In recent weeks business in Washington, D.C. ground to a halt as record snowfalls pummeled the area and a sparring match over national health care reform hijacked the political conversation. But the nation's capital is getting something right: It is emerging from the recession better than any other major city in the country, according to research by Forbes.

Jobs in Washington are growing quickly, and in 2008 the city produced more in goods and services than almost anywhere in the country.

D.C. and nine other cities (among them: Boston, Los Angeles and a host of metros in Texas) are best surviving the downturn in part because they specialize in industries that are relatively insulated from economic volatility. Federal and state jobs all but guarantee the health of a local economy, and nowhere is there more government-related work than in Washington. The city has one of the lowest unemployment rates in the country, at 6.2%, and its output amounts to $362.3 billion, more than three times the average for the country's largest cities.

List: Cities Where The Recession Is Easing

It also saw a more modest slide in home sale prices than many other metros in late 2009. Cities where the recession's effects are lessening either never felt the full brunt of the housing crisis, or have proven resilient enough that demand is returning sooner than elsewhere in the country. These strong housing markets further enrich the local economy by feeding a host of secondary industries, like construction, lending and household services.

Uncle Sam as a Recession Shield
Government spending hasn't hurt Austin, Texas, either. It's the seat of state government and tied for No. 1 on our list of 10 cities best surviving the recession. Jobs have been lost nearly everywhere in the last three years, but between December 2007 and December 2009 the number of jobs in Austin rose by 0.98%; more than any of the other major cities we looked at. And by three years from now, jobs are expected to grow by 8.09%, the second-best job outlook on our list. Third on the list is Dallas, home to a thriving technology and energy sector, where jobs are projected to jump 7.19% in three years.

From Forbes.com

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Entrepreneur magazine's August issue ranks Austin the tenth-best start-up city in America.

The magazine's look at new business-friendly cities addresses issues such as government incentives, population growth, affordability of commercial rents, and openness to new ideas.

Entrepreneur calls Austin the "cross-pollinator" among the top 10 cities. The magazine cites the multiple "scenes" that shape Austin, from music to tech, and how they feed off of one another.

"Theoretically, people here are competing, but the opposite is happening," Bijoy Goswami, founder of Bootstrap Austin told Entrepreneur. "Part of that Texas ethos has percolated into the entrepreneur scene: People in Austin just treat each other well."

The magazine also highlighted Sweet Leaf Tea Co-founder Clayton Christopher as an example of one of Austin's brightest business minds. "There's a cachet attached to Austin," Christopher said. "It's the live-music capital of the world; it has good Texas values. Having Austin on our bottles has been a huge benefit."

The top ten cities in order are Las Vegas, Portland, Ore., Orlando, Fla., San Diego, Phoenix, Chapel Hill, N.C., Atlanta, Madison, Wis., Youngstown, Ohio, and Austin, Texas.

 From Austin Business Journal

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With a high-tech workforce of more than 54,500, Austin ranks 7 th on bizjournals' list of the nation's biggest tech cities. Texas' Capital City is home to over 2,660 tech companies, which employ an average of 20 employees each. Austin also has a relatively educated populace-11% of residents have a master's degree or higher. State government and the University of Texas also help make Austin a dynamic tech market.
(bizjournals.com , 5/11/09)

http://www.bizjournals.com/edit_special/79.html

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Forbes named the Austin metro as the best poised for recovery in its list of the 10 U.S. cities poised for a rebound (and the 10 cities with a long slog ahead). Many Texas cities are poised for swift recovery according to Forbes. Texas' economy is diverse, with heavy growth coming from education and health care in recent years and did not see the massive real estate bubble that formed in states like California, Nevada and Florida. Forbes' analysis also shows the importance of a city's economic make-up. Cities with robust technology sectors are poised for stronger recoveries than manufacturing or finance centers. Austin's diverse economy, home to Dell, the University of Texas and the Texas state government, has kept the economy strong. Forbes examined estimates from data provider Moody's Economy.com of the projected gross domestic product of metropolitan areas across the U.S., as well as unemployment figures from the Bureau of Labor Statistics and home prices, incomes and affordability data from the National Association of Home Builders.
(Forbes, 6/10/09)

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from the Austin Business Journal 

Austin is the best city in America to get a fresh start, according to a new report from Relocation.com.

The online moving service company ranked Austin No. 1 on its list of the best cities to start over and seek out new economic opportunities.

Relocation.com used the following elements to create its list: city "popularity" based on consumer requests for moving quotes to move to that city; economic-growth prospects; home affordability; and the strength of a community as reflected by volunteerism rates.

The top cities following Austin, in order, are Dallas; Charlotte, N.C.; Denver; Columbus, Ohio; Indianapolis; and Washington, D.C.; Atlanta; Oklahoma City, Okla.; and a three-way tie for 10th place between Houston, Seattle and Las Vegas.

"Studies have shown that many people don't like where they live," said Sharon Asher, chairman and founder of Relocation.com. "At the same time, a lot of people are looking for work, whether they're unemployed now or fearing layoffs. It's a scary time, but for some it might be a good time to think about starting over."

