HOUSTON — Texas will likely see slow job growth in 2016, despite an oil bust that has led employers in Houston and other oil-focused cities to lay off thousands of workers.
The Federal Reserve Bank of Dallas said Texas’ payrolls expanded by 1.1 percent in the first quarter of 2016, after growing 1.3 last year and 3.7 percent seen during the boom year of 2014.
Houston employers, which are more focused on oil and gas than some others in the state, have shed 5,500 jobs so far in 2016. So far, those layoffs have been more than offset by hiring in other Texas regions. But the energy bust has weighed on growth, and it’s beginning to spread to other sectors and cities, said Dallas Fed business economist Emily Kerr.
“Economic growth in Austin and in Dallas continued to boom in 2014 and even through 2015, but now in 2016 so far we’ve seen a deceleration in job growth in those metros,” Kerr said in a written statement. “[They’re] still growing—unlike Houston that saw declines—but at a much slower pace, and that’s largely a result of these spillover effects from the contracting energy sector and slowing in Houston.”
The energy bust has been offset by strong growth in Texas sectors such as real estate and health care. In Houston, where hospitals have grown to become a large part of the economy, health care growth has particularly helped to ease some of the pain of $45 per barrel oil.
“Despite the weakness that we’re seeing in Houston and the energy sector and the slowing that we’re seeing in some of the other sectors, we do expect the Texas economy to post positive job growth this year,” Kerr said, in a statement.