Texas Economy: Recovery from a Great Recession
The Texas economy, which joined the nation in recession in fiscal 2009, began adding jobs again at the beginning of fiscal 2010. Recovery from the nation's worst recession since World War II has been lukewarm compared to other economic recoveries.
However, Texas gained 129,100 jobs during fiscal 2010. This is about 30 percent of the 431,300 jobs lost from August 2008 to September 2009. Even with slower expanison than usual, Texas accounted for more than half of the nation's 229,000 jobs added in 2010.
Not only did Texas add more jobs than any state over the year, but it also led in the rate of job growth among the 10 most populous states (five of which lost jobs over this period) as well as having faster growth than all but four of the other 40 states.
During previous bouts of economic weakness, renewed consumer spending helped bring the economy into recovery. Yet, even with job growth, the unemployment rate remains high, and wages per worker have not kept up with inflation, growing a mere 0.3 percent during the year.
As a consequence, retail sales declined markedly in the first half of the fiscal year and only eked out modest increases in the second half, yielding a second year of declining retail spending, which fell even more than in 2009.
Although the Texas economy's domestic demand for good and services remained in neutral through most of the year, Texas export markets more than recovered the severe losses in 2009.
Texas exporters faced a 16 percent sale decline in 2009, but had a 22 percent increase in 2010.
The number of oil and natural gas drilling rigs in Texas at the end of fiscal 2010 was 714. Although far from its record level, this doubling of the number from 2009 was indicative of a turnaround in the state's oil and natural gas industry. In addition to the economic impact from exploration activities with the state, Texas is the headquarters for many of the nation's oil and natural gas firms.
The broader oil and natural gas industry, which includes mining, petrochemicals, petroleum refining and oil/natural gas-related manufacturing, accounts for a 15 percent share of the total Texas economy, and this serves as a buttress for the state economy when increasing oil and natural gas prices hinder the consuming industries.
Among the Texas good-producing industries, construction was the only industry to lose jobs. A sustained weakness in the building of single-family and multi-family residences was exacerbated by tight credit and shrunken investment in business structures. Construction lost 16,600 jobs in 2010.
Texas' service-providing industries, which account for more than 84 percent of the state's total nonfarm employment, uncharacteristically under-performed the goods-producing industries in the rate of growth in 2010 but still accounted for 81 percent of the added jobs.
The education and health services industry accounted for nearly half of the employment growth in Texas during fiscal 2010. All sectors of the industry except child day-care services added jobs, with some sectors, such as home health care and ambulatory health care services (medical offices, laboratories, home health care and ambulance services) growing more than 6 percent. Overall, the industry added 57,300 jobs during fiscal 2010.
The Texas information industry lost 12,900 jobs during 2010. The industry has been losing employment since the "dot-com" bust in 2000 and has shed more than 30 percent of its workforce since then. Losses during fiscal 2010 were spread over publishers, Internet services and data services.
Source: Excerpted from the State of Texas Annual Cash Report 2010, Comptroller of Public Accounts.