Despite headwinds, Austin job growth picked up in 2015


Central Texas growing larger and larger. A sharp downturn in the energy sector. The weak global economy and strong U.S. dollar whipsawing exporters. A labor market recovery helping other cities regain their competitive edge.

There are plenty of reasons to think Austin’s growth engine will cool to a more moderate pace, and yet it just keeps cruising along.

In fact, it re-accelerated in 2015. Local employers added 34,900 jobs last year, a growth rate of 3.8 percent, according to preliminary data released Friday by the Texas Workforce Commission.

That fell short of the metro area’s sizzling, 4-percent-plus payroll growth in 2012 and 2013, but it easily outpaced its 3.1 percent job growth in 2014.

“We have seen nothing but an increase in demand, and it’s across all industries,” said Melinda Alison, regional vice president at Robert Half, a global staffing firm.

Between the strong demand for high-skill workers and the lower-skill job creation needed to support a booming population, the Central Texas labor market has created both a healthy churn among its local workers and an alluring draw for out-of-town workers.

“We definitely have local folks who know the job market is really strong in Austin, and if there’s a better opportunity they’re moving to it,” Alison said. “But we also on a daily basis see people from out of town relocating here.”

The region’s rapid job growth is absorbing those incoming workers, the commission data show. The metro area’s unemployment rate fell to 3.1 percent in December, down from 3.3 percent the prior month.

While the drop in December stemmed more from people leaving the labor force rather than finding jobs, the number of employed Austin-area residents rose by more than 10,000 during all of 2015 — expanding faster than the labor force as a whole.

Those annual gains have helped push the regional unemployment rate down to levels not seen since 2001.

The commission doesn’t immediately adjust its data for seasonal trends, but calculations by the Federal Reserve Bank of Dallas put the Austin-area unemployment rate at 3.2 percent in December, down from 3.3 percent the prior month.

Statewide, the seasonally adjusted unemployment rate rose to 4.7 percent in December, up from 4.6 percent the prior month, the commission said. Nationally, the seasonally adjusted rate held steady at 5 percent.

In Austin, the annual workforce gains came despite a loss of 1,700 jobs in December, a typical seasonal decline, according to the unadjusted commission data. In this case, an unusually large surge in construction payrolls partially offset an unusually large drop in retail and leisure and hospitality jobs during the month.

Local employers in the mining, logging and construction industry segment — which is almost entirely construction in Austin — added 4,200 jobs in 2015, an 8.3 percent increase, according to the commission’s preliminary data.

That growth came as a welcome sign for local workforce experts, many of whom expressed concerns about the availability of middle-wage jobs for workers without college degrees. Goods-producing industries, such as construction and manufacturing, traditionally provided the bulk of those middle-class jobs.

But while the Central Texas’ population boom has pushed up home prices and construction employment in 2015, manufacturing employment took a tumble. Outside of state government, where payrolls ticked down slightly, manufacturing was Austin’s only industry segment to cut jobs last year.

Local factories slashed payrolls by 2.8 percent in 2015, a decline of 1,600 jobs, according to the preliminary data.

Many of those lost jobs came out of the Flextronics operations in North Austin, according to Ed Latson, executive director of the Austin Regional Manufacturers Association. The contract manufacturer scaled back last year after ramping up in 2013 and 2014 to support Apple Inc.’s launch of its new Mac Pro desktop computer, he said.

Austin’s semiconductor manufacturers also felt some weaker demand around the middle of last year. While the cooler market for semiconductors didn’t necessarily affect jobs at big producers such as Samsung and Freescale (now part of NXP Semiconductors), the chill did trickle down to some of their suppliers, Latson said.

And then there was the sharp drop in oil and gas prices, which hurt machinery and other energy-related manufacturers in Central Texas.

Yet even at its factories, the Austin metro area avoided the worst of the energy sector’s fallout. While manufacturers statewide cut payrolls by 4.7 percent in 2015, Austin’s factories cut 2.8 percent of their payrolls, according to the commission.

“We were one of the only regions to add jobs in 2014,” Latson said. “That strong job market is maintaining through this year. It’s just the losses in oil and gas and a small downturn in (semiconductors).”

Despite its stronger tilt toward advanced and high-tech manufacturing, Austin isn’t immune to the broader national and global trends that have reduced the number of factory jobs across the country.

In December 2000, factories in the Austin metro area provided 90,900 jobs, according to the commission data. That count dropped to 56,300 last month — a 38 percent decline in 15 years.


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