In January of 2016, employment in the Austin metro had grown by 4.5% year over year. By December of 2016, year over year employment growth had slowed to 3.3%. As of October 2017, year over year employment growth slowed further to 2.2%. Throughout much of 2016 and 2017, job creation in the Austin metro area remained positive, but it was steadily declining. Moreover, it was falling well short of the high rates of growth seen in previous years.

At CAPCOG, we observed this trend and decided we should dig into the data a bit more. Are we looking at the beginnings of a recession in the local economy? Are other metro areas in Texas showing similar signs of slowing down? And wouldn’t you know it – while in the midst of developing this post, the Bureau of Labor Statistics (BLS) released employment figures for November 2017, and for the first time in a while, they show a strong positive uptick – up to 2.8% employment growth year over year, compared to 2.2% in October. Now, one month’s worth of data doesn’t indicate a trend, but as we look at nearly two-year’s worth of data showing slowing job growth in the Austin metro area, it’s at least encouraging to see that sharply positive movement at the end of the line.

Which Sectors Are Driving the Slowdown?

With that context in mind, let’s look at the data more closely. The following figure shows year over year job creation rates across a range of industry sectors for the state of Texas and the Austin, Dallas, Houston, and San Antonio metro areas.

If one selects the Austin geography and scrolls through different industry sectors, it becomes apparent that the drivers of declining job creation rates in Austin are the Information, Leisure & Hospitality, Professional & Business Services, and Retail sectors. For example, the Leisure & Hospitality sector saw year over year employment growth rates fall from 8.3% in January, 2016 to 1.6% in September, 2017, before rebounding in October and November. The Professional & Business Services sector followed a similar trajectory – from 6.7% in January 2016 to -1.5% in September 2017, before posting stronger figures to close out 2017. Of note – the Retail sector does not show the same rebound at the end of 2017 that other sectors show.

The decline in the Professional & Business Services sector is particularly noteworthy, as so much of the recent economic success that Austin has enjoyed is attributed to this sector. It is also worth noting that statewide figures for job creation in this sector diverge from the Austin metro area’s experience. Each of the geographies shown in the figure show slowing job creation in the Professional & Business Services sector starting in January 2016, but Dallas, Houston, and San Antonio all show rebounding growth by at least summer of 2016. Austin’s continued decline in this sector indicates there may be factors negatively influencing the Professional and Business Services Sector in Austin specifically.

Some Possible Explanations

There may not be one single cause that neatly fits the data to explain why employment growth in Austin has slowed in the sectors outlined above, but let’s not let that stop us from speculating a bit.

Possibility 1: Low unemployment means the workers just aren't there

One possible explanation we’ll examine is the overall low rate of unemployment in the region. As of November, 2017, the unemployment rate in the metro area was 2.7%. Simply put, it is impossible to create jobs at the high rates the region has seen in previous years if there aren’t enough workers to take the jobs.

Source: Bureau of Labor Statistics

There are two easy arguments to make against limited labor availability as a sufficient explanation for slowing job growth, however:

• The positive uptick in job creation shown across multiple sectors toward the very end of 2017 isn’t reflected in the labor force or unemployment figures. In other words, if unemployment rates were driving the slowdown, there’s nothing in the unemployment data that explains the positive shift in job creation at the end of 2017.

 

• Job postings for the region are down for 2017, relative to 2016. Put another way, if positions were being created at the same rate and the problem was limited supply of workers, one would expect to see rising rates of available jobs being posted. Instead, we’re seeing the opposite. The Austin Chamber produces an excellent monthly report on regional job postings, for those interested in more information.

Possibility 2: Maybe population growth is slowing down?

It’s worth noting that these employment estimates are more current than our most recent population estimates. The most current Census estimates for the Austin metro area are from July, 2016.

Source: U.S. Census Bureau

It’s possible that population growth has slowed, and the population estimates have not caught up to the trend yet. If that’s the case, though, one might expect to see that trend reflected in the local housing market. Housing starts across the Austin metro area have been strong in 2017, though, at one point “reaching their highest level since late 2006,” according to the Austin American Statesman.

Possibility 3: Maybe the Austin job market is just not that special anymore?

Being without an easy explanation for what caused job creation in the Austin metro area to slow for most of 2016 and 2017, and without enough data to show a strong rebound on deck for 2018, let’s refer back to the employment growth graphic at the start of this post. The following table uses that data to compare growth rates in January 2016 to November 2017 for each of the geographies analyzed.

