A rapid expansion of high-tech payrolls fueled the Austin area’s booming labor market in 2015, but tech employers have cooled their heels so far this year, according to workforce data released Friday.
Both the high-tech services and manufacturing industries trimmed around the edges of their payrolls in March, according to the Texas Workforce Commission.
Jobs at Austin’s primary tech factories fell from a year ago, the data show. And while tech services firms counted more jobs this March than last, they’ve pulled back from the blistering pace of growth they posted for much of last year.
Despite tech’s recent cooling off period, a wide cross-section of employers continued to add jobs in March. All told, regional employers added 4,900 jobs during the month, an increase of 0.5 percent from February, according to the commission.
The payroll growth helped hold the Austin metro unemployment rate at 3.1 percent, the same as in February.
While the workforce commission doesn’t immediately adjust its local data for seasonal workforce patterns, an analysis by the Federal Reserve Bank of Dallas put Austin’s seasonally adjusted unemployment rate at 3.4 percent in March, also level with February.
An unusually large rise in the number of unemployed Central Texas residents offset a solid increase in employment and official labor force totals, according to commission data.
“We’ve not heard of or seen any significant shifts in hiring needs or any dramatic increases in layoffs” that would account for the increase in unemployed, said Tiffany Daniels, director of communications and employer engagement at Workforce Solutions Capital Area.
Across Texas, on the other hand, a clear pattern of layoffs has emerged, as energy companies and oilfield services firms continued to slash jobs during March, the commission said. Hiring in other sectors, however, helped hold the state’s seasonally adjusted jobless rate steady at 4.3 percent in March.
Nationally, the adjusted unemployment rate ticked up to 5.0 percent in March, from 4.9 percent the prior month.
In Austin, the high-tech hiring lull stems in part from the blistering pace of job creation last year. Tech-sector employment in the Austin metro increased 7.8 percent in 2015, according to a recent Dallas Fed report. From December to February, though, it fell an estimated 4.6 percent, the report said.
Workforce commission data back that up. Jobs in Austin’s professional, scientific and technical services industries — which include many of the area’s software, programming and similar occupations — dropped to 94,000 in March, down from 96,800 in December, according to Friday’s jobs report.
Part of the lull of the past few months has stemmed from the fact that the industry is still digesting the rapid payroll growth of the last few years, said Barbary Brunner, CEO of the Austin Technology Council. But local companies have also eased off the accelerator as they gauge the global economy and the uncertainty that comes with the presidential election cycle, she said.
“There has been a change in the world economic markets,” Brunner said, “and I think that Austin companies are simply being savvy and responding to that.”
At a local level, she said, companies have seen an “arms race” for engineers, prompting many to weigh whether to bring on a full-time engineer or make do with their existing staff and resources. And while many companies aren’t adding lots of new jobs, they are adjusting their mix of skills as they backfill positions.
Austin’s high-tech job easing might also stem from the shift to more contract and freelance engagements, which can be harder to capture in the traditional workforce numbers. A recent report by Lawrence Katz and Alan Krueger, labor economists at Harvard and Princeton universities, respectively, found that the share of workers with “alternative work arrangements” jumped to 15.8 percent in 2015 from 10.1 percent in 2005.
About 20 percent of all the non-employer firms in the Austin metro area were in the professional, scientific or technical services industries, the most of any local industry grouping, according to Census data from 2013, the most recent available.
Even with pause, some signs of a modest re-acceleration have already emerged, and overall job-creation throughout the Austin metro area remained robust in March.
“Over the past few weeks I have had a number of requests from (tech) companies looking to hire graduating students, which was good because it was slow in December and much of the first quarter,” said David Altounian, a professor of entrepreneurship at St. Edward’s University. “It was a nice change.”
And in the meantime, leisure and hospitality firms and health care providers picked up the slack. The leisure and hospitality industries added 1,500 jobs in March and have grown payrolls by 6.7 percent since the same month last year.
Health care and social assistance firms added 1,200 jobs last month, a 1.2 percent gain over February — more than double the average growth for March since 2000, according to commission data. Payrolls at those firms have ballooned 6.0 percent in the past 12 months.
“Central Texans, especially students, should see that (information technology) and health care remain the two leading high- and middle-wage jobs with openings as they make decisions on their fall classes and college majors,” said Drew Scheberle, a senior vice president at the Greater Austin Chamber of Commerce.
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