What a difference a year can make.
The Austin metro area regularly posts some of the country’s strongest economic growth rates, but a report last year raised questions about how broadly Central Texans shared in those gains.
This year, the same Brookings Institution Inclusive Growth Index showed Austin made a marked improvement on measures of economic inclusion, at least when compared with the country’s 100 largest metro areas.
Austin ranked 12th for the 2010-2015 time period covered by the latest index, up from No. 25 a year earlier, according to the report released this past week.
The difference: Data from an especially strong 2015.
“It was a banner year for inclusion outcomes for metro areas,” said Richard Shearer, senior project manager at Brookings’ Metropolitan Policy Program. “In fact, the top metro areas as a whole and on average saw huge increases in median wage, much larger than the nation as a whole.”
Of course, data can show a lot of different things when taken from different points in time. In fact, judging solely by the 2014-2015 data, Austin ranked fourth for inclusion, eighth for growth and 80th for prosperity.
One year of data comes with a lot of noise, Shearer said, but it does provide some indication of how economies ebb and flow. Various metro areas in the country recovered from the recession at different rates, with a generally slow job recovery and a pause before wages and median earnings began to climb again.
In 2015, median incomes finally started to improve after several years of decline, Shearer said. Metro areas saw especially big jumps, much larger than the nation as a whole. The same held true in Central Texas.
“All of the increase in Austin’s median income came in 2015,” he said. “From 2010 to 2014, it had actually declined.”
Shearer and his colleagues measure inclusion by changes in three metrics — median wage, employment rate and relative poverty (which is the share of people earning less than half the local median wage).
From 2010-2015, Austin was one of only 11 metro areas to improve on all three of those and the other six measures on the index, three each for growth and prosperity. Most of those were cities powered by research- and technology-intensive industries, the report noted.
Over the same period, Central Texas ranked second on growth measures and 12th on prosperity, and it posted similarly strong results from a variety of angles:
- Austin was one of only 14 regions to outperform the average metro composite score for each of growth, prosperity and inclusion;
- It was one of just seven metro areas to have median wages increase for workers with a four-year degree, some college or just a high school diploma;
- And it was just one of two metro areas to see young firms — those in business five years or fewer — increase their hiring by at least 20 percent. (Provo, Utah, was the other).
“Looking at the long period of time, Austin continues to perform better than just about any other place,” Shearer said.
But things can change from one year to the next. Last year’s data, which will appear in next year’s inclusion index, probably will signal some signs of moderation. Central Texas job growth, in particular, slowed as 2016 progressed, dropping from scorching to middling rates.
Preliminary, seasonally adjusted data from the Texas Workforce Commission showed that Austin-area payrolls expanded 1.9 percent in 2016, after four consecutive years of growth rates well above 4 percent.
The 2016 figures will be revised and benchmarked this month, and those adjustments typically reveal more growth than the preliminary data does. But it’s unlikely those changes will put Austin back at hyperspeed.
More likely, local labor experts have said, the region’s tight labor market will naturally slow job growth as companies, struggling to find workers, will have to raise wages, hold off on creating new positions or recruit workers from outside the area.
A glance at license plates on area highways reveals plenty of the latter — not so great for traffic and housing prices, perhaps, but generally a positive for a regional economy.
Central Texas “does have a good level of in-migration, and housing prices aren’t completely obscene yet,” Shearer said. “It’s not like you have housing process putting a ceiling on how much in-migration you can have, although the natives there might not appreciate it.”
Most indications suggest Austin will continue to see strong growth going forward.
“Yes, there might be one-year dips where prosperity takes a decline or inclusion blips,” Shearer said, “but for the most part Austin is on the right path.”