According to the Texas Workforce Commission, Texas job growth will continue at the moderate pace of 1.3 percent per year through 2012 and will be concentrated in the 4 largest Texas metro areas (Houston, Dallas, San Antonio and Austin).
The Houston area is likely to lead in term of job creation because of its diverse economy and growing sectors such as energy with oil and gas, transportation with increasing air traffic and the port of Houston with booming export activity, and health care. After 2011, the job growth in the Houston Metro area is likely to rise 2 to 2.5 percent annually.
It is important to note that the energy sector lost 3,000 jobs in 2009 and is forecasted to recoup the great majority of them by 2012. The health care sector is the largest employer in the Gulf Coast area and continued to create jobs throughout the recession and is expected to generate another 30,000 jobs by 2012. Many predictions will be altered, however, as a result of new health care legislation. Professional and business services and the education sectors combined are projected to create 25,000 jobs by 2012. Construction, manufacturing and retail trade sectors are expected to generate net losses in 2012. State and local government budget cuts are showing a rapid decrease in government jobs. Education and social services will be hit hard.
A high birth rate and high immigration rate for working adults will lead to population growth, which will drives up demand for goods and services and leads to job expansion. In 2010, more than 1,000 people per day moved to Texas, mostly to the 4 metro areas (Dallas-Fort Worth, Houston, San Antonio and Austin). According to the Census Bureau, more people moved to the Houston metro area (100,000) than anywhere else in the US from July 2008 to July 2009.
Many factors are leading to solid growth in the health care sector. The Texas population includes many baby boomers and many young families who both are medical care consumers. The new national health care bill will also require Texas to change its health care system as a quarter of the population currently lacks health insurance, which should lead to job creation. With a growing population, the state of Texas will be facing a rising demand for services like health care, education, and other services.
Consumers have become more saving prone. As a result the retail sector is predicted to fall short of regaining its 2008 employment level by 2012.
The Texas manufacturing sector is currently recovering from significant job losses in 2009 but the recent job creation is likely to be a temporary reprieve as customers replenish inventories. The Texas Manufacturing sector is forecasted to eliminate another 100,000 jobs by 2012. Strong gains in productivity allow manufacturers to increase production without creating new jobs; tight credit is also stunning grow and job creation. Texas manufacturers rely mainly on the Mexican market for exports and need to diversify and access stronger markets with better growth prospects such as China, Brazil, Russia and India.
The construction and real estate sector are expected to stagnate through 2012. Regarding residential housing, tight credit is still an undermining factor in a market with fewer buyers scaling back and opting for smaller more efficient homes. There is a debate over how well construction in the suburbs will recover given higher gas prices. The commercial real estate currently exhibits high excess inventory levels and is facing significant credit issues as banks scale down loans opportunities.
With global demand for energy on the rise, and the current uncertainty in the Middle East, oil prices have significantly increased over the last 12 months and the upward trend is expected to continue. This is good news for the energy sector where the job recovery is well under way. Most of the job creation will come from the oil and gas industry, especially white collar jobs, but also from the renewable energy sector.
Texas has a striking difference from the rest of the nation. It has suffered in today’s tough economic times, but its recovery has been rapid and the forecast for the future is solid.
Source: RDA Global Inc. A Forecast for the Texas Economy and Job Market: 2008-2012 – Texas Workforce Commission.
Source: Texas Workforce Commission – RDA Global Inc. A Forecast for the Texas Economy and Job Market: 2008-2012