Date: November 11, 2011

Buoyed by San Antonio's relative economic strength over the first three quarters of this year, local leaders are optimistic that the Alamo City will continue to see moderate growth through the rest of 2011 and into 2012. But there is a growing sentiment that for San Antonio to reach its full potential, it will have to double up efforts in workforce development.

"We are going into 2012 with momentum," says Travis Tullos, project analyst for Austin-based economic research firm TXP Inc. "There is nothing on the radar screen to (negate) that momentum. There is nothing with regard to the national picture that would suggest we would see that momentum blunted moving into 2012."

If the Alamo City can continue to build momentum, more companies could look to expand in or relocate to the region. The recently released Greater San Antonio Chamber of Commerce's new Economic Trends report for the third quarter of 2011 shows more improvement in a number of key areas. For example, the Greater San Antonio area collected $22 million in sales tax revenues per month on average between April and September of this year. That compares with a monthly average of $20.5 million during the same period the previous year.

"You can't argue with that," says Tullos, who authored the new Trends report. "It does provide an indication of consumer confidence."

Stayed on track

There are other indications that San Antonio is headed in the right direction economically. From April through September of 2010, San Antonio's average monthly job count totaled more than 855,000. That's up from a monthly average of about 844,200 jobs during the same six-month period in 2010, according to the new report.

The biggest spike in employment was in the education and health services sector, where the average monthly job count increased from about 128,300 positions between April and September of 2010 to more than 136,000 during the same period in 2011.

San Antonio is expected to get a big economic lift from the Eagle Ford Shale play. A study released by the University of Texas at San Antonio in 2010 projected that the oil and gas play would create fewer than 4,000 new jobs in the Alamo City by 2020. The author of that economic impact study, UTSA Senior Economist Javier Oyakawa, has since revised that projection. He expects the total new job count for San Antonio with regard to Eagle Ford Shale will now reach at least 6,000.

"The most obvious immediate source of potential future growth is the development of the Eagle Ford Shale and the evolution of San Antonio as a headquarters city for companies participating in that development," says Dr. Richard Butler, professor of economics at Trinity University.

Butler says San Antonio has opportunities in other areas, as well. "There are some interesting possibilities of bringing more commercial work to the local aerospace industry, and for continued growth in our IT sector," he says.

Greater Chamber President and CEO Richard Perez says the new Trends report "shows that our region has stayed on track and has potential for continued growth, although moderate, for the rest of the year and into 2012."

Sharpened axe

Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas, addressed the Texas Economic Development Council last month, telling those assembled, "Texas was last into the recent frightful recession and one of the strongest coming out."

Fisher did add that Texas finally "caught the recessionary flu" in the fall of 2008. But he says the Lone Star State "recovered quickly and at a faster pace than the rest of the nation." Tullos says companies that are interested in expanding or relocating operations still see Texas, and San Antonio, as greener pastures compared with other parts of the country.

"I don't see anything that will make us less competitive," says Tullos, explaining that those companies which have already invested in or made a move to this region did so with the expectation of long-term economic stability.

"We've done better than most in the recession because we have a very diversified economic base, a lot of which (military, health care, IT, even the visitor industry to a degree) does not experience the wide swings of the business cycle much of the rest of the country lives with," Butler contends.

The biggest challenge over the longer term will be to redouble our efforts to educate and train the workforce of the future," he adds. "We have some outstanding individual workforce development programs ... . But we'd be wise to do much more."

Tullos agrees.

"What the region needs to do is to look more sharply at human capital," he says. "We need to look at ... where we can do more. We need to sharpen our axe."

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