For years now, headlines about corporate relocations and expansions in the Austin area have peppered news feeds. Companies are moving to the Austin area to take advantage of a favorable business climate, relatively low cost-of-living and an abundance of lifestyle options. As a result, Austin has had steady job growth and has lead the nation in population growth. A continued interest for companies to relocate or expand in the Texas capital means continued job and economic growth. Recently, Austin has been ranked one of the top 10 U.S. cities for corporate relocation and expansion which signals a likelihood that the local economy could make stable gains as the metro recovers from recent shelter-in-place orders.
Austin Among Top U.S. Metros for Corporate Relocations and Expansions
Site Selection is a magazine that publishes information for expansion planning decision-makers. Their goal is to help expansion planners do a better job. To that end, they recently ranked major U.S. metros for the number of corporate relocation and expansion projects they landed in 2019. In order to qualify for the ranking, projects must have a minimum investment of $1 million, create at least 20 new jobs, or involve at least 20,000 square feet of new space. Austin took the 6th spot in the ranking of U.S. metros with at least 1 million residents.
A couple of notable projects mentioned by Site Selection were Outdoorsy and Apple. Outdoorsy is a San Francisco-based RV rental company which moved to downtown Austin. Apple has recently broken ground on its well-publicized $1 billion campus which is estimated for completion in 2022.
Austin is the Fastest-Growing Large City in the U.S.
Last month, Austin made headlines when it was announced that the city was the number one fastest-growing large city in the U.S. The designation is a testament to the economic stability and job growth that the Austin area has experienced during the time of economic recovery from the Great Recession. It’s also a good sign that the local economy is likely to make a stable recovery from a recession, as population growth is a sign of local economic growth.
According to a report in the Austin Business Journal (ABJ) about the census data, the estimated 61,586 increase in the Austin metro population from mid-2018 to mid-2019 equates to about 169 people added per day. Breaking the numbers down to a daily average shows that 128 more people moved to the metro per day than left it. Between 2010 and 2019, the Austin metro added more than 510,000 people which makes it the eighth-highest rate of raw growth in the nation.
The second-fastest-growing county in the nation borders Austin on the south. During the same period, Hays County added an estimated 73,088 people. It calculates to a rate of nearly 47%. The Hays County figures are not surprising since the bulk of the Austin metro population growth has been happening in the suburbs.
Austin Area in a Recession
A ranking of the most recession-proof U.S. cities showed that the Austin economy is among the top cities to withstand a recession. In the ranking, the financial technology company SmartAsset cited Austin’s strong job growth, low unemployment rate and an extremely low percentage of public relying on assistance programs. Additionally, the Austin economy is supported by a diverse set of industries. This helps because recessions typically don’t affect all industries the same.
David Brodsky, broker/owner of David Brodsky Properties, explained what makes the Austin economy unique right now.
“Our economy isn’t reliant on any one major industry and we’ve been able to learn from mistakes we’ve made in the past – like during the downturn in the 80s,” Brodsky said. “Those things have helped us to prepare for periods of economic decline. I think our state officials have done a very good job of growing our economy to a point where we can weather an economic storm.”
As the Austin area continues to adjust to the precautions taken to thwart the spread of coronavirus, many experts remain optimistic that the local economy will be able to make a strong recovery after businesses reopen. The recovery from the mortgage crisis in 2008 is a good example of how Austin might fare during the period of rebuilding after shelter-in-place regulations are lifted.
Mark Sprague, state director of information capital for Independence Title, shared his economic insight in a report released by the Austin Board of REALTORS® last month.
“Austin’s economy has diversified and strengthened over the past two decades. This leads me to be optimistic that our region is in a strong position to withstand economic downturns that may have a greater impact nationally,” he said.
Sprague went on to explain that his optimism for the Austin economy doesn’t mean that there won’t be some damage done. “Effects will still be felt, especially by those who depend on each paycheck to pay their bills and provide for their families, and that cannot be discounted.”
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