Let’s treat Houston as an outlier (albeit, a large one) because of low oil and gas prices, followed by Hurricane Harvey. Looking at the remaining geographies, each grew at quite similar year over year rates in November, 2017 - between 2.7% and 2.9%. Given the similarity of those growth rates, is it possible that the best explanation for slowing job growth in the Austin metro area is that the Austin economy is reverting to the mean? Have the competitive edges that fueled the Austin area’s rapid growth been blunted, resulting in an economy that looks less weird and more in-line-with-statewide-averages?

We’ll update this data visualization as new data are released, and with any luck, we’ll get a clearer picture of what trends are developing in the Austin area economy.* In the meantime, cross your fingers for a few more months of strong job growth.






* Or, Amazon will locate HQ2 in Austin, bringing opportunities for many and a whole slew of new questions for the region. One thing it will certainly do is significantly complicate trend lines for economic time series data.

This is the second post in a series discussing the work the Capital Area Economic Development District (CAEDD) has undertaken to examine workforce development training in the Capital Area. To read the first post, click here.

The 60x30TX Plan

The Texas Higher Education Coordinating Board (THECB) adopted a 15-year strategic plan in 2015, called "The 60x30TX Higher Education Plan." The overarching goal in the plan is that by 2030, at least 60 percent of Texans aged 25-34 will have a certificate or degree. Applying that goal to the Capital Area specifically, here's how the numbers stack up as of 2015.

Source: U.S. Census Bureau, JobsEQ, and CAPCOG Estimates

Looking at that data, a number of salient points jump out, specifically:

• Significant variation exists across the region today - from 27% in attainment in Burnet County to 61% in attainment in Travis County
• Travis County already exceeds the THECB target, the only county in the region to do so currently. However, Travis County also has more people outside of attainment of the standard than the rest of the region combined
• Only about 10,000 people between the ages of 25 and 34 currently live outside the 5-county metro area; the 5-coounty metro area is Bastrop, Caldwell, Hays, Travis, and Williamson counties
  

Workforce Development Training and Demographics

Seeing the figures for population and educational attainment across the region got us (the CAEDD) thinking again about the geographical distribution of workforce development training providers across the region. So we mapped them again. Only this time, we included additional data layers for comparison, including population density, job density, educational attainment, and activity centers from the CAMPO 2040 plan. That interactive map is embedded below. Click on the options in the dark grey bar across the top to change viewing options (e.g., change visible layers, turn the legend on/off, etc.). For a larger map, click here.

Some Takeaways from the Mapping

• Workforce development training resources in the region are concentrated in our dense population centers, especially along the IH-35 corridor. This pattern creates gaps in access to training programs for our rural residents.
• Solving the access issues for rural residents may require more creative solutions. Alternative training models (e.g., remote classes, online education, etc.) may help expand access and bring more of the region closer to attainment of the 60x30TX goal, without targeting excessive resources outside population centers. Of course, reliable broadband service is also a complicating issue for online class provision in rural areas.
• Making information about training opportunities more accessible may strengthen demand for the existing workforce training opportunities that are already present throughout the region. There is not currently a single (or even a short list) of online resources where one can find comprehensive information about available workforce development resources in the Capital Area. More work to make information about classes, apprenticeships, supporting resources, and other programs easier to find may strengthen the effectiveness of the existing training provider system.
  

One of the Boards that CAPCOG facilitates is the Capital Area Economic Development District (CAEDD), which convenes a group of elected officials, economic development practitioners, workforce development experts, and higher education leaders to coordinate responses to issues of economic competitiveness.

Recently, the CAEDD has been working to compile a snapshot of workforce development training providers in the Capital Area region. Because the region has two different workforce boards, multiple community college systems, and a vast array of apprenticeship programs, no single picture of available training resources is easily accessible.  As it turns out, compiling that picture was a challenge for CAPCOG staff as well. However, we did successfully create a database that includes the following:

• Training programs certified by the Texas Workforce Commission. This is the comprehensive list of programs that are eligible for funding and wraparound service support from area Workforce Boards.
• Community College and other job-training providers that offer programs aside from those certified by the Texas Workforce Commission.
• Apprenticeship programs registered with the U.S. Department of Labor

Use the drop-down menus in the visualization below to filter training opportunities by the type of training, the family of program, or by specific providers. More information about training programs is provided in the dynamic table below the map.