The full list and more details are available on the company's Web site.

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AMERICAN-STATESMAN STAFF
Thursday, June 04, 2009

The Austin area had the nation's strongest job market among big cities last month, according to data released last Wednesday by the Bureau of Labor Statistics.

Among the 38 metro areas with a work force of at least 750,000, only Austin gained jobs from April 2008 to April 2009, the bureau said.

It was the third month in a row Austin had earned that distinction.

Austin added 3,400 jobs in that period, a 0.4 percent gain that brought the regional job count to 781,400.

In January, Austin, Houston and San Antonio were the only large metro areas that had more jobs than a year earlier.

But Houston and San Antonio have been losing jobs since then.

Austin's job picture isn't all rosy: The area has been losing manufacturing and construction jobs at an accelerating pace, but those losses are being offset by gains in government, retailing and services fields.

Central Texas is holding up better in the recession than other technology hubs.

In April, the Silicon Valley area lost jobs at a 4.4 percent annual rate. Portland, Ore., was down 4.7 percent, Seattle was down 3.4 percent, and Raleigh, N.C., was down 3.3 percent.

Some smaller cities also racked up gains, including Midland, up 2.2 percent, and Odessa, up 2.9 percent.

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 Volume 31, Number 9 of The Neal Spelce Austin Letter http://www.austinletter.com/

When the Texas Legislature adjourns next week, this is certain:  Texas will have a balanced budget with no tax increases and there will a big increase in its Rainy Day Fund "savings account."  Look around you.  No other major state can make those claims.

Members of the Texas House and Senate will leave Austin next week after adjourning sine die 6/1/09.  They will not re-convene in Austin in regular session until January 2011.  Many of them will watch other states raise taxes, cut their budgets and plea with Washington for help.

Texas' competitor California is really struggling.  Just how bad is it?

Governor Arnold Schwarzenegger has just proposed borrowing $2 billion from California cities and counties.  The cities and counties squawked to high heaven because they, too, are cash-strapped.  The Governator made this proposal after voters last week overwhelmingly rejected a series of measures to help keep the state solvent.

While Texas has billions of dollars in its Rainy Day fund, California is facing a $21 billion shortfall.  And, in addition to raising taxes, officials there are talking about more and more cuts, including cutting about $600 million from colleges and universities.  Let this sink in.

When we say California is a "competitor" state, consider that California has an impressive higher education system.  One of the best in the nation.  And, even as we speak, you can bet UT Austin is ramping up recruiting efforts to siphon top flight professors from California.

California might look to Minnesota for a road map.  Minnesota was facing a multi-billion dollar shortfall.  But Governor Tim Pawlenty outmaneuvered his legislature after it sent him an outsized spending bill and a long list of tax hikes.  Minnesota already has one of the highest tax burdens in the nation, so Pawlenty said "we shouldn't raise taxes in the worst recession in 60 years" and said he will veto the tax hikes and, furthermore, taking advantage of a little-used provision in Minnesota law, he says he will cut $2.7 billion from the state spending bill to balance the state's budget.  He did this after the legislature adjourned last week.

Other states may not fare as well as Minnesota.  Let's look at how higher and higher state taxes are impacting many states - and, ultimately may benefit Texas - in the next item.

Americans know how to use the moving van to escape high taxes.  People, investment capital and businesses can leave tax-unfriendly states and move to tax-friendly states.  And they are doing that.

Other states are making their comparative situation with Texas even worse during these difficult economic times.  Arthur Laffer and Stephen Moore, writing in a new study for the American Legislative Exchange Council, pointed out the difficulties high tax states were having long before this current economic crisis.

The study, titled "Rich States, Poor States," found that from 1998 to 2007 more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Texas, Florida, Nevada and New Hampshire.

"Is it coincidence that the two highest tax-rate states in the nation, California and New York, have the biggest fiscal holes to repair," they ask.  "No.  Dozens of academic studies - old and new - have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses."

And now look what's happening.  Lawmakers in California, Connecticut, Delaware, Illinois, New Jersey, New York and Oregon want to raise income tax rates on the top 1% or 2% or 5% of their citizens.  In fact, the new governor of Illinois has proposed a 50% increase in the income tax rate on the "wealthy."

Or take New Jersey.  (Please!)  In the early 1960s, the state had no state income tax and no state sales tax.  It was a rapidly growing state attracting people from everywhere and running budget surpluses.  "Today its income and sales taxes are among the highest in the nation yet it suffers from perpetual deficits and its schools rank among the worst in the nation.  People are fleeing the state in droves," Laffer and Moore report.

Texas was singled out by the authors for its fiscal soundness.  And, as we noted previously, the Texas tax situation will keep its envied status for at least two more years, while other states are turning to even higher taxes to solve their fiscal instability.  "The Texas economic model makes a whole lot more sense than the New Jersey model, and we hope the politicians in California, Delaware, Illinois, Minnesota and New York realize this before it's too late," they noted.  At least Minnesota's governor took this advice last week.  But the other states have not followed suit.

