Published on February 8th, 2017 | by Kate Harrington
Austin’s Economic Growth Continues for 2017, But Affordability and Mobility Must be Addressed
AngelouEconomics’ annual economic forecast has become a fixture for the Austin business community, and this year economist Angelos Angelou had a fairly sunny outlook for the year ahead: the economy will grow, albeit at a slower pace than in the past.
At the annual economic forecast and web conference hosted with the Austin Business Journal, Angelou predicts that more than 100,000 new residents will move to Austin in the next two years, and that the area will grow local employment by more than 3 percent in 2017 and 2018.
Angelou noted that the economy in general is cooling off, but that Austin will remain relatively strong.
“Cooling off is good news for us. It will hopefully lead to housing and labor markets catching up with demand,” he said.
Drilling down into job growth numbers, Angelou said that trade, transportation, and utilities will be the fastest-growing areas over the next two years, with more than 1,000 new jobs forecasted in those industries.
But Austin’s current challenges – affordability and mobility – will continue to be the fly in the ointment, he said. Real estate, both commercial and residential, remains more expensive in Austin than in other Texas metro areas.
Wages in the region have hovered between 3.8 percent and 0.3 percent, while home prices have increased by 7 to 8 percent each year over the past three years. On the commercial side, Austin’s office space averages $34.83 per square foot, and its industrial space averages $9.27 per square foot.
Austin’s traffic congestion, the seventh-worst in the U.S., is a major hurdle to economic growth, Angelou said. Investment is a must, he said, in a variety of transportation infrastructure.
“Housing affordability and mobility are our biggest challenges,” Angelou said. “How we address those issues is going to impact how long a boom we will have. If we fail to make those investments, then I fear our economic development could come to a halt.”