A few of the interesting findings evident in the visualization include:

• Computer and IT programs are heavily concentrated in Travis and Williamson counties. For one of the region's fastest growing sectors, geographic access to these programs is surprisingly limited.
• Apprenticeship programs, on the other hand, have fairly good geographical coverage. However, these programs are predominantly focused on the construction/trades sectors.
• In general, rural coverage and accessibility is lacking. This is somewhat understandable, given lower population densities in rural areas, but for those living in rural communities, access is a considerable hurdle.
  

The next post in this series will look at this same information in the context of demographic change and in light of the Texas Higher Education Coordinating Board's 60x30TX Plan. Stay tuned!

Recently, CAPCOG contributed to a conversation among regional stakeholders about how best to serve opportunity youth - generally defined as people between the ages of 16 and 24 who are neither in school nor working. A short summary of some of the analysis looking at youth in the region and existing employment information is provided below.

According to the 2015 American Community Survey estimates, there are roughly 270,000 people in the Austin MSA between the ages of 15 and 24. Broadly, they are distributed in a manner that mirrors the population of other cohorts in the region - with most living in Travis, Williamson, and Hays counties. The map below looks at a more granular level, showing the share of residents between the ages of 15 and 24 across the Austin MSA.

The region's universities stand out on the map - it's easy to spot the University of Texas, St. Edwards University, Texas State University, and Southwestern University as the bright red dots on the map. But the map also shows slightly higher shares of youth residents east of IH-35 in Travis County, in San Marcos and Kyle in Hays County, and in communities throughout Williamson County.

While finding employment is a critical component of discussions for how best to serve opportunity youth, that conversation quickly moves to finding meaningful employment. A key factor in the type of employment options youth workers have is their level of educational attainment. Of the residents between the ages of 18 and 24, about 37 percent have not completed high school (or passed an equivalency exam). The distribution of those residents is shown on the map below.

Social Impact Research estimated that the lifetime cost to the government - in terms of social service provision and lost tax revenue - per high school dropout is over $306,000. They estimate that individuals with a high school completion credential have lifetime earnings that are on average 109% larger than those that do not complete high school. Those figures, in conjunction with the deep pockets of low educational attainment shown in the map above, clarify the importance of addressing the region's opportunity youth challenge.

Given that context for where young residents are located, the figure below begins laying out the employment picture in the region. The figure shows the overall change in employment in the region between 2011 and 2016, segmented by industry sector. In other words, each dot corresponds to an industry group. The farther to the right the dot is on the chart, the more jobs that have been added in that industry in the past five years. The closer the dot is to the top of the chart, the higher the average annual wages in that industry. And the bigger the dot, the more people employed in that sector as of 2016.

The figure highlights one of the key trends affecting the labor market in the Austin area, regardless of age: the fastest growing job opportunities in the region are in high-wage industries (e.g., Professional Services) and low-wage service sectors (e.g., Food Services). This bifurcation of the labor market has all sorts of regional impacts, from equity issues to compounding our transportation problems, but it also contributes to the sense that it is difficult for young residents who do not take a traditional path (e.g., high school completion, a degree from a 4-year institution, etc.) to find middle-wage work. There are middle-wage jobs in our region - folks will argue about whether or not there are enough - but they are certainly not growing at the rate that high-wage and low-wage jobs are. This can make it difficult for young workers to feel as though they can "work their way up the career ladder."

Digging a bit deeper into this issue, the figure below shows specific occupations and the educational attainment level typically required to get hired in that occupation.

Once again, one sees rapid employment growth in occupations with no formal education requirement, as well as a few that require a high school diploma (i.e., those dots in purple and teal). Additionally, there is strong growth in those occupations that require a bachelor's degree (i.e., the orange dots), particularly those occupations in the computer and software fields. Middle-skill jobs however - those blue, pink, and brown dots - are largely absent among the fastest growing occupations.

So, how do we put all this together to say something about the prospects for opportunity youth employment in the region? In spite of slower growth in middle-skill occupations, there are reasons for optimism. The figure below shows expected employment demand over the next 5 years for individual occupations. The set of occupations analyzed has been circumscribed to only those that a) pay on average above $45,000 per year, b) are expected to demand at least 25 workers per year over the next 5 years, c) do not typically require professional experience, and d) typically do not require a bachelor's degree to be hired. The occupations shown have then been categorized according to the typical educational attainment required.

