AT TEXAS A&M UNIVERSITY

Monthly Review of the Texas Economy

By Ali Anari, Research Economist Mark G. Dotzour, Chief Economist TECHNICAL REPORT

1 8 6 2

JANUARY 2013

TR

Monthly Review of the Texas EconomyJanuary 2013

By Ali Anari and Mark G. Dotzour The Texas economy gained 265,500 nonagricultural jobs from December 2011 to December 2012, an annual growth rate of 2.5 percent compared with 1.4 percent for the United States (Table 1 and Figure 1). The states nongovernment sector added 258,500 jobs, an annual growth rate of 2.9 percent compared with 1.7 percent for the nations private sector (Table 1). Texas seasonally adjusted unemployment rate fell to 6.1 percent in December 2012 from 7.4 percent in December 2011. The nations rate decreased from 8.5 to 7.8 percent (Table 1). Table 2 shows Texas industries ranked by employment growth rate from December 2011 to December 2012. Table 3 shows the relative importance of the states industries based on number of employees. All Texas industries except the information industry had more jobs in December 2012 than in December 2011. The states construction industry ranked first in job creation, followed by the leisure and hospitality industry, professional and business services, and the education and health services industry. Texas construction industry added 35,600 jobs from December 2011 to December 2012, a 6.4 percent growth rate, ranking first in job creation (Table 2 and Figure 2). Job gains consisted of 11,700 jobs in the states construction of buildings industry, 17,500 jobs in heavy and civil engineering construction industry, and 6,400 jobs in specialty trade contractors. Texas leisure and hospitality industry (arts, entertainment, recreation, accommodations and food services) gained 46,900 jobs from December 2011 to December 2012, an annual growth rate of 4.5 percent (Table 2 and Figure 3). The states professional and business services industry gained 45,800 jobs from December 2011 to December 2012, an annual growth rate of 3.4 percent (Table 2 and Figure 4). Job gains consisted of 38,400 jobs in the states administrative and support services industry and 7,800 in professional, scientific and technical services industry while the states management of companies and enterprises industry lost 400 jobs. Texas education and health services industry added 47,800 jobs from December 2011 to December 2012, an annual growth rate of 3.3 percent (Table 2 and Figure 5). Job gains consisted of 47,000 jobs in the states health services industry and 800 jobs in the states education industry. The states trade industry gained 51,400 jobs from December 2011 to December 2012, a 3 percent increase (Table 2 and Figure 6). Job gains consisted of 17,600 in wholesale 1

trade and 33,800 jobs in the retail trade industry. Trade is the states largest industry after government, accounting for 16.2 percent of nonfarm employment (Table 3). The other services industry (repair and maintenance, personal and laundry services, religious, civic and professional organizations) gained 10,000 jobs over the year, a 2.7 percent increase (Table 2 and Figure 7). The states mining and logging industry gained 5,400 jobs from December 2011 to December 2012. Since January 2012, mining employment growth rate has fallen from 18 percent to 2.1 percent in December 2012 mainly due to falling crude oil prices from more than $100 to $88 per barrel (Table 2 and Figure 8). The states transportation, warehousing and utilities industry gained 5,600 jobs over the year, a 1.3 percent growth rate (Table 2 and Figure 9). Texas financial activities (finance, insurance, real estate, rental and leasing services) added 6,600 jobs from December 2011 to December 2012, an annual growth rate of one percent (Table 2 and Figure 10). Job gains consisted of 2,600 jobs in the states real estate, rental and leasing industry and 4,000 in the states finance and insurance industry. The states manufacturing industry gained 6,800 jobs from December 2011 to December 2012, an annual growth rate of 0.8 percent (Table 2 and Figure 11). The states durable manufacturing industry gained 10,700 jobs while the states nondurable manufacturing lost 3,900 jobs. Major job gains in the states durable goods manufacturing industry were in fabricated metal product manufacturing (7,300 jobs), machinery manufacturing (3,300), transportation equipment manufacturing (3,800), electric equipment, appliance and component manufacturing (800), and furniture and related product manufacturing (1,000). Major job losses in the states durable goods manufacturing industry were in computer and electronic product manufacturing (3,300), nonmetallic mineral product manufacturing (700), and wood product manufacturing (800). Major job gains in the states nondurable manufacturing industry were in chemical manufacturing (1,900), petroleum and coal products manufacturing (600), and beverage and tobacco product manufacturing (300). Major job losses in this industry were in food manufacturing (2,300), printing and related support manufacturing (1,400), and paper manufacturing (300). The states government sector experienced its third month of job gains in December 2012 after 19 months of job losses. The sector gained 7,000 jobs from December 2011 to December 2012, an annual growth rate of 0.4 percent (Table 2 and Figure 12). Government job gains consisted of 2,300 local government jobs and 7,000 state government jobs. The states federal government lost 2,300 jobs over the period. Texas information industry (internet service providers, web search portals, publishing industries, broadcasting and telecommunications) lost 3,400 jobs from December 2011 to December 2012, an annual decline rate of 1.7 percent (Table 2 and Figure 13).

