1. Presented by: Steve Nivin, Ph.D. Please contact Steve Nivin with any questions or comments at snivin@saberinstitute.org or 210-517-3609. 2014 MID-YEAR ECONOMIC UPDATE SAN ANTONIO ECONOMY: STEADY AS SHE GOES Presented on: August 27, 2014

2. 2014 San Antonio Economic Forecast  Employment growth of 2.5-3.0%  22,800-27,500 jobs  Unemployment rate will decline to 4.8-5.0% 2

3. Single family housing market is very strong in San Antonio and across Texas. 3 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.

4. Increases in home prices are indicative of a tight market. 4 Source: Texas A&M Real Estate Center; Calculations by Steve Nivin, Ph.D.

5. Unemployment rate in San Antonio second lowest among major metropolitan economies in Texas Source: Bureau of Labor Statistics; Federal Reserve Bank of Dallas 5

6. Unemployment rate in San Antonio has been oscillating between 4.7% and 4.9% from April through July. Source: Bureau of Labor Statistics; seasonal adjustment by Federal Reserve Bank of Dallas 6

7. Unemployment rate in San Antonio has been below long-term average since Jan. 2014. Source: Bureau of Labor Statistics; seasonal adjustment by Federal Reserve Bank of Dallas 7 Avg. unemployment rate since 2000 = 5.6%

8. Growth trend since end of recession similar to growth pre-recession. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D. 8

9. Major metros and Texas showing solid growth through July 2014. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D. 9

10. Employment growth has come back to its long-term (since 1991) trend Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D. 10 Avg. annual employment growth in San Antonio since 1991 = 2.26%

11. Employment growth in San Antonio was slower than some major metros in July but ahead of Dallas and the U.S. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D. 11

12. 12 Employment growth in San Antonio continues to be broad-based. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D.

13. 13 Financial activities showing strong growth and construction/mining picking up the pace Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D.

14. 14 Education/health and hospitality have been leading employment growth. Growth in professional services also starting to accelerate. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D.

15. 15 Employment growth broad-based in Austin and being lead by other services, hospitality, professional services, and education/health sectors. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D.

16. 16 Employment growth in Houston being propelled by construction/mining, education/health, hospitality, and professional services sectors. Source: BLS; Federal Reserve Bank of Dallas; Calculations by Steve Nivin, Ph.D.

17. Summary  Trends are on forecast…for the most part.  Unemployment already at low end of forecast, so might see it go a bit lower.  Employment growth slightly below forecast as of July, but optimistic economy will still reach at least lower end of forecast. 17

18. Thank you!!! Questions? 18