Austin Keeps Rolling
- December 21, 2011
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Lots of good economic news in the city of Austin lately.
- Formula 1 is back on track. There’s some debate, locally, about the value this has for Austin’s economy, but it is clearly a net-positive for the next 10 years. Perhaps not coincidentally, a couple of new hotels are scheduled to be built downtown over the next couple of years.
- The Samsung plant in Austin is producing the A5 chip for Apple. This was a massive investment from Samsung in local infrastructure ($3.6B). Those of us following the news in Austin a few years ago probably recall what a close decision this was for Samsung. It was the biggest investment in chip manufacturing capacity since the heydey of silicon in Austin. These days, Austin is more of a hotbed of design than manufacturing. As I understand it, Austin is Samsung’s second largest infrastructure investment – and the largest outside of South Korea. People often forget how much is manufactured in the US in general – but this kind of high-tech component is particularly unusual to be manufactured onshore.
- Austin is attracting more early stage investments than other parts of Texas. $280M in Austin alone last quarter. Fifty Austin companies received funding. This reminds me of the 90’s in Austin. There have always been complaints about it being much harder to raise money in Austin than in the Valley, and perhaps it is. But it clearly is easier in Austin than it is in many other parts of the country.
- It looks like the “best performing cities” are moving to Texas…
- The unemployment rate nationally recently dropped to 8.6%. But in Texas? 8.1% (down .3%). A half-point better than the country as a whole. Austin, however, is a full point lower still, at 7.1% – 1.5 points lower than the national average.
So it appears to be a good time to be bullish on Austin. But if you’re just now noticing, you’re late to the party. All through the downturn, it seemed clear to those of us who live here that Austin was building up, slow and steady, a diverse and growing economy. I’m looking forward to going to the Angelou Economic Summit in January – there are typically some key insights into how the local economy has been performing, and this year should be particularly interesting.