Pocket of Strength: Bright Economic Lights of Texas
January 13, 2012
The Milken Institute released its 2011 list of Best-Performing Cities Index and topping the list of 200 large U.S. metropolitan areas was San Antonio, Texas, home of U.S. Global Investors. The Alamo City jumped to the No. 1 spot from last year’s 14th place.
Milken’s index measures U.S. cities’ economic performance based on job creation, retention and quality as well as where businesses are growing and thriving.
San Antonio has experienced widespread growth from many different areas, most notably, military expansion, biomedicine and cybersecurity. Education and health services jobs in San Antonio have been steadily increasing over the 2007-2010 timeframe, whereas job growth in the same areas across the U.S. has decreased.
The growth in jobs fueled a net gain of nearly 30,000 new residents in 2010, roughly 2 percent of total population, and as a result, the city’s residential sector weathered the recession better than the overall U.S., and consumer spending continued to expand.
The Alamo City’s “attractive business climate and less onerous regulatory environment attracted expansions from firms headquartered elsewhere and retained homegrown entrepreneurs,” says the Milken Institute.
San Antonio wasn’t the only Texas city receiving accolades. Overall, four out of the top five and nine of the top 25 best-performing cities are located in the Lone Star State. In fact, during the 12 months ending June 2011, the entire state of Texas accounted for one of every five jobs created in the U.S., according to the Milken Institute.
The energy sector has provided the spark for much of the job growth in South Texas. Giants such as Schlumberger and Halliburton have set up offices in San Antonio as exploration and drilling activity of the Eagle Ford Shale formation ramps up. The Milken Institute says natural resource mining increased nearly 8 percent from June 2010 to June 2011, supporting thousands of oil and gas field service jobs.
These aren’t minimum wage jobs, either. Similar to oil sands production in Alberta, Canada, a person with a high school diploma can make a six-figure income. Also, after moving to San Antonio from Canada when I purchased the company more than 20 years ago, I can assure you the weather in South Texas is much more pleasant.
Growth seems set to continue for San Antonio, as Boeing recently announced it was moving its aircraft maintenance and modification work to San Antonio. About 300 to 400 jobs will be created over the next few years.
The Alamo City’s top ranking is one pocket of strength we recognize among the mire of pessimism. I’m proud to see U.S. Global Investors located right in the middle of that pocket.
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The following securities mentioned were held by one or more of U.S. Global Investors Fund as of 12/31/11: Halliburton.