Texas Metropolitan Statistical Areas All Texas metro areas except Sherman-Denison, Lubbock, and Brownsville-Harlingen had more jobs in December 2012 than in December 2011 (Table 4). Austin-Round RockSan Marcos ranked first in job creation followed by Wichita Falls, Odessa, HoustonSugar Land-Baytown, and Fort Worth-Arlington (Table 4). The Austin-Round Rock-San Marcos metro areas annual employment growth rate from December 2011 to December 2012 was 4.3 percent (Table 4 and Figure 14). The Dallas-Plano-Irving metro area posted an annual employment growth rate of 2.5 percent in December 2012 (Table 4 and Figure 15). The metro area ranked ninth in employment growth rate (Table 4). The Fort Worth-Arlington metro area and the Houston-Sugar Land-Baytown metro area posted an annual employment growth rate of 3.2 percent in December 2012 and ranked fourth among Texas metro areas in employment growth rate (Table 4 and Figures 16 and 17). The San Antonio-New Braunfels metro area had a 2.6 percent annual employment growth rate in December 2012 , ranking it eighth (Table 4 and Figure 18). The states actual unemployment rate in December 2012 was 6 percent. Midland had the lowest unemployment rate followed by Odessa, Amarillo, and San Angelo (Table 5). Table 1 Texas and U.S. Labor Markets Nonfarm Employment Texas United States Private Employment Texas United States Dec. 2012 10,972,800 134,822,000 Dec. 2012 9,164,500 112,548,000 Dec. 2011 10,707,300 132,965,000 Dec. 2011 8,906,000 110,632,000 Change Absolute Percent 265,500 2.5 1,857,000 1.4 Absolute 258,500 1,916,000 Percent 2.9 1.7

Actual Seasonally Adjusted Unemployment Rate Dec. 2012 Dec. 2011 Dec. 2012 Dec. 2011 Texas 6.0 7.1 6.1 7.4 United States 7.6 8.3 7.8 8.5 Sources: Texas Workforce Commission and Bureau of Labor Statistics

Table 2
Texas Industries and Texas Government Sector Ranked by Employment Growth Rate from December 2011 to December 2012 Change Industry Dec. 2012 Dec. 2011 Absolute Percent Construction 588,600 553,000 35,600 6.4 Leisure & Hospitality 1,098,000 1,051,100 46,900 4.5 Professional & Business Services 1,407,300 1,361,500 45,800 3.4 Education & Health Services 1,496,800 1,449,000 47,800 3.3 Trade 1,774,900 1,723,500 51,400 3.0 Other Services 385,900 375,900 10,000 2.7 Mining and Logging 259,100 253,700 5,400 2.1 Transportation, Warehousing, Utilities 455,200 449,600 5,600 1.3 Financial Activities 654,200 647,600 6,600 1.0 Manufacturing 852,400 845,600 6,800 0.8 Government 1,808,300 1,801,300 7,000 0.4 12 Information 192,100 195,500 3,400 1.7 Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University Rank 1 2 3 4 5 6 7 8 9 10 11

Table 3 Texas Industries and Government Shares of Employment Industry Mining and Logging Construction Manufacturing Trade Transportation, Warehousing, Utilities Information Financial Activities Professional and Business Services Education and Health Services Leisure and Hospitality Other Services Government Sector December 2012 2.4 5.4 7.8 16.2 4.2 1.8 6.0 12.8 13.6 10.0 3.5 16.5 December 1990 2.3 4.8 13.1 18.2 4.3 2.5 6.3 9.2 9.6 8.1 3.7 17.9

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University. Note: Components may not add to 100 due to rounding.

