The Big Picture Corpus Christi Employment Change by Industry, 2012-13 Corpus Christi Employment Change by Industry, 2012-13 Government Other Services (except Public Admin) Accommodation & Food Services Arts & Recreation Health Care & Social Assistance Educational Services (Private) Administrative & Support Management of Businesses Professional & Scientific Services Real Estate & Rental Finance & Insurance Information Transportation & Warehousing Retail Trade Wholesale Trade Manufacturing Construction Utilities Mining Agriculture -25% -20% -15% -10% -5% 0% 5% SOURCE: Texas Workforce Commission. 10% 15% 20% Corpus Christi is not simply adding jobs, but high-paying jobs. Jobs in oil and gas extraction and business services that are expanding at record pace also pay more relative to other industries. An increasingly tighter regional labor market has driven up overall wages. Despite a retreat in job growth, average wage earnings in Corpus Christi rose 6.6 percent in 2013, after about 4 percent gains in the previous two years. Recent growth in local wage earnings was more than twice of those at the state and national levels. Wage Earnings Per Employee, % Change Wage Earnings Per Employee, % Change 8% Corpus Christi Texas U.S. 6.6% 6% 4% 4.4% 4.2% 3.6% 2% 1.0% 0% 2008 2009 2010 2011 2012 2013 -2% -4% -3.4% SOURCE: Bureau of Labor Statistics. Growth in employment and income stimulates household spending. Since the beginning of 2011, the volume of business sales in the metro area has continued to expand on a year-over-year basis, particularly during the fourth quarter that includes the holiday season. Corpus Christi Business Sales Corpus Christi Business Sales Volume, $mil (left scale) Y-o-Y % Change (right scale) 20,000 18,000 100% 80% 16,000 60% 14,000 40% 12,000 10,000 20% 8,000 0% 6,000 -20% 4,000 -40% 2,000 0 -60% 2008 2009 2010 2011 SOURCE: Texas Comptroller of Public Accounts. | 2012 2013 Region in Transformation Corpus Christi is in the midst of a construction boom that promises to transform the future landscape of South Texas’s economy. With a whopping 15 percent employment growth in its construction sector, Corpus Christi added the most construction jobs among all Texas metro areas in 2013. According to the Associated General Contractors of America, Corpus Christi added a total of 3,800 new construction jobs in 2013. Those jobs were responsible for more than two thirds of the total employment gain in the metro area. The U.S. as a whole is also witnessing an uptick in construction. What distinguishes Corpus Christi from the rest of the nation is industrial construction. More than a dozen industrial facilities with capital investment together in excess of $20 billion were announced within the past two years. TPCO America, a Chinese-owned company, broke ground on its $1 billion steel pipe plant in the city of Gregory in early 2012. Almost overnight, South Texas became a mecca for foreign investment. That largest overseas capital project for China to date was soon followed by the Italian M&G Group, which announced the construction of a plastics plant at $1 billion near Port of Corpus Christi; and an Austrian company Voestalpine, which announced the construction of a $700 million iron ore processing plant near La Quinta Ship Channel. Among others, the influx of foreign capital investment has been driven by the competitive business environment in Texas, the advantage of a deep-sea port, and the proximity to an abundant supply of natural gas at low prices. With soaring oil and gas production in the Eagle Ford, an increasing number of industrial leaders have announced plans to expand their current refinery and storage facilities alongside Port of Corpus Christi, or developing new ones. By July 2013, increasing shipments of crude oil and liquefied natural gas (LNG) to other parts of the U.S. and the rest of the world had made the port a net exporter for the first time in history. Strong Housing Market Home construction is also soaring. In contrast to industrial construction, rises in home building activity are a nation- Annual Review of the South Texas Economy – 2014 Edition wide phenomenon. Historic low interest rates are keeping financing costs at very affordable levels. New home starts in some Coastal Bend communities have approached their levels set in 2008, which marked the end of the last housing boom. Despite increasing home starts across the U.S., homeownership has yet to budge. In fact, after reaching at nearly 70 percent during the housing boom between 2005 and 2007, the nationwide homeownership rate inched down steadily over time to about 65 percent in 2013. Likewise, the share of owner-occupied housing units in the City of Corpus Christi declined from 54 percent in 2008 to 52 percent in 2012. The share of renter-occupied units rose correspondingly from 33 percent to 38 percent. Rather than homeowners, investors have been driving much of new home construction activity since 2011. Corpus Christi Single-Family Home Starts Corpus Christi Single-Family Home Starts 2500 2000 1500 1000 500 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 SOURCE: Real Estate Center at Texas A&M University. With rising demand outstripping the number of newly built homes in the Coastal Bend, home prices are on the rise. The median home price for the City of Corpus Christi appreciated more than 7 percent in 2013. The level of inventory in the market has reduced to below five months, about half of that five years ago. This means that now it will take only half of the time for the area to sell all houses up for sale on the local market.