1. Presented by: Steve Nivin, Ph.D. Please contact Steve Nivin with any questions or comments at snivin@saberinstitute.org or 210-517-3609. 2015 ECONOMIC FORECAST: SAN ANTONIO Presented on: March 18, 2015

2. The Forecast: March Madness 2  University of Connecticut wins the women’s championship  University of Wisconsin wins the men’s championship

3. Forecast for 2014 was not optimistic enough 3 ForecastActual Employment Growth (%)2.5-3.0%3.26% Employment Growth (jobs)22,800-27,50030,300 Unemployment Rate4.8-5.0%3.9%

4. Business cycle index indicates all major metro economies and the state economy continued to grow through 2014. 4 Source: Federal Reserve Bank of Dallas

5. Major metros and Texas showed solid employment growth through 2015. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D. 5

6. Employment continues to grow above the long-term (since 1991) trend Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D. 6 Avg. annual employment growth since 2001 = 2.35%

7. Employment growth in San Antonio was slower than some major metros but was ahead of Austin, Dallas and the U.S. as of Jan. 2015 Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D. 7

8. 8 Financial activities showing strong growth and construction/mining employment finally back to pre- recession level, while manufacturing on a downward trend. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D.

9. 9 Pace of employment growth in professional services continues to accelerate; growth in education and health continues to climb; hospitality has taken a small dip. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D.

10. Unemployment rate in San Antonio second lowest among major metropolitan economies in Texas. Source: Bureau of Labor Statistics; Federal Reserve Bank of Dallas 10

11. Unemployment rate continues to trend downward across major metro economies, the state, and the U.S. Source: Bureau of Labor Statistics; seasonal adjustment by Federal Reserve Bank of Dallas 11

12. Unemployment rate in San Antonio has been below long-term average since Jan. 2014. Now at full- employment? Source: Bureau of Labor Statistics; seasonal adjustment by Federal Reserve Bank of Dallas 12

13. Single family housing market is very strong in San Antonio and across Texas. 13 Source: Texas A&M Real Estate Center Months in inventory measures how many months will take to sell the current inventory, based on the average number of sales per month in the previous year.

14. There is virtually no single family housing inventory in the major housing markets in Texas. 14 Source: Texas A&M Real Estate Center Months in inventory measures how many months will take to sell the current inventory, based on the average number of sales per month in the previous year.

15. Tight market is causing an acceleration in home prices. 15 Source: Texas A&M Real Estate Center; Calculations by Steve Nivin, Ph.D.

16. Increases in home prices are lower in San Antonio but still quite strong. 16 Source: Texas A&M Real Estate Center; Calculations by Steve Nivin, Ph.D.

17. 2015 Forecast  Employment growth of 2.25-3.0%  Growth of 24,000 to 28,800 jobs  Unemployment rate at 3.4-3.8%  Risks to forecast  Low oil prices…although could be net positive to San Antonio  Slowing growth around the world, especially in E.U. and China  Strong dollar 17

18. Thank you!!! Questions? 18