Table 4 Texas Metropolitan Areas Ranked by Employment Growth Rate, December 2011 to December 2012 Rank 1 2 3 4 4 6 7 8 Metro Area Percent Growth Rate Austin-Round Rock-San Marcos 4.3 Wichita Falls 3.6 Odessa 3.5 Houston-Sugar Land-Baytown 3.2 Fort Worth-Arlington 3.2 Texarkana 2.9 Midland 2.8 San Antonio-New Braunfels 2.6 Texas 2.5 9 Abilene 2.5 9 Dallas-Plano-Irving 2.5 11 Victoria 2.4 12 Waco 2.3 13 San Angelo 2.1 14 Tyler 1.8 15 Laredo 1.6 16 Amarillo 1.5 16 Killeen-Temple-Fort Hood 1.5 18 Corpus Christi 1.4 19 Beaumont-Port Arthur 1.3 20 El Paso 1.2 21 McAllen-Edinburg-Mission 0.9 21 Longview 0.9 23 College Station-Bryan 0.7 24 Sherman-Denison 0.9 25 Lubbock 1.4 26 Brownsville-Harlingen 3.4 Source: Texas Workforce Commission Note: The data are currently under review by the U.S. Bureau of Labor Statistics

Table 5 Texas Metropolitan Areas Ranked by Unemployment Rate, December 2012 Rank 1 2 3 4 5 5 7 7 9 10 10 12 13 13 13 13 17 Metro Area Midland Odessa Amarillo San Angelo Abilene Lubbock Austin-Round Rock-San Marcos College Station-Bryan Victoria Longview Wichita Falls Waco Texarkana Corpus Christi Fort Worth-Arlington San Antonio-New Braunfels Dallas-Plano-Irving Texas 18 Houston-Sugar Land-Baytown 19 Laredo 20 Tyler 21 Killeen-Temple-Fort Hood 22 Sherman-Denison 23 El Paso 24 Beaumont-Port Arthur 25 Brownsville-Harlingen 25 McAllen-Edinburg-Mission Source: Texas Workforce Commission Unemployment Rate, Percent 3.1 3.7 4.1 4.6 4.7 4.7 5.0 5.0 5.2 5.5 5.5 5.6 5.7 5.7 5.7 5.7 5.9 6.0 6.0 6.1 6.2 6.6 6.7 8.4 10.0 10.3 10.3

Figure 1 Nonfarm Employment Growth Rates for United States and Texas, 20092012
4 Percent 2 0 -2 -4 -6 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Texas U.S.

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 2 Employment Growth Rates in Texas Construction Industry, 20092012

10 Percent 5 0 -5 -10 -15 -20 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 3 Employment Growth Rates in Texas Leisure and Hospitality Industry, 20092012
6 Percent 4 2 0 -2 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 4 Employment Growth Rates in Texas Professional and Business Services Industry, 20092012
8 Percent 4 0 -4 -8 -12 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 5 Employment Growth Rates in Texas Education and Health Services Industry, 20092012
Percent 4

-2 2009M01

Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 6 Employment Growth Rates in Texas Trade Industry, 20092012

4 Percent 2 0 -2 -4 -6 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 7 Employment Growth Rates in Texas Other Services Industry, 20092012

6 Percent 4 2 0 -2 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 8 Employment Growth Rates in Texas Mining and Logging Industry, 20092012
20 Percent 10 0 -10 -20 -30 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

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Figure 9 Employment Growth Rates in Texas Transportation, Warehousing, and Utilities Industry, 20092012
8 Percent 4 0 -4 -8 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 10 Employment Growth Rates in Texas Financial Activities Industry, 20092012

4 Percent 2 0 -2 -4 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

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Figure 11 Employment Growth Rates in Texas Manufacturing Industry, 20092012

4 Percent 0 -4 -8 -12 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 12 Employment Growth Rates in Texas Government Sector, 20092012

6 Percent 4 2 0 -2 -4 -6 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

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Figure 13 Employment Growth Rates in Texas Information Industry, 20092012

2 Percent 0 -2 -4 -6 -8 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 14 Nonfarm Employment Growth Rates, Austin-Round Rock-San Marcos, 20092012

6 Percent 4 2 0 -2 -4 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

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Figure 15 Nonfarm Employment Growth Rates, Dallas-Plano-Irving, 20092012

4 Percent 2 0 -2 -4 -6 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 16 Nonfarm Employment Growth Rates, Fort Worth-Arlington, 20092012

4 Percent 2 0 -2 -4 -6 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

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Figure 17 Nonfarm Employment Growth Rates, Houston-Sugar Land-Baytown, 20092012

4 Percent 2 0 -2 -4 -6 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Figure 18 Nonfarm Employment Growth Rates, San Antonio-New Braunfels, 20092012

4 Percent 2 0 -2 -4 2009M01 Year:Month 2009M07 2010M01 2010M07 2011M01 2011M07 2012M01 2012M07

Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

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