And this is where Texas benefits economically.  Jobs will continue to flee these high-tax states for the foreseeable future.  And many of them will be created here - providing income and a decent living for those who live in Texas.

Much has been made of the fact that Austin is the only major metro in the nation to gain jobs during this downturn - and rightly so.  But where are those jobs being created?

Admittedly the increase in jobs in the Austin metro is small and the number of unemployed is higher than a year ago.  But, hey, it's the best job situation in the nation.  Given this, an examination of how this has occurred is timely.

The release last Friday of the April 2009 workforce numbers show that Austin's net job gain was 0.4% over April 2008, while Texas job totals are down 1.6% and nationally, the comparative numbers show a 3.8% loss.

In pure numbers, the Austin metro gained 3,400 jobs.

An analysis by Beverly Kerr, VP/Research for the Austin Chamber, shows that Austin's April-over-April net gain in jobs is due to a 3,900 gain in the government sector that compensated for 500 jobs lost in private industry.

Which Austin private sector segments are losing the most jobs?  Kerr said the highest rate of losses occurred in these three categories: natural resources and construction, manufacturing and wholesale trade.

As we have reported previously, government jobs are becoming more and more attractive in these uncertain times.  After all, most government jobs in Austin offer a high degree of security, an attractive health benefits program and solid retirement packages.  Other states may be cutting government jobs. 

Here, they are among the most sought-after.

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from Forbes.com

Unemployment is on the rise, credit is tight and consumers aren't spending - which means they aren't picking up and moving much, either. Very few places in America saw significant population growth in 2008.

Despite the overall economic slowdown, some parts of the country keep on moving ahead, attracting more and more newcomers - even if it's at a slower pace than in more sound economic times. These places still offer a semblance of stability, as well as great weather, cultural life and, in many cases, affordability.

Behind the numbers
To determine the fastest-growing metro areas in the country, Forbes used 2008 population estimates for metropolitan statistical areas with a population of more than 1 million, released March 19, 2009, by the U.S. Census Bureau. MSAs are geographic entities defined by the U.S. Office of Management and Budget for use by federal agencies in collecting, tabulating and publishing federal statistics.

Forbes then compared the 2008 population estimates to the previous year's data to see which areas had grown the most, percentagewise.

The cities that made the list share similar qualities: more business opportunities, better weather and more affordable housing. The top three areas according to the data are Raleigh, N.C., ranking first, which jumped 4.29% to nearly 1.9 million; Austin, Texas, which came in second, with a 3.77% increase to almost 1.7 million; and Charlotte, N.C., which moved up 3.36% to 1.7 million.

Click here to read more.

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 The Austin area reversed its recent job losses in February--actually adding 6,000 jobs during the month and dropping the local unemployment rate a tenth of a point to 6.3 percent.

Total non-farm jobs in the region stood at 773,100 in February, up from 767,100 in January, the latest report from the Texas Workforce Commission shows. Over the last year, the local area added 1,300 positions.

For the month, job gains were most significant in the sectors of government (up 3,100 positions); education and health services (up 2,200 positions); and leisure and hospitality (up 1,500 positions). The only sector to show a major drop in jobs was trade, transportation and utilities, which lost 1,900 jobs over the month.

Statewide job totals dropped by 46,100 positions in February. Over the last year, the state has experienced a net loss of 62,600 jobs.

The state's unadjusted unemployment rate dropped to 6.6 percent compared with 6.8 percent a month earlier.

"Texans are facing tough economic times now with significant statewide job losses," said Texas Workforce Commission Chairman Tom Pauken. "However, the Texas unemployment rate remains far below that of other large states and the nation as a whole."

The national unadjusted unemployment rate rose from 8.5 percent in January to 8.9 percent in February.The Austin area reversed its recent job losses in February--actually adding 6,000 jobs during the month and dropping the local unemployment rate a tenth of a point to 6.3 percent.

Total non-farm jobs in the region stood at 773,100 in February, up from 767,100 in January, the latest report from the Texas Workforce Commission shows. Over the last year, the local area added 1,300 positions.

For the month, job gains were most significant in the sectors of government (up 3,100 positions); education and health services (up 2,200 positions); and leisure and hospitality (up 1,500 positions). The only sector to show a major drop in jobs was trade, transportation and utilities, which lost 1,900 jobs over the month.

Statewide job totals dropped by 46,100 positions in February. Over the last year, the state has experienced a net loss of 62,600 jobs.

The state's unadjusted unemployment rate dropped to 6.6 percent compared with 6.8 percent a month earlier.

"Texans are facing tough economic times now with significant statewide job losses," said Texas Workforce Commission Chairman Tom Pauken. "However, the Texas unemployment rate remains far below that of other large states and the nation as a whole."

The national unadjusted unemployment rate rose from 8.5 percent in January to 8.9 percent in February.

From the Austin Business Journal

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Forbes.com recently ranked Austin as the third best city for recent college graduates, behind Houston and Dallas. The magazine looked at factors such as starting salaries, low cost of living and the booming tech industry.

 Check out the full article at http://www.forbes.com/2008/06/26/cities-grads-best-forbeslife-cx_ae_0626realestate.html.

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