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Angelos AngelouAngelos Angelou, principle executive officer of Angelou Economics, delivers his annual economic forecast at the AT&T Conference Center Dec. 11.
Austin should expect solid economic growth and a healthy economy in 2013 and 2014, according to one leading economist.
Angelos Angelou, principal executive officer for Angelou Economics, delivered his annual economic forecast Dec. 11.
"We pride ourselves on our forecast and not overshooting our numbers, but I cannot help, given the economic development here, and through the efforts of the city, county and state, but be very bullish for the next year," he said.
Angelou forecast the Austin economy would add 29,000 jobs in 2013 and more than 30,000 in 2014. The strongest growth areas would be in business and professional services, leisure and hospitality, construction, education, and health services.
He predicted that the unemployment rate would drop to 5.2 percent, the lowest it has been since 2008.
He added that he expected Austin would add 130,000 people in two years, closing in on a population of 2 million people.
Angelou predicted that tech giant Apple Inc. would grow to become the city's largest employer, employing 12,000 people, by the time it finished.
"In the early 1990s, when we first recruited them, they announced that they would have 300 people in Austin," he said. "Now, they have close to 4,000 and will have 3,600 more [after completing its announced expansion in North Austin]."
He predicted that jobs related to social networking would be the new industrial revolution and said it was one of the new industries in the global economy.
"It was suggested that we should go back and look at what I forecast last year," he said. "Last year I predicted that Austin would add 19,500 jobs, and by year's end, it will be closer to 25,000."
Austin in 2012
Angelou said Austin continues to enjoy cachet nationally and internationally, both through its achievements and word-of-mouth opinions.
"Austin is hot. Never in my years of economic development career have I met a situation like this," he said. "I was told that during [the weekend of the U.S. Grand Prix in November], visitors were so impressed with Austin that they have approached Realtors about asking to buy homes to stay here."
Austin added 65,000 people to its population and created 26,000 jobs this year, he said.
The city generated $28 million in retail sales and had a 22 percent increase in venture capital investment—bucking state and national trends.
Angelou predicted that Austin's current total of about $500 million in venture capital investment (as of the year's third quarter) would grow $722 million by year's end. He reported that most investment goes into software, semiconductors, information technology services, medical devices and energy.
Austin added 1,100 new businesses in 2012 and boasts 44,000 businesses in its greater metro area.
On average, Austin households carry $262,000 in debt—less than the national average but higher than the state average of $177,000, he said.
He touted the initial public offerings of Austin firms Bazaar Voice and Chuy's, and the prosperity of several firms, such as Cirrus Logic and HomeAway.
Angelou said local heavyweights Dell Inc. and AMD were experiencing challenges and had announced some job cuts. However, he said that would not be a problem for the overall market because those companies' workers would be able to find new jobs quickly.
He was also excited for the new University of Texas medical school and associated teaching hospital, slated to be built by Seton Healthcare Family to replace University Medical Center Brackenridge in the near future. He predicted that those facilities would help Austin take the lead in biotech development and commercialization in Texas.
Angelou was bullish about local real estate markets for the next two years.
He said that Austin had only 3.8 months of inventory available and forecast a substantial shortage in single-family housing in the city. He also predicted increases in rents.
"If you don't have a house, buy a house. If you are looking to invest money, buy single-family houses," he said.
He predicted double-digit growth rates in real estate properties for the next three to four years.
Regarding the entertainment industry, Angelou said Austin's various festivals and special events bring 2 million people to the city each year.