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Raub Report May 2014

June 2, 2014

While the international scene is confusing right now (QE 4-awhile longer, Russia vs Ukraine; China vs. Japan, Viet Nam, Philippines, et al), how are WE doing? The employment picture in San Antonio is excellent with the unemployment rate dropping to 4.8% from 5.2%, and hitting the mark last set in July 2008, and making San Antonio the best city in the nation in April for job growth.  In April, San Antonio was ranked the fastest growing market in the United States.   Local economists are forecasting job creation between 23,000 and 30,000 this year.  For Texas as a whole, we have gained 124,000 jobs year to date with 52,600 in April; we outpaced the U.S. 3.2% to 1.7% over the past year.

I am often asked, “But where are all these people coming from to work in San Antonio?”  The answer is simply, “San Antonio.”  With a job base of around 1-million workers in the metropolitan area, we must create about 20,000 new jobs a year to handle the young people who are graduating from local high schools and area colleges and then are going into our local workforce.  When we have people relocating from California, Michigan or wherever, then more jobs must be opened for them, too.

Where are these new businesses coming from?  The answer again is “Here.”  Most of our growth, say 80%, comes from our own businesses adding jobs: a new Wal-Mart or HEB grocery will add 300 jobs when it opens.  Every business grows and contracts on its own cycle.  Then, often, local people may leave their jobs and start their own new businesses that then grow and contract; all part of a healthy economy.

And additionally, in the first quarter of 2014 we have seen substantial commitments from new companies coming into San Antonio: Dollar General’s big distribution center will employ 530; Convergys will hire 400 for a back office operation; and Carrier, the air conditioner company, is building the first phase of a 2-million square foot distribution center, near Toyota.  IRC actually brokered that 135 acre land deal.

The Eagle Ford Shale companies are doing some hiring but the big ramp up from 2009 to 2011 is pretty much complete.  We do expect this shale oil and gas extraction to go on for many years, but probably no more big hiring pushes in the future.

However, our biggest issue is not job creation — many companies are hiring.  Our real challenge is training folks to give them the skills and qualifications to fill the jobs that are going unfilled.   Nationally, there are more than 4-million job slots open that are not getting filled.   If these available jobs did get filled, the unemployment rate would drop by half.  And, maybe those that gave up looking for work would come back into the labor force.  Not everyone is college bound, especially with the very high cost of higher education.  Our high schools are doing a good job with their career-oriented academies and magnet schools.  Alamo Community College District has a good job and industry targeted programs.  Then, there are specialized small business generators like Geekdom.

All of this goes together to make a strong more viable local economy.  It’s not about unemployment – it is about employability.

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