“Jobs” was the central issue in the recent election. It is certainly on everyone’s minds with the national unemployment rate hovering around 8%; and if you go to the government’s broadest measure of unemployment which includes all the potential workforce including those who have stopped looking, then, the unemployment rate is at about 15%. It was at 4.7% during the Bush years.
Give Thanks that we are in San Antonio and South Texas where our unemployment rate clocks in at 5.9%. We actually had a net increase in new jobs of 23,000 over the past year. To keep our employment rate steady our community needs to create net new jobs annually of about 16,000 because we add high school and college graduates to the labor force; a 2% growth of our 870,000 workers.
Why do I care about jobs? Commercial Real Estate is based on employment growth. This creates the need for more lease space in buildings, more land sites for purchase and development, more demand for new apartments and houses. A shrinking or stagnant economy reduces the volume of real estate transactions; for example, transaction volume shrunk by 80% in 2009. That really hurts.
I would submit to you that in S.A. and the U.S. of A. we do not have an unemployment problem. We have a job mismatch problem. There are a number of businesses that have zero unemployment and are desperate for qualified employees. From Rackspace: there is zero unemployment in Cloud Computing; from Geekdom: if you can program in ‘Ruby on Rails’ then you can start at $50,000 per year now with substantial potential increases. From Holt Cat: they need diesel mechanics badly. Remanufacturing diesel motors is a big part of their business and finding qualified mechanics is very difficult. Good opportunity for those with good hand skills. Eagle Ford Shale: we have all read the stories about 18 year olds (who avoid drugs) earning twice what their fathers make. College grads are needed too to monitor and oversee the operations. Home building is so strong that framers are in very short supply. A dry cleaner owner recently told us he has trouble expanding his stores because of the difficulty of finding loyal, responsible employees. Nurses are terribly over-worked because of a shortage. We will face a doctor shortage in two years because of a low interest by qualified students who want to go into medicine, while those in the field, especially Primary Care, are retiring early.
If we can find a way to provide motivation to our young folks to pursue the right education, our community will be so much better for it. Texas has an 86% high school graduation rate, making us 4th in the nation, while San Antonio ISD has improved from 60% to 75% – room for more improvement.
A recent study by Pitney Bowes of the fastest growing metropolitan areas forecasts San Antonio/New Braunfels will grow 7.1% over the next five years, adding 55,000 new households by 2017. This makes us 8th in the Top 50 Metros. Assuming each household will need its own dwelling, this creates the need for 11,000 units per year; probably 8,000 new homes and 3,000 new apartment units. This is slightly ahead of our 2012 pace. Let’s all pray we avoid a new recession in 2013.
Very Happy Holidays to you and your family –