San Antonio economy is gaining strength, say city officials
Texas economist Travis Tullos says the U.S. economy is gaining some traction, but remains fragile.
Tullos is more optimistic about the situation in Texas, particularly San Antonio, which he believes could gain some important economic momentum in 2011.
“We’ve gone through a really tough time as a nation,” he says. “But San Antonio has weathered this rather well.”
Local leaders are optimistic that San Antonio can gain additional traction and attract more opportunities as a growing number of people and businesses recognize what the region has accomplished in spite of the nation’s struggles.
That optimism is based on a number of factors. High on the list: An improving employment outlook.
Tullos, a project analyst for TXP Inc., an Austin-based economic analysis and public policy consulting firm, has authored a new Quarterly Economic Forecast for the Greater San Antonio Chamber of Commerce.
That report takes a six month average of data through March of this year and compares those results with averages from the same period the previous year.
For example, according to Tullos’ new report, the San Antonio metro area had an average of 842,500 total jobs over a six-month period ending on March 31, 2011. That’s a 1 percent improvement over the average job total from the same period ending in 2010.
Sales tax revenues are another strong indicator of a region’s economic health.
The new Quarterly Economic Forecast report indicates that the San Antonio metro area collected an average of $21 million per month over the that same six-month window ending in 2011 — a 5.8 percent increase over the six-month average the prior year.
Texas Comptroller Susan Combs says her office collected just under $1.9 billion in state sales tax revenue in April — 11.4 percent more than it collected during the same month in 2010.
“This is the 13th straight month in which state sales tax revenue has increased,” Combs says. “Business spending in sectors such as the oil and gas industry helped boost sales tax collections. Tax revenue from retail spending also showed growth.”
Swinging for the fences
The recession wreaked havoc on the housing industry across the U.S.
But there are some good signs on that front, as well, in San Antonio.
According to the new TXP report, the average price for a new home in San Antonio has increased 2.8 percent based on the six-month formula — up to nearly $191,000.
There has been a feeling among local leaders for some time now that San Antonio might have a head start on a number of other cities with regard to economic recovery.
“Because we came through the recession in relatively good shape, this has put San Antonio in a good position to take advantage of many growth opportunities instead of focusing on recovering from the decimation of a very deep recession,” says Steve Nivin, director of the SABER Research Institute, a local economic think tank.
“The down drag (nationally) had an impact on San Antonio,” Tullos explains. “But now it’s proving minimal compared to the momentum we see.”
Greater Chamber President and CEO Richard Perez says San Antonio is gaining important ground on some cities that are still dealing with a recessionary hangover.
“We’re not sprinting yet, as far as our economy,” he says. “But we are starting to jog. We’re getting stronger and stronger.”
Perez, using another sports metaphor to hammer home his point, adds, “Compared to other cities in Texas, we are knocking it out of the park.”
Perez does have some concerns, such as escalating violence south of the Rio Grande River. While Mexico long has been an important component in San Antonio’s economic mix, it’s difficult to predict how the violence in that country might impact the Alamo City long-term.
Tullos says other world events have cast some shadows over this nation’s economic outlook.
“The catastrophe in Japan will send that hard-hit economy — the globe’s third largest — back into recession,” Tullos predicts. “And it has disrupted global supply chains ... .”
Instability in the Middle East is a separate concern.
“If oil prices remain at current levels through the end of the year, U.S. consumers will spend nearly $100 billion more to fill their gas tanks this year than last,” Tullos warns.
But Tullos says San Antonio is headed in the right direction.
While he gives the national economy a grade of C+, he gives San Antonio a B+.
The hospitality industry is one of the sectors driving up optimism locally.
The TXP report notes that the number of delegates attending conventions in San Antonio grew from 107,739 during the six months ending on March 31, 2010 to 152,467 during the same six months this year.
Local leaders cite the Eagle Ford Shale oil and gas play, which stretches across much of South Texas, as another reason local leaders are encouraged about the city’s economic outlook.
At a minimum, Tullos expects that the Eagle Ford Shale action will have “a psychological impact” that further enhances the San Antonio economy.
“It’s another great opportunity for us,” says Perez about the Eagle Ford Shale. “We are the front door to all of that activity.”