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2 reports paint S.A. economy as still hearty

Web Posted: 03/09/2007 01:04 AM CST

William Pack
Express-News business writer

Although the local economy may not grow at a breakneck pace this year, two reports released Thursday reinforced San Antonio's standing as a vibrant economy that is withstanding the woes afflicting the nation's economy.

"Overall, the message from the numbers for 2006 has been it was a great year for San Antonio," said Joe Krier, president of the Greater San Antonio Chamber of Commerce. "San Antonio has been on a roll and continues on a roll."

The chamber's fourth-quarter economic report showed that the unemployment rate fell again, leaving San Antonio with the second-lowest rate of the state's major cities behind Austin. Sales-tax rebates grew by nearly 11 percent in the quarter from a year earlier, and commercial real estate filled up at a healthy clip. The city in the fourth quarter hit five-year lows for vacancy rates in office space and industrial space.

Also Thursday, job numbers released by the Texas Workforce Commission showed the area overall experienced a healthy year.

Travis Tullos, an economist who heads the chamber's economic analysis panel, said a housing slump has been blamed for much of the turmoil in the economy nationally. San Antonio, on the other hand, still offers "great affordability" in housing and is doing well compared with residential markets elsewhere, Tullos said.

The chamber's numbers showed existing home sales fell by 2.5 percent in the fourth quarter from a year earlier, but the average home price was up by 6.5 percent to $171,815. Metrostudy has reported that builders started a record 19,092 single-family homes last year and will build 17,000 more this year, which would be the second-best number behind 2006.

"Some cities would kill for those homebuilding numbers," Krier said.

The Texas Workforce Commission jobs numbers for January showed a fairly typical slump in hiring for the month, but 3.2 percent job growth for the year ending in January. That equates to 25,300 new jobs for the year.

"It's very good growth to move into a new year with," said Aaron Smith, Alamo WorkSource's labor market analyst. "Couple that rate of employment expansion with low unemployment ... and what we have is a job market that is providing area residents with extremely good career growth opportunities."

San Antonio's unemployment rate in January rose to 4.4 percent from 3.8 percent in December. But it was lower than the 4.9 percent recorded in January last year and is the strongest January rate the area has experienced since 4.1 percent in 2001, Smith said.

Nationally, unemployment reached a four-month high in January at 4.6 percent. Statewide, it was 4.5 percent. Both of those rates, unlike the area unemployment total, are adjusted for seasonal factors.

For the month, San Antonio lost 11,300 jobs, the biggest hits coming in sectors covering educators and the retail trade, which typically sustain losses in January. Smith said the drop-off in January has often been steeper than this year, although retailers fared worse this year than last with a loss of 5,000 jobs.

Krier said job growth has continued in San Antonio because existing businesses are doing well. While growth may not continue this year at the historic levels it reached the past two years, Krier believes it should remain strong.

"We've just gone from being fabulous (in 2006) to being great this year," Krier said.

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