Austin is on track to sustain its “exceptionally strong” economy and job-growth rate despite projections of slowed GDP growth nationally, said Sarah House, a senior economist for Wells Fargo who presented at the Greater Austin Chamber of Commerce’s annual economic outlook event Dec. 6.
The city faces challenges, including a tightening job market that requires local companies to fight for new hires and skyrocketing housing values that threaten affordability, House said, but a growing population and booming tech sector bode well for the Austin’s long-term economic health.
“Things will go well next year, if not as well as they have been,” House said.
Texas also has a bright future ahead, outperforming most other U.S. states in both GDP growth and job creation.
Historically job growth in Texas has been concentrated in the energy sector, but in recent years it has expanded to include other industries and a wider range of incomes, according to data from the U.S. Department of Labor.
Nationally the economy continues to grow but at a slower pace. Wells Fargo Securities projects the U.S. GDP will increase 2.5 percent in 2019 based on its analysis of U.S. Department of Commerce data.
Economic expansion is traditionally associated with balanced budgets, House said, but the federal government’s deficit continues to rise, as do corporate debts.
As a result both the Federal Reserve and private banks are expected to increase their interest rates, which typically leads to reduced discretionary spending.
Other potential economic risks include rising labor, material and tariff costs as well as the possibility of “a full-blown trade war,” House said.