By Lynn Brezosky
San Antonio Express-News
San Antonio — The flourishing energy sector along with across-the-board private sector hiring will keep Texas’ economic growth moving faster than the nation’s, an economist with the Federal Reserve Bank of Dallas predicted Wednesday.
“We’ve gone from recovery to expansion,” senior economic policy adviser Keith Phillips told those attending the San Antonio Area Foundation’s annual meeting and investment luncheon. “The United States is at least a couple of years away from regaining jobs, where in Texas almost all of the large (urban) areas regained all the jobs lost and are now adding to that.”
Petroleum jobs helped put Texas at No. 3 in terms of job growth. Like Texas, No. 1 North Dakota and No. 2 Utah are experiencing shale booms.
Texas took a hit when energy prices collapsed in 2009, but now is benefiting from both the bounce back in oil prices and the use of hydraulic fracturing.
“They say there’s hundreds of new millionaires created every month in the Eagle Ford, and I don’t doubt that,” he said.
The bad news is that the labor-intensive jobs needed to get the wells started may have begun to drop off as wells shift into production.
“I don’t think we’re going to see any declines this year in mining (jobs), but we’re not likely to see the big gains that we saw early last year and in 2011,” he said. “Pumping oil doesn’t take much labor. It’s the drilling and setting up these wells that take up a lot of the labor.”
The number of jobs peaked nationally and in Texas in 2008 before declining as the Great Recession set in.
The nation as a whole is still 2.3 percent below its peak, reached in January 2008.
Beyond oil and gas jobs, the state has a strong technology sector and has remained a top exporter, Phillips said. In addition, the housing market never sagged to the extent it did in other states, and household finances are relatively stable. About 8.8 percent of Texas mortgage holders remain “underwater,” compared with 57 percent of those in Nevada and 22 percent of mortgage holders nationwide. These factors have led to job growth in sectors beyond oil and gas.
In terms of metropolitan areas, Austin leads the pack in hiring, followed by Houston, as a hub for oil and gas, and San Antonio, which has proven itself one of the most “recession proof” cities in America, Phillips said.
The national economy had been picking up speed until late 2012, when business investment dropped off amid uncertainty over the election and the potential “fiscal cliff.” The temporary falloff in military spending didn’t help, Phillips said.
The downs were offset by gains in consumer spending, thanks to a better housing market and overall consumer finances, but the consensus among blue-chip forecasters can be summed up as a “disappointingly slow” 2013, he said
“While the U.S. economy’s been kind of growing moderately, recovering moderately over the past several years, the Texas economy has been getting some attention because its economy has been quite a bit stronger than the national average,” he said.