San Antonio’s economy will remain aloft through 2008
John Clinkard
San Antonio’s economy will remain aloft through 2008
Although it appears to have lost some of the momentum it had late in 2005 and early 2006, the San Antonio economy continues to exhibit solid growth in 2008.
This observation is based on the most recent Federal Reserve Bank of Dallas business cycle index for San Antonio. In February, the index increased by 4.9%, following a 3.9% rise in January.
Over the past year, the Alamo city has added almost 19,000 jobs in total. Jobs in goods-producing industries are up +2,700, while jobs in service-producing industries increased by +16,200.
Within the service sector,
Education and health services: +4,400;
Government services: +3,800;
Leisure and hospitality services: +2,800;
Trade, transportation and utilities: +2,500; and
Business and professional services: 1,200.
New single-family house construction in San Antonio dropped -47% year over year in February 2008. Despite this sharp downturn, the sustained, strong growth of net migration has underpinned rental demand in the city and boosted multiple-unit construction by +14% year over year in February 2008. It will continue to exhibit moderately strong growth in 2008.
This strength in multiple-unit residential construction, together with strong growth of office, retail and warehouse construction, has pushed employment in San Antonio’s construction sector up 5.1%, making it the most rapidly growing sector in the metro area.
According to the second-quarter 2008 Manpower Employment Outlook, hiring plans among San Antonio-area employers are stronger than they were in the first quarter and are similar to a year ago.
In addition, although the closing of the Brooks Air Force Base will cost San Antonio 2,279 high-paying military jobs over the next few years, the expansion of Fort Sam Houston under the Defense Base Realignment and Closure program will ultimately bring 12,000 military staff to the metro area over the next several years.
This development ensures that the U.S. Defense Department will continue to underpin the San Antonio economy for the foreseeable future.
In summary, while the prospects for the country as a whole have become significantly weaker over the past few months, the outlook for San Antonio remains quite bright.