The heartening takeaway from this picture is that there are clearly certain occupations that are accessible to opportunity youth that are in demand in the region. Moreover, there is some variety in the kinds of occupations that are shown, which is encouraging because not every young worker will be inclined toward the same kinds of work. Electricians, computer support specialists, and nurses, for example, are all promising options for middle-skill youth.

The challenge to the region, and in particular the workforce development system, is how do we heighten awareness around these opportunities for young workers, how do we align services and supports to equip opportunity youth with the skills needed to get hired in these jobs, and how do we facilitate placement of young workers so that employers can find the workers they need and vice versa?

There is promising work underway among the many organizations in the region that are stakeholders in the workforce development system. Austin and Travis County have embarked on a Community Workforce Master Plan to help guide these efforts. Austin Community College and Texas State Technical College are providing classes to help make in-demand skills more attainable. One hopes that these efforts will continue and will scale to help the region rise to meet the needs of young workers.

Over the past 10 years, population in the Capital Area has grown by roughly 50,000 people per year. Noting how newcomers are changing Central Texas is an evergreen discussion topic, but one thing that newcomers and long-time residents have in common is that both buy food locally. And rapid population growth has been good for the Capital Area food industry.

Between 2011 and 2016, total earnings in food retail (primarily grocery stores and restaurants) in the Capital Area grew by nearly 51 percent. Earnings per worker grew by almost 15 percent. Estimated total sales for the food retail sector in the Capital Area in 2015 was just shy of $7.6 billion.[i] Put succinctly, there’s quite a lot of money being spent on food in the Capital Area.

But for all of the attention that goes to locally-sourced produce at grocery stores, farmers markets, and farm-to-table restaurants, it’s worth asking, “Just how much of what we eat actually comes from local sources?” And for those approaching this question from an economic development angle, “How many of those dollars being spent on food are staying in the local economy, as opposed to going to food producers elsewhere?”

To some degree, those figures aren’t surprising. After all, it is not particularly realistic to imagine that the Capital Area produces all of the food that it consumes. However, given the scale of the food economy in the region, it makes sense to explore the sector more to make sure we aren’t leaving money on the table.

If we focus on the food production segment of the value chain (assuming that more production is an excellent way to drive additional processing and distribution), a number of trends come to light. Most notably, the rapid population growth in the Capital Area, and in Austin in particular, has made land both a more scarce and a more valuable commodity. The following map illustrates the loss of agricultural land in Austin from 2006 to 2014. Specifically, the map shows a considerable portion of agricultural parcels within the City of Austin’s full-purpose and extraterritorial jurisdictions was redeveloped in just eight years (red parcels) versus preserved for agricultural use (green parcels). And while we only have the comprehensive GIS land use data to map this change for the City of Austin at this time, parallel trends are already taking place in many other communities near the Austin area. 

Looking at the implications for Austin specifically, the bulk of land being used for agricultural purposes lies to the east of central Austin, where productive Blackland Prairie soil reigns and prime farmland is abundant. But intense demand for new housing and commercial development and, in turn, increasing land valuations throughout Travis County have put financial pressure on the eastern margins for those engaged in agricultural production. The resulting loss of agricultural land is not surprising, given those conditions. It is, however, a trend that undermines years of food policy efforts by the City of Austin, including most recently the Food Access Resolution adopted in 2016. Looking forward, Austin must consider how to address the need for economic development in East Austin – as well as the citywide demand for additional housing stock – within the context of stated food system priorities. CodeNEXT, the re-write of Austin’s land development code, will be of critical importance in striking that balance. The Austin/Travis County Food Policy Board, for example, has advanced a set of recommendations for CodeNEXT to ensure the new land development code supports a sustainable local food system, including protecting agricultural land for food production.

Looking with a more regional perspective, many communities throughout the Capital Area have historical ties to food production and feature food as a key characteristic of the community (e.g., wine in Blanco County, locally-grown produce in Elgin, etc.). The following table shows regional sales in 2015 in the food production sector by county, highlighting the important role food production currently plays across the region.

