised for incredible growth," Macy said. "We have more demand from clients in all segments than we know what to do with."
Unemployment has been steadily waning, to below 4 percent in December, although that's well above the 2 percent low reached during the tech boom.
But the bigger change is in underemployment. Austin is known for having a large pool of well-educated workers who often will accept lower wages in unglamorous jobs to stay in the region. This decision also is fueled by weather, lifestyle and opportunity.
Many, including some of the nearly 25,000 workers who lost tech jobs, took whatever they could find. Some chip designers drove cabs and worked in gas stations. They're going back to work in their chosen fields, Macy said.
"Last year, we started to see people who took low-paying jobs just to make it start to leave positions they were in, so you started to see companies use temporary staffing to fill the gaps," he said. "And there are large increases in direct hires now that people have started to be paid well again.''
People are again moving into Central Texas in large numbers, predicted Ryan Robinson, the City of Austin demographer. Even through the downturn, people moving to Central Texas outnumbered those who left.
Robinson estimates the population in the five-county area will climb 3.4 percent this year to nearly 1.45 million. That would be the highest growth rate since 1999, when the number of residents rose 4 percent to 1.25 million.
Which areas saw growth?
Significant job growth occurred in these sectors from September 2004 to September 2005:
•Construction added 1,831 jobs, nearly half of them in road building, spurred by projects such as the Texas 130 toll road. Architectural, engineering and related services, added another 793 jobs, up 8 percent from a year earlier.
New-home starts set a record for the fifth consecutive year, jumping 22 percent, and appear poised for more growth.
"There is not excessive inventory for buyers to absorb," said Harry Savio, executive vice president of the Home Builders Association of Greater Austin. "It should not be a surprise that the need for more homes and the jobs to build them follows."
•Retail hiring spiked 11 percent, an increase of 3,420 jobs. Clothing stores added 1,024 jobs, with another 536 at department stores and 503 at sporting-goods, hobby and music stores.
With more than 93 percent of the region's retail space leased, the Austin area had the highest retail occupancy of any major Texas city in 2005, according to the Austin office of The Weitzman Group, a Dallas-based commercial brokerage.
During the third quarter last year, the retail sector added 2,840 jobs compared with the same quarter in 2004.
New retail centers included Wolf Ranch, an outdoor shopping center at Interstate 35 and Texas 29 in Georgetown. Other retail jobs came with the opening of the Sears Grand at Parmer Lane and I-35 and four more Wal-Mart Supercenters.
•Health care employment increased 6 percent, or 2,124 jobs, nearly half of which came at surgical and specialty hospitals such as the Hospital at Westlake Medical Center, which opened last fall.
Home health care businesses also "really had a resurgence," said Preston Gee, senior managing director of Phase 2 Consulting in Austin. Employment climbed 371 jobs, or 9 percent.
The industry, Gee said, is recovering from troubles in getting reimbursement from Medicare and the consolidation of businesses that followed.
Doctors' offices added 662 jobs. "Even with the increse in the number of physicians here, we continually have new ones coming here," Gee said.
•Federal Sarbanes-Oxley regulations that mandate more thorough financial reporting by publicly traded companies led to more than 300 new accounting jobs, a 15 percent increase.
"It created tremendous demand for internal auditors, and external auditing companies are now hiring again," Macy said.
•Government jobs remained the single-largest source of Central Texas employment, because of state government, the University of Texas and rapidly growing local school districts.
Where the jobs are
Central Texas added more jobs last year than expected, and Austin led Texas cities in employment growth rate, according to Dallas Federal Reserve estimates.
