The San Antonio-New Braunfels metro area has an overall grade of C, ranking 36.8th percentile out of 50 US metros, with a composite score driven largely by its low labor demand and stagnant wage growth. The city's labor demand composite score of 3.36, combining a +0.40% employment growth rate and a -2.201% weekly hours deviation from trend, suggests a weak labor market. Additionally, the wage growth rate of +1.25% year-over-year is a key metric defining the city's economic character, indicating slow labor cost increases.

Labor Demand

The employment growth rate of +0.40% and weekly hours deviation of -2.201% from trend signal a labor market that is not experiencing genuine demand expansion, but rather a mild contraction. This combination indicates that while some jobs are being added, the hours worked are below the city's own trend, suggesting a lack of robust labor demand. This scenario may lead to a surplus of workers, making it easier for businesses to hire, but also potentially limiting wage growth.

Unemployment

The unemployment rate of 4.10% indicates a labor market with some slack, rather than being extremely tight. This rate suggests that businesses may find it relatively easier to hire workers, as there is a pool of available labor. However, this also implies that local consumer demand may be weaker due to the higher unemployment rate compared to other metros.

Wage Growth

The year-over-year wage growth rate of +1.25% is stagnant, indicating slow labor cost increases for employers. This moderate wage growth rate suggests that workers may not have strong bargaining power, potentially limiting their purchasing power and overall economic activity. For businesses, this means a relatively flat labor cost environment, which can be beneficial for controlling expenses.

Cost of Living

With a cost of living ratio of $173/sqft to $32.19/hr, and a year-over-year decrease of -5.0% in PSF, San Antonio-New Braunfels ranks in the top tier (90th percentile) for affordability. This high affordability score means that the city offers a significant talent attraction advantage without requiring wage premiums, as the cost of living is relatively low compared to other metros.

Labor Force Growth

The civilian labor force is contracting at a rate of -0.11% year-over-year, indicating a shrinking labor pool. This contraction suggests a structural headwind for hiring, as the supply of available workers is decreasing, potentially making it more challenging for businesses to find the talent they need.

Building Permits

The year-over-year change in building permits is -12.00%, signaling a tightening of the housing supply. This decrease in permits suggests that future affordability and workforce accommodation may be at risk, as the supply of new housing is not keeping pace with demand, potentially driving up costs and limiting the city's attractiveness to relocating workers.

Days on Market

The current median days on market is 61 days, with a year-over-year decrease of -1.6%. This relatively fast market suggests that homes are selling quickly, making it competitive for relocating workers to find housing. However, the decrease in days on market indicates a hot market, which can be challenging for workers trying to relocate to the area.

Office Economy

With an office/professional worker share of 2.86, ranking near the median (58th percentile), San Antonio-New Braunfels has a moderately deep talent pool suited for businesses requiring professional and office workers. This city is best suited for businesses that can thrive in a mixed economy, but may not be ideal for those requiring a highly specialized or dominant knowledge-economy talent pool.

The San Antonio-New Braunfels metro area offers businesses a relatively affordable cost of living and a flat labor cost environment, but its slow wage growth and contracting labor force pose significant risks. The single biggest constraint for a decision-maker to factor in is the potential difficulty in attracting and retaining talent due to the limited labor pool and tightening housing supply, which may outweigh the benefits of the city's affordability and moderate labor costs.