Source: EMSI

As the map presented earlier illustrates, the development pressures on land currently being used for agricultural purposes are likely to continue spreading. Hence, local jurisdictions throughout the region need to plan out where they want this impending growth to occur as it reaches their communities, decide where they want to preserve land for food production, and then take appropriate policy measures to support those plans.

In short, the data show that there is substantial economic opportunity in the Capital Area’s food sector. As the population continues to grow, demand for food will only increase, and local production of that food offers the chance to keep more of those food dollars in the local economy. However, growth pressures tend to work against the viability of local food production by increasing land values and making redevelopment more profitable. Many of the communities in the region are committed to the idea of local food production. But more work is clearly needed to identify the best ways for the Capital Area, as an integrated region of both prolific rural areas and populous urban areas, to maximize its food production potential—and capture the resulting economic benefit.

Sources:
[i]: Economic Modeling Specialists International (EMSI)
[ii]: Ibid.

Every year, new jobs open up, and new people are credentialed to fill those jobs. But how close is the number of vacancies to the number of applicants? It turns out in the Austin MSA, the answer depends quite a bit on the type of job you're looking for.

The interactive graphic below shows occupation gaps (i.e., the farther left on the horizontal axis, the greater the oversupply of labor) according to average wages and education needed. You can also filter results by the amount of training, experience, and education required for individual occupations. Have a look below! (And once again, dots on the left are occupations with an oversupply of labor. Dots on the right have labor shortage - a gap).

Ever wondered how wages in the Austin Metro Area compare to similar regions? Us too.

The following graphic shows how local wages by major occupation group compare to a range of peer regions. Use the dropdown menues below the chart to select a comparison region and toggle whether or not the graphic controls for cost of living.

One note - the cost of living adjustment considers cost of living at a metro area scale. When controlling for cost of living, the Austin MSA appears to pay wages among the highest of the peer regions analyzed. However, some of this effect is driven by the low cost of living in many of the communities surrounding Austin and Travis County. Limiting the cost of living calculation to a smaller area, such as only the counties along the IH-35 corridor, would have the effect of bringing cost-of-living-adjusted wages in the region more in line with other peer cities.

There is a general understanding among Capital Area residents that the local economy is strong. One of the questions that flows naturally out of a period of robust economic growth is, “How long will this last?” A recent report issued by The Brookings Institute provides useful context for that question by examining what they’ve termed, “advanced industries.” Generally speaking, the Brookings Institute’s group of advanced industries includes high value sectors in manufacturing, energy, and services that utilize high-skill workers. These are industries thought to drive innovation and advance the technological frontier.

When introducing their advanced industries series, the Brookings Institute lays out several justifications for studying the specific advanced industries they identify. The authors note that “From 1980 to 2013, [economic output in] advanced  industries expanded at a rate of 5.4 percent annually—30 percent faster than the economy as a whole. Since the Great Recession, moreover, both employment and output have risen dramatically.” (1)  So one reason advanced industries matter is that they are highly productive sectors where new jobs are being created at great scale.

Another reason to pay attention to advanced industries is because these industries tend to pay high wages to workers. The same initial Brookings study notes that “In 2103, the average advanced industries worker earned $90,000 in total compensation, nearly twice as much as the average worker outside the sector.” (2) If we in the Capital Area are interested not just in job growth, but also in livable-wage job  growth, a richer understanding of the advanced industries creating high-wage jobs seems prudent.

Also, Brookings’ most recent update in their advanced industries research shows that while the sector continues to grow in aggregate, that growth is becoming increasingly concentrated in certain metropolitan areas. In other words, the forces driving the growth of advanced industries  are responsive to local economic conditions. This affords us the opportunity to look at advanced industries in the Capital Area in greater detail, with an eye toward understanding the existing landscape of advanced industries in our region and the factors influencing their growth.

To begin, advanced industries represent a sizable sector of the regional economy. The total value of economic output for advanced industries in the 10-county Capital Area was $27.8 billion in 2014—roughly a quarter of the region’s economic output. The sector is also growing in terms of employment. In 2005, there were 95,000 advanced industries jobs in the Capital Area, representing about 12 percent of all jobs in the region. By 2015, the number of advanced industries jobs had increased to over 131,000 and 13 percent of all jobs in the region. In the period between 2005 and 2015, advanced industries job growth accounted for 15 percent of all new jobs added in the region. Moreover, since the end of the Great Recession, advanced industries have been growing at breakneck pace. Between 2010 and 2015, the number of advanced industries jobs in the Capital Area grew by 37 percent.

