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San Antonio Economic Indicators

Economic Indicators
July 26, 2018

Growth in the San Antonio economy remained mild in June. The San Antonio Business-Cycle Index continued to expand, though below its long-term average, as the unemployment rate held at a low level and job growth remained tepid. Employment in cybersecurity—a strong growth sector in San Antonio over the past five years—moderated in the first half of 2018, according to preliminary data. Housing permits and construction employment grew strongly in the second quarter.

Business-Cycle Index

The San Antonio Business-Cycle Index expanded at a 2.1 percent annualized rate in June, decelerating slightly from May’s rate and lingering below its long-term average of 3 percent (Chart 1). Job growth has increased just 0.5 percent year to date, contributing to the overall weakness in the index relative to 2017.

Chart 1

Labor Market

Unemployment Rate Remains Below State Average

The San Antonio unemployment rate stayed at 3.3 percent in June, well below its long-term average of 5 percent (Chart 2). The U.S. and Texas rates were both higher at 4 percent, a level still indicative of tight labor markets. San Antonio labor force growth was slow in the first half of the year at just 1.3 percent—below the rate of expansion for the state and its other major metros.

Chart 2

Job Growth Soft in Second Quarter

San Antonio jobs inched up at a 0.5 percent annualized rate in the second quarter (Chart 3). Goods-producing industries continued to grow, although mining and manufacturing decelerated from very strong growth earlier in the year. Construction jobs accelerated sharply, adding nearly 1,000 jobs, due largely to hiring by specialty trade contractors. Health care and education, the fastest-growing sector in the second quarter, added over 3,000 jobs. Meanwhile, leisure and hospitality continued to shed jobs, while weakness in retail reversed gains in the trade, transportation and utilities industry from earlier in the year.

Chart 3

Cybersecurity Job Growth Moderating

Growth in private cybersecurity employment has outpaced overall job growth in San Antonio in recent years (Chart 4). The industry, which includes data processing, computer programming, computer systems design and other related services, has added jobs at an average rate of 5.2 percent annually since 2012 versus 3.6 percent for total employment in San Antonio. However, broader industry data for the first half of 2018 suggest that cybersecurity job growth has weakened to just 0.7 percent, only slightly above the 0.5 percent rate for overall jobs.

Chart 4

Real Estate

June permits for single-family home construction ticked up in San Antonio and Texas overall, and the three-month average of both series rose to their highest levels since 2007 (Chart 5). Over the first half of 2018, San Antonio home permits increased 8.3 percent year over year, compared with 3.5 percent for Texas.

Chart 5

Stock Prices

Stock prices of companies with a significant presence in San Antonio increased 1.4 percent from June 15 to July 20, compared with a 0.8 percent rise in the S&P 500 over that time (Chart 6). Gains were concentrated in financial firms, with mixed growth in manufacturing and energy stocks. Stock prices of communication and food services firms saw mild to moderate declines.

Chart 6

NOTE: Data may not match previously published numbers due to revisions.

About San Antonio Economic Indicators

Questions can be addressed to Christopher Slijk at christopher.slijk@dal.frb.org. San Antonio Economic Indicators is published every month on the Thursday after state and metro employment data are released.