Texas Economy 2019: Oil Patch Recovering Slowly

The state's rate of job growth was the second highest among the ten most populous states (after Florida) and the sixth highest among all states. Updated 2 years ago
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In fiscal 2019, the Texas economy added 303,500 nonfarm jobs, an increase of 2.4 percent, to reach 12,856,100. Texas added more new jobs than any other state except California during this period. Private-sector employment rose by 2.8 percent, while government employment (federal, state and local) grew by 0.4 percent.

The state’s rate of job growth was the second highest among the ten most populous states (after Florida) and the sixth highest among all states.

Consumer Spending
Consumer spending is a major component of the Texas economy. Growth in sales tax collections resumed in 2017, with revenue up 2.3 percent over 2016. Sales tax revenue was up again in 2018, by 10.5 percent and by another 6.5 percent in 2019 to reach $34.0 billion.

The Consumer Confidence Index is a monthly measure of consumer optimism, an important factor affecting the sales of housing, automobiles, and other major purchases. The index for the four-state West South Central (WSC) Region, which includes Texas, was up by 5.1 percent over fiscal 2019. The index for the nation as a whole was essentially unchanged.

Oil and gas
As a result of the 2014-16 decline in oil and natural gas prices — oil fell from $105.15 per barrel in June 2014 to $30.62 in February 2016, a decrease of 71 percent — the Industry employment peaked in December 2014 at 321,900 and then declined steadily, reaching a low of 204,400 in September 2016.
Since then, industry employment has grown significantly, reaching 254,200 in August 2019, an increase of 4,700 jobs (1.9 percent) from August 2018, but still 21 percent below the 2014 peak.

In addition to substantial exploration activities within the state and in the Gulf of Mexico, Texas is headquarters for many of the nation’s largest oil and natural gas refining and distribution companies, and has a large number of energy-related jobs in other industries. Employment in those industries and sectors has recovered from recent lows.

The Texas manufacturing industry gained 26,700 jobs over the past year, an increase of 3.0 percent. Durable goods employment was up 18,900, led by gains in machinery manufacturing (up 5,700, 5.9 percent). Fabricated metal manufacturing employment also was up over the year (by 2,300, 1.8 per- cent). Both sectors are closely associated with oil and natural gas exploration and production, and employment in those sectors has been increasing along with that in the mining industry. Total manufacturing employment in August 2019 was 911,300.

Texas exports increased for the first time in two years (on a year-over-year basis) in November 2016 and have increased in every month since. Through July, the value of 2019 exports was 5.1 percent higher than in the corresponding period of 2018. Texas is the nation’s leading exporting state, and has been for more than a decade. Texas exports comprised 19.7 percent of total U.S. exports through the first 11 months of fiscal 2019.

Construction employment increased by 43,900 jobs (5.9 percent) in 2019 to reach 787,400 in August. Employment in the heavy and civil engineering construction sector increased at the highest rate of any construction sector, growing by 12.5 percent (20,000).

Total housing construction activity in 2019 was up from 2018. According to Multiple Listing Service data from the Texas A&M Real Estate Center, the median sales price for an existing Texas single-family home rose by 2.5 percent, from $239,000 in July 2018 to $245,000 in July 2019.

Texas’ service-providing industries, which account for 85 percent of the state’s total non-farm employment, saw job growth of 2.1 percent in fiscal 2019.

The professional and business services industry added 30,900 jobs (up 1.8 percent) in fiscal 2019. Employment changes varied considerably among industry sectors, with the largest increases in management, scientific, and technical consulting services (7.9 percent) and architectural, engineering, and related services (5.9 percent). The employment services sector, which includes temporary help agencies with many of its jobs in temporary and/or part-time positions, had the largest absolute decrease in employment, 18,300.

The education and health services industry, composed of the educational services and health care and social assistance sectors, added 50,200 jobs in 2019, a growth rate of 2.9 percent. The relatively small educational services sector saw an increase of 8,700 jobs (4.2 percent). The much larger health care and social assistance sector grew at a 2.8.

Trade, Transportation and Utilities
The trade, transportation and utilities industry added 47,000 jobs (1.9 percent) over the year. Employment in all three industry sectors — retail trade, wholesale trade and transportation, warehousing and utilities — rose during fiscal 2019.

Wholesale trade employment was up by 4.3 percent (25,800 jobs), transportation, warehousing and utilities employment increased by 19,800 (3.5 percent), and employment in the retail trade sector increased by 1,400 (0.1 percent).

The information industry is a collection of diverse sectors, representing established sectors of the economy (newspaper publishing, data processing, television broadcasting, and wired telephone services) as well as some newer sectors (cell phone service providers, Internet providers, and software). The information industry was the only one of the 11 major industries to experience a decline in employment over the year. Employment fell 1.0 percent (2,000 jobs) to reach 201,400 in August 2019.

Leisure and Hospitality

Employment in the leisure and hospitality industry increased by 46,300 jobs (3.4 percent) over the fiscal year. The majority of the industry’s job gains occurred in the food services and drinking places sector, which added 26,500 jobs (2.4 percent). The largest percentage increase was in the arts, entertainment, and recreation sector, which grew by 5.4 percent (8,400 jobs). Total leisure and hospitality employment in August 2019 was 1,409,100 jobs, representing about 11 percent of total Texas employment.

Government employment increased by 0.4 percent (7,700 jobs) over the year. Federal government employment increased by 6,000 and local government employment increased by 3,400. State government employment, however, decreased by 1,700. Total government employment in Texas was 1,965,000 in August 2019.

Excerpted from the State of Texas Annual Cash Report 2019, Comptroller of Public Accounts.


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