Looking at advanced industries employment within the region, Travis and Williamson counties collectively accounted for about 123,000 (roughly 94 percent) of the region’s advanced industries jobs in 2015.  Advanced industries job growth in counties outside of Travis and Williamson has been slow, with only Bastrop and Hays counties adding more than 1,000 advanced industries jobs between 2005 and 2015. The distribution of advanced industries employment is important beyond county-level bragging rights. One key to mitigating our region’s traffic congestion involves increasing the density of jobs of all skill levels in areas outside of Austin and Travis County.

In addition to an uneven spatial distribution of advanced industries employment in the region, the number of jobs varies starkly across sectors within the advanced industries designation. There are five industries that account for 90,000 (69 percent) of all advanced industries jobs in the region: Computer Systems Design; Management, Scientific, and Technical Consulting; Architectural, Engineering and Related Services; Semiconductor and Electronic Component Manufacturing; and Computer and Peripheral Equipment Manufacturing. Moreover, nearly all of the employment growth in the Capital Area’s advanced industries is taking place in two sectors. Of the 36,000 jobs added between 2005 and 2015, the Computer Systems Design sector accounted for 19,000 of them, and Management, Scientific, and Technical Consulting Services accounted for another 11,000.Reasonable minds can disagree as to whether or not the Capital Area’s advanced industry employment is diversified enough. On the one hand, decline or challenges in one of these industries would appear to have the potential to cause significant economic hardship in the Capital Area. On the other hand, these industries are broad enough that it is difficult to imagine, for example, what a sector-wide downturn in Computer Systems Design would really look like. If the region has a diverse enough group of firms participating in these industries, that may be sufficient to insulate the region against sector-specific economic vulnerability.

Another question worth exploring, and one that also gets at the idea of sustaining employment growth, is whether or not the region’s higher education institutions are producing enough workers to supply these growing fields with workers. Between 2014 and 2015, the Computer Systems Design sector grew by about 3,700 jobs.  During the 2014-2015 school year, higher education institutions graduated only 1,841 students from programs designed to serve Computer or Mathematics Occupations. This gap, between jobs and the number of degree completions in the region, highlights why so many of the computer and technology firms in the region recruit nationally so aggressively. Alternately, employment in Architecture, Engineering and Related Services only  grew by 427 workers in 2015, while Capital Area higher education institutions produced 2,508 workers ready to enter that field. So, some fields clearly have more severe talent shortage issues than others.

The Brookings Institute’s most recent update ranks metro areas across the country on a range of advanced industries-related variables. The Austin-Round Rock Metro Area tends to rank favorably—somewhere in the top 20 out of 100  total metros, depending on the variable in question. It is no small accomplishment that the Capital Area’s economy competes so well against its national peers. However, the data also show that there are also challenges to be addressed in the region. Can we facilitate advanced industries job growth in areas of the region where more employment is needed? Can we insulate ourselves from over reliance on a few key sectors? And can we train enough local workers to fill many of the advanced industries positions that are being created? How we answer these questions will go a long way toward determining the health of advanced industries in the Capital Area in the coming years. 

This issue of Data Points looks at the Activity Centers identified in the Capital Area Metropolitan Planning Organization’s (CAMPO) 2040 Plan and examines the balance between development that creates new jobs vs. new residents in those Activity Centers.
 
As the Metropolitan Planning Organization (MPO) for the Capital Area, CAMPO is required to produce a long-range plan with a 25-year time horizon. The 2035 plan introduced the concept of Activity Centers for the region, and the 2040 plan refined those Centers somewhat, arriving at the map shown below.

s stated in the CAMPO 2040 Plan, “Activity Centers can increase the overall connectivity of the transportation system, particularly within Centers, and can increase choices among transportation modes and routes.” Put another way, the Centers concept aims to concentrate development in strategic locations in order to facilitate:

• Densities that enhance the efficiency of transit service

 

• Shorter commutes, as jobs are clustered but distributed more completely across the Centers in the region

 

• Minimization of sprawl, which is more costly (in terms of public sector finance) because of longer roadways, longer utility infrastructure connections, and so on.

