Earlier this year, the Milken Institute named Austin the best performing large city in its prestigious Best Performing Cities list for the first time since 2013.
According to the report, Austin ranked first in five-year job growth between 2017 and 2022, fueled by a 62% expansion in high-tech GDP growth. The Central Texas region’s overall job market grew 23% during this same five-year time frame, while wages surged by 73% — the highest wage growth reported among all large metro areas.
These extraordinary numbers cited in the report serve as a useful reference point in considering recent layoff announcements and what it means for our tech sector and overall economy.
Tech Employment Hit a New Record High in 2023
The Central Texas economy was expanding at a fast pace for years before COVID hit and, with the exception of the service industry, continued to perform well during most of the pandemic, fueled by a Big Tech hiring spree, corporate relocations, and remote workers flocking to the region.
The Austin region added 228,088 jobs from 2018 to 2023 with the tech sector accounting for nearly 48,000 of these new positions. This means that Austin’s overall workforce grew by 22% during this time while our tech industry employment expanded by nearly 31%.
The Austin region ended 2023 with nearly 203,000 workers employed in the tech industry, the most ever reported. Central Texas reported 4.1% job growth last year with 2.7% wage growth. Job growth in the tech sector lagged at a still positive 2.4% while wage growth in the industry continued to outperform at 5.3%.
Big Tech has downsized its workforce globally from its pandemic highs, and some of these layoffs have impacted workers in Central Texas. Big names make big news — particularly when it involves negative announcements — and every layoff is difficult for the workers impacted. However, the impact of these layoffs on Austin’s economy and job market to date have been minimal. When you consider the overall continued growth, it’s been more of a stabilization.
The Austin region reported a 3% unemployment rate in April, which economists generally consider full employment.
Diversification Strengthens Resiliency
The Austin region was hit hard during the dot-com recession in the early 2000s. Between 2001 and 2003, our technology sector alone lost 15,000 jobs and the region’s unemployment rate more than doubled from 3% to 7%.
In 2004, a group of local business and community leaders came together to launch Opportunity Austin, a regional economic development partnership dedicated to strengthening the region’s economic competitiveness and resiliency, in part through deliberate and sustained efforts to diversify our economy.
Today, our much larger tech sector accounts for just 16.2% of our workforce, with 23.4% of that sector in high-tech manufacturing.
Similar to tech companies across the country, the pace of growth in Central Texas has slowed, but our economy is still growing. We’re also much better positioned to weather headwinds and disruptions in certain sectors than we were in the past.
The Austin region continues to outperform most metro areas in the nation, and our tech sector remains a key driver of our success.
