The 30th Angelou Economics Forum
Since 2009 I’ve been attending the Angelou Economics Forum at the Austin Convention Center. For 30 years, Angelou Economics has been providing the best insights into the Austin economy and its place in the overall economy of Texas and the US. Moreover, the forum has brought in amazing guest speakers and economists to provide a look into the near future.
In the past, the forum has correctly predicted that Texas, and Austin in particular, would be a safe haven during the financial crisis. And that Austin’s population would continue to grow at a double-every-twenty-years pace. The Austin economy continues to over-achieve, as predicted.
This year, the event lived up to expectations. Our newly elected Mayor Adler gave a quick introductory speech. He talked about improvements to City Council processes – including eliminating the late-night sessions (“nothing good happens after midnight” he says). What was interesting to me was his focus on process more than policy. That the council should have a process of leveraging committees and experts to research policies and solicit public comment before they come to a vote in full council. There are topics like transportation, parks, and education that will require the investment of time and expertise to get right.
Angelos Angelou was up next. He reassured us that despite the introduction, he isn’t running for office. After some opening remarks, he dove into the details.
The US data was strong, with 2.3 million new jobs in 2014, 1.7% growth, with a population growth of .7%. Signs of growth in the future: venture capital investment was up 47%, and 47,000 new businesses were started by his estimation. There’s reason to be optimistic, with GDP growth so high in Q2 and Q3.
Reasons for caution: growth rates outside the US are often moderating or decreasing. There are lots of risks in the system, but the US economy may be the best ship in a storm. He also pointed out that as our savings rate dipped from 6% to 4.4%, it leaves us more vulnerable to risks and fluctuations in the economy.
Transitioning to Texas. 397,000 new residents is a growth rate of 1.5% – double the overall US population growth rate. 344,000 new jobs is a 3.1% growth rate, not quite double the national rate.
On to Austin data…
He showed a chart that shows that since the recession, Texas is outperforming the nation by 3:1. But Austin is outperforming Texas by 2:1 over the same period!
Population growth was 66,000 – 3.5% growth, more than double the growth of Texas as a whole. Employment gained 39,000 jobs, or 4.5%. Housing starts were up 17%, compared to a decrease of 7% nationally.
Also interesting was a comparison of the drivers of the economy. The big new entrant for the Austin economy is the festival economy. Between F1, SXSW, ACL Fest, X games… Any one of which has an effect, but the year-round impetus of these events has created hotel shortages – and opportunities. The JW Marriott will bring over 1000 rooms into service this year, and thousands of additional hotel rooms are being brought online in the next 2 years.
According to Angelou, the Austin area is 1.97M people. The 11th largest city now, and closing in on San Jose. Expectations are that Austin could double again to 4M people by 2040. And the point is, what do you do about it, how do you plan for a city not of 2M, but of 4M… It is a big responsibility that has fallen on our current city leadership.
Concerns: lack of improvement in schools, affordability crisis as housing costs go up in excess of median income. This is a shorter retread of the conversation about cost versus value last year. Expecting 80,000 new cars on the roads next year. Traffic is a major concern for Austin’s future.
It is hard for me to believe Austin is on its way to being the 10th largest city in the US, but there it is. And in every respect it is a more varied and vibrant economy than it was when I moved here 20 years ago.
After Angelou’s talk, Tom Meredith gave a great motivational speech to those in the room. He painted a vision of what business leaders can do to achieve important changes in their companies, in society, and in Austin. I didn’t even take notes, I just enjoyed listening to a great talk. After hearing his talk, I’m ready to sign up for a subway system in Austin.