Implicit in the Activity Centers concept is the idea that centers should feature a combination of development types, creating both jobs and residents and giving the Center as a whole a mixed-use functionality. Again, the argument in support of this idea is that if commuting represents the primary transportation activity for most Capital Area residents, locating more housing and employment in Activity Centers maximizes the efficiency of the transportation network that connects where people live and work.

Communities can support this kind of development through zoning designations. Tax incentives and density bonuses can be  offered to developers in order to encourage the desired development types within the Activity Center Area. The end result should be concentrated mixed-use development that is also aligned with transportation and transit plans, effectively marrying the planning of locations for home and work with the transportation network that connects them.

So, if that’s the theory behind the Activity Centers concept, it is worth examining how the region is putting that theory into practice. The following map shows the 2040 CAMPO Centers overlaid on top of Census Blocks that intersect the Center at some point. So, to examine trends in the CAMPO Center areas, we’re using the census data, with the orange census blocks shown in the map serving as proxies.

You’ll see that these proxy areas are a better fit with the Centers in some cases than in others. However, as the Centers can be assumed to reflect the bulk of development activity within the census block areas we’re using as proxies, there is reason enough to consider these proxy areas as instructive.

To examine development in the Activity Centers, this analysis focuses specifically on Jobs-Worker Balance. Jobs-Worker Balance compares the number of jobs located in a specific area  to the number of employed residents that live in that same area. The mathematical formula for computing the statistic is:

So what Jobs-Worker Balance tells you is, “how closely does the number of jobs in an area compare to the number of workers who live in that area?” Calculating the statistic using the formula above, a Jobs-Worker Balance of 1 indicates that an area is perfectly balanced between jobs and residents. A value of 0 indicates an area is composed entirely of either jobs or residents. This particular statistic does not differentiate between areas that are heavily job-centric or heavily resident-centric, but there are examples of both in the region, such as Downtown Austin or Austin Bergstrom Airport (heavily job-centric) or housing developments in largely rural areas (heavily resident-centric.)

Now, enough with context and methodology. Let’s get to talking about what the data show for our region, specifically, “What does the Jobs-Worker Balance look like for the Centers in the most recent data (2014)?” And, what can the data tell us about the trajectory of Jobs-Worker Balance in these Centers?”

The first of the two maps that follow shows Jobs-Worker Balance as of 2014 for each of the CAMPO Activity Centers. One point that stands out is the considerable variation in Jobs-Worker Balance across Centers. Some centers are near perfect balance, while others are nearly perfectly imbalanced. Many of the more balanced Activity Centers are in downtown areas of communities outside of Austin. For example, the crescent of communities in the eastern part of the 5-County region—ranging from Lockhart to Bastrop to Elgin to Taylor—all show very balanced Activity Centers. Communities along IH-35 to the south of Austin—Buda, Kyle, and San Marcos—also show very balanced Activity Centers.

Those Activity Centers in the region that are very unbalanced (shown in red) tend to be locations with high levels of employment relative to residential development. Downtown Austin, for example, shows to be very unbalanced. The Centers roughly corresponding to The Domain (SH-183 & Mopac) and Jollyville (Mopac & SH-45), are also job heavy locations. The Centers along the SH-130 corridor also appear as unbalanced, though the low levels of development in these Centers relative to some of the others, allows for small changes to have dramatic effects on overall Jobs-Worker Balance in the Center.
 
The next map shows the change in Jobs-Worker Balance over the 2005-2014 time period. Change in Jobs-Housing Balance is shown in absolute terms, rather than percentage terms. So, for a Center showing a change of 0.3, the interpretation of that change is that the Jobs-Worker Balance statistic increased by 0.3 over that time, which is not necessarily the same as a 30% improvement in balance. And, as the formula for Jobs-Worker Balance has a maximum value of 1, all positive changes can be interpreted as moves toward a more balanced Activity Center.

The prominence of Centers that appear in yellow (those showing improvements in Jobs-Worker Balance between 0.41 and 0.6) in the map is encouraging for numerous reasons:

• Large-scale shifts in Jobs-Worker Balance are hard, particularly for Centers that already have a great deal of development. Consider how difficult it would be, given the very low existing Jobs-Worker Balance, to dramatically alter the balance for the Downtown Austin Center. Improvements in balance in the range of 0.41 and 0.6 represent really significant shifts.
  

• Each county can claim Centers that are at least shown in yellow, indicating that this trend toward more balanced Activity Centers is taking place throughout the entire Austin MSA.
  