Job growth
Austin 4.5%
Dallas 2.3%
San Antonio 2.4%
Houston 2.0%
Statewide 2.1%
Source: Dallas Federal Reserve
Industries that added the most jobs
Category Jobs added Precent change Pay
1. Retail 3,420 11% $474
2. Employment services 3,048 19% $483
3. Restaurants 3,045 6% $284
4. Local government 2,356 4% $737
5. State government 2,129 3% $801
6. Health care 2,124 6% $793
7. Construction 1,831 5% $823
8. Professional equipment 1,569 7% $1,634
(computer/peripherals
9. Architecture/engineering 793 8% $1,137
10. Building supplies 738 15% $674
Industries that lost the most jobs
Category Jobs lost Percent change Pay
1. Insurance carriers 701 10% $1,095
2. Building equip. contractors 568 5% $807
3. Nonresidential construction 355 9% $900
4. Misc. manufacturing 318 12% $696
5. Pharmaceutical/medical 242 12% $1,052
manufacturing
6. Special food services 210 9% $343
7. Medical equip./supply manuf. 207 13% $1,379
8. Federal government 192 2% $975
9. Computer/peripheral manuf. 189 2% $2,271
10. Business support services 188 3% $645
Largest industries in Central Texas
Category Employment Pay
1. Local government 67,659 $737
2. State government 63,332 $801
3. Technology 63,034 $1,734
4. Restaurants 50,269 $284
5. Construction 38,852 $823
6. Health care 37,578 $793
7. Retail 35,734 $474
8. Employment services 19,380 $483
9. Grocery stores 13,560 $429
10. Architectural, engineering 10,918 $1,137
and related services
Total region 704,300 $839
Top-paying jobs
Jobs added/ jobs lost Percent change Pay Percent change
1. Oil and gas extraction +523 +158% $4,211 +275%
2. Computer/peripheral mfg. -189 -2% $2,271 +7%
3. Internet publishing/broadcasting -49 -25% $2,058 +43%
Lowest-paying jobs
1. RV parks +47 +54% $249 +1%
2. Fast-food restaurants +1,159 +5% $255 +8%
3. Bars +107 +4% $261 +13%
Source: Texas Workforce Commission
Notes pay figures are weekly averages.
DOWN-UNDER DEVELOPER SCRAPES SKYLINE
AUSTIN– Constellation Property Group of Australia has contracted to buy the three-acre site on the southwest corner of Red River and East Cesar Chavez streets, across the street from the Austin Convention Center. Sellers are local developers Perry Lorenz and Robert Knight.
The development firm plans a $250 million project to transform the skyline along Town Lake by building two 30-story skyscrapers, one a luxury condominium tower and the other a hotel. The project also would include ground-floor retail and an eight-story office building.
Constellation President Eugene Marchese said he expects to close the land sale in September. Construction is slated to start mid-2007 and be complete in 2010.Marchese estimates one-bedroom condos could start at about $350,000; two-bedroom units between $400,000 and $500,000; and upper-floor units could range from $1.5 million to $2 million.
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RESIDENTIAL TOWERS TRANSFORM AUSTIN SKYLINE
Two new downtown projects are raising the bar for residential development at least as far as height. One will be 24 stories and the other 28 — twice as tall as the tallest recent project.
Zom Development will break ground on a 24-story high-rise at 805 W. 5th Street on land now occupied by Miguel’s Imports. The tower will include 290
apartment and townhouse units, more than any other development in the downtown area.
MetLife Inc. has filed plans to build a 28-story apartment tower at 101 Colorado St., currently a drive-through bank location. It will have 196 apartments and 6 town houses along Cesar Chavez St.
Taller buildings fit with the city’s push for downtown density. “Downtown is the one location where it seems that both the city and the development community are reading out of the same playbook,” says Charles Heimsath, a local real estate consultant. Heimsath says that even with all the projects in the pipeline, he is not worried about overbuilding. He says there is demand for 300 to 400 new residential units downtown each year.
CREEKSTONE PARTNERS INVESTS IN AUSTIN
Creekstone Partners has purchased The Reserve at Walnut Creek, a Class-A multifamily property. The 14-acre property is located in the middle of Austin’s Walnut Creek Business Park, and has 284 one- and two-bedroom garden-style apartments ranging from 730 to 1,250 square feet. The property was purchased from a group of investors that included Creekstone Builders. Allianz Life Insurance Company of North America provided the financing.
SOUTHPARK MEADOWS GROWS, GOES MIXED-USE
Endeavor Real Estate Group started with a plan for a modest retail outpost along I-35 south of Austin. The project has now become a 425-acre mixed-use, master-planned development which will include hundreds of homes, apartments and offices with nearly 1.6 million square feet of retail and restaurants. Southpark Meadows, Endeavor’s most recent endeavor, is planned for I-35 and Slaughter Lane.
The first phase of the retail portion will open next month with a Wal-Mart Supercenter and a Petsmart. Work will begin on phase two, which will include retailers Circuit City, Bed, Bath & Beyond, Rooms to Go and Ashley Furniture, in late May. Several other retailers and restaurants have signed letters of intent.
Southpark Meadows will be fully built in three to five years. The development will reach from Slaughter Lane to Old San Antonio Road and stretch west to South First Street. Recent additions to the development include 143 acres that will be part of a 221-acre residential and commercial segment.
Buildings will feature Hill Country limestone storefronts and landscaping to preserve trees once a part of the former Southpark Meadows concert venue. Five acres of park space will include plazas, a fountain, a pond, playscapes and jogging trails.
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