Federal Reserve Bank of Dallas

Texas Economic Update

Mine Yücel 

Federal Reserve Bank of Dallas

February 8, 2010

Federal Reserve Bank of Dallas

Texas Economic Update

• Texas may be out of recession 

• Lost 334,600 jobs in 2009• Decline broad based across sectors• Manufacturing stabilizing

• Housing expanding• Worst may have passed

2

Federal Reserve Bank of Dallas

Best Performing Metros ( Milken Institute )

• Top 5– Austin #1, Killeen‐Temple‐Fort Hood #2, McAllen‐

Edinburg‐Mission #4, Houston‐Sugarland‐Baytown #5

• Top 20– San Antonio #11, FW‐Arlington #12, Dallas‐Plano‐Irving 

#13, El Paso #14, Corpus Christi #16

• Top 25 Smallest Metros– Midland #1, Longview #2, Tyler #4, Odessa #5, College 

Station‐Bryan #14, Texarkana #17, Waco #18, Laredo #20, 

Abilene #21.

3

Federal Reserve Bank of Dallas4

Texas’

employment growth bests nation’s

-8

-6

-4

-2

0

2

4

6

8

2002 2003 2004 2005 2006 2007 2008 2009

Texas US

M/M,SAAR

Federal Reserve Bank of Dallas5

Metro employment growth

-25

-20

-15

-10

-5

0

5

10M/M, SAAR

Austin - Round Rock Dallas - Plano - Irving MD El Paso

Ft. Worth - Arlington MD Houston - Baytown - Sugar Land San Antonio

Federal Reserve Bank of Dallas6

Industry Employment Growth

-40

-30

-20

-10

0

10

20

30

(NAICS Super Sectors, SA by FRB DallasMonthly Growth. Jan. 2009 - Dec. 2009)

M/M,SAAR

Oil & Gas Extraction and Mining Support

(1.8%)

Financial Activities

(6.1%)

Trade, Transp & Utilities(19.7%)

Manufacturing(7.8%)

Educational & Health Services

(13.4%)

Construction(5.4%)

Leisure & Hospitality

(9.7%)

Information(2.0%)

Prof & Business Services(12.1%)

Government(18.4%)

Federal Reserve Bank of Dallas7

Construction bottoming out?

0

500

1000

1500

2000

2500

3000

3500

1992 1997 2002 2007

Real $, Mil5MMA, SA

Residential

Nonresidential

Nonbuilding

Federal Reserve Bank of Dallas8

New home construction steadying

45

65

85

105

125

145

165

185

205

225

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Real Contract Values

Permits

Starts

Index, SA, 5MMAJan 2000= 100

Federal Reserve Bank of Dallas9

Housing permits picking up 

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

0

1,000

2,000

3,000

4,000

5,000

6,000

' 89 ' 90 ' 91 ' 92 ' 93 ' 94 ' 95 ' 96 ' 97 ' 98 ' 99 ' 00 ' 01 ' 02 ' 03 ' 04 ' 05 ' 06 ' 07 ' 08 ' 09 ' 10

Austin

Dallas/Ft. Worth

Houston

San Antonio

Texas

Number of permitsSA, 5MMA

Source: Census Bureau, seasonal adjustment by FRB Dallas

Number of permitsSA, 5MMA

Federal Reserve Bank of Dallas10

Dallas home prices stable

90

110

130

150

170

190

210

230

250

270

290

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Dallas

Miami

Composite 20S.F.

Las Vegas

New York

Index, 2000= 100

Federal Reserve Bank of Dallas11

Mortgage delinquencies rising

Federal Reserve Bank of Dallas12

Commercial real estate investment declines

-90

-80

-70

-60

-50

-40

-30

-20

-10

0

Office Industrial Retail Apartment

Dallas U.S.Percent, YTD Nov' 09

Federal Reserve Bank of Dallas13

Noncurrent Commercial Loans Rising

0

200

400

600

800

1000

1200

1400

1600

1800

2005 2006 2007 2008 2009

Index, 1Q' 05= 100

11K Commercial(1.5)

11K Residential(1.4)

U.S. Commercial(3.5)

U.S. Residential(6.7)

Note: Figures in parenthesis denote nonperforming loans as a percentage of gross loans of that specific type

Federal Reserve Bank of Dallas14

Commercial banks’

exposure to real estate by Federal Reserve District 

(Q3 2009)

Total Commercial Real Estate Loans(% of gross assets)

Atlanta 28.3St. Louis 28.3Dallas 27.7Chicago 25.8Kansas City 25.2U.S. 13.6Minneapolis 13.4New York 12.2Richmond 12.0San Francisco 10.6Philadelphia 10.3Cleveland 8.8Boston 6.8

Federal Reserve Bank of Dallas15

Rig counts mirror energy price uptick

0

500

1000

1500

2000

2500

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

U.S. Rig Count

Rig Count

Texas Rig Count

Federal Reserve Bank of Dallas16

50

100

150

200

250

300

350

400

450

500

550

600

650

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

TX total MexicoCanada European Union (27)Asia** Latin America*China

8%

35%

8%

12%

18% 14%

5%

other

Index 97Q1= 100Real $, SA

*Note: Latin America excludes Mexico**Note: Asia excludes China

2009:Q3

Texas exports up

Federal Reserve Bank of Dallas17

Texas Population Growth

• Texas population grew by 478,000 in 08‐09• #1 in total population growth• #3 in % growth

–245,000 natural increase; 

–213,000 net  migration • 88,000 international• 143,000 domestic

Federal Reserve Bank of Dallas18

Summary

• National and state economies may be out of  recession

• Lost 334,600 jobs year‐to‐date• Economy may be turning the corner

• Texas long‐term fundamentals strong

Federal Reserve Bank of Dallas19

Questions?

• Please go to  www.dallasfed.org

for 

data and regional  information.