• Many of Centers that are less balanced than they were in 2005 have experienced massive population growth. If development· Many of Centers that are less balanced than they were in 2005 have experienced massive population growth. If development policies allow, it is reasonable to expect that, given the concentration of population that now exists in places like Hutto and Manor, more employment opportunities will follow the growth in population, eventually resulting in a more balanced Center.
  

On the whole, it would appear that the Austin MSA is doing a fairly good job of creating Jobs-Worker Balance within the CAMPO Activity Centers themselves. There isn’t uniform balance across all of the Centers— and there are Centers that are very unbalanced—but for a relatively young concept introduced in a planning document that doesn’t bind municipalities to any particular development pattern, the balance is encouraging.

Also, however, it’s important to note that these Centers are not necessarily indicative of whole communities. While the Center may represent the immediate vicinity surrounding the primary traffic point in a community, whether the community remains balanced beyond the Center is not shown on these maps. The Centers are an excellent start to smart growth policies in the region, but they are just that—the start of planning in order to effectively connect the region’s workers and employment locations.

As the population of communities surrounding Austin continues to grow, new regional job centers will emerge and grow as well. The best way for the Capital Area to remain on the fast economic growth trajectory it currently enjoys is to ensure that its workforce acts regionally, allowing workers to throughout the region to access their best job opportunities with minimal transportation constraints. Communities can support the development of that effective transportation system by taking a proactive role in managing development, encouraging development that is balanced in its creation of new jobs and residences, more densely concentrated in Activity Centers, and supporting regional transportation planning that connects these Centers through multiple transportation modes.

As the Capital Area works to address challenges related to middle-skill and middle-wage jobs, Data Points is taking a close look at the manufacturing sector, one of the key historical sources of  those jobs throughout the country.

Those job gains have come in across a wider range of manufacturing sectors, helping to diversify manufacturing employment beyond electronics and semiconductors.
And while total employment has declined precipitously from its peak in 2000, the number of manufacturing establishments has largely stabilized near peak levels. Following employment trends, establishments in Travis County are growing more diverse, operating in sectors ranging from food and beverage manufacturing (108 establishments in 2013) to fabricated metal and machinery manufacturing (132 establishments in 2013).

Turning from history to the future, how will manufacturing in our region continue to evolve? How will dynamics like rapid population growth, the rising price of land, and an increasingly diverse economy shape the region’s goods producing sectors? We may not have all the answers yet, but there are several interesting factors to consider.

First, the increasingly regional nature of the local economy has been a boon for manufacturing opportunities. While manufacturing of semiconductors and electronics components has declined in Travis County, it has blossomed in the rest of the MSA. Between 2001 and 2016 the First, the increasingly regional nature of the local economy has been a boon for manufacturing opportunities. While manufacturing of semiconductors and electronics components has declined in Travis County, it has blossomed in the rest of the MSA. Between 2001 and 2016 the number of jobs in that sector in the rest of the MSA grew from just under 3,000 to about 7,750—an increase of about 161%. Overall, manufacturing employment in the Non-Travis counties of the MSA has increased from 13,564 in 2001 to 18,659 in 2016.

Other efforts are also underway to strengthen manufacturing in the region. Texas Workforce Commission and Austin Community College are proving to be a powerful partnership to provide targeted skills development to companies in need of workers with specific manufacturing capabilities. Commercialization of research coming out of the University of Texas and Texas State has the potential to create new high-growth manufacturing companies in the region. And looking at future workers, House Bill 5 and an increased emphasis on technical/vocational training in high school offers a mechanism for training a  new generation of skilled manufacturing workers.

One seemingly large loss to the future competitiveness of manufacturing in the region is Union Pacific’s decision to pull out of the Lone Star Rail project. While there has been much discussion of that project’s potential benefits through the provision of commuter rail, the creation of a new freight line running through the eastern part of the MSA offered interesting potential for manufacturing in the region. The apparent loss of that potential feels like a missed opportunity to jumpstart manufacturing in a part of the MSA that is hungry for middle-skill job opportunities.

In short, manufacturing is no sure bet to be the provider of middle-skill employment opportunities in the Capital Area that it once was. However, there are reasons to be optimistic about the sector’s future, and working to identify opportunities to support manufacturing in the region may be  an economic development strategy that bears considerable fruit.