AT TEXAS A&M UNIVERSITY

Monthly Review of the Texas Economy

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

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Monthly Review of the Texas Economy July 2011

By Ali Anari and Mark G. Dotzour Texas, aided by a robust private sector, gained 225,200 nonfarm jobs from June 2010 to June 2011, an annual growth rate of 2.2 percent compared with 0.9 percent for the United States. The states private sector added 251,900 jobs, an annual growth rate of 3 percent compared with 1.7 percent for the nations private sector (Table 1 and Figure 1). Texas seasonally adjusted unemployment rate increased to 8.2 percent in June 2011 from 8.1 in June 2010. The nations rate decreased from 9.5 to 9.2 percent (Table 1). Table 2 shows Texas industries ranked by employment growth rate from June 2010 to June 2011. Table 3 shows the relative importance of the states industries based on number of employees. All Texas industries except the information industry and the states government sector had more jobs in June 2011 than in June 2010 (Table 2). The states mining and logging industry ranked first in job creation and posted an annual employment growth rate of 16.8 percent from June 2010 to June 2011 (Table 2 and Figure 2). The average number of active rotary rigs increased from 700.9 in July 2010 to 887.2 in July 2011 according to Hughes Tool Co. The states construction industry ranked second in job creation, adding 30,900 jobs from June 2010 to June 2011, a 5.4 percent rate increase (Table 2 and Figure 3). Job gains consisted of 5,500 in construction of buildings, 11,600 in heavy and civil engineering construction, and 13,800 in specialty trade contractors. The states professional and business services industry gained 57,200 jobs from June 2010 to June 2011, an annual growth rate of 4.5 percent (Table 2 and Figure 4). Job gains consisted of 48,700 jobs in the states administrative and support services industry, and 8,800 jobs in professional, scientific and technical services industry. The states management of companies and enterprises industry lost 300 jobs during the period. The states leisure and hospitality industry (arts, entertainment, recreation, accommodations and food services) gained 31,200 jobs from June 2010 to June 2011, an annual growth rate of 3 percent (Table 2 and Figure 5). The states education and health services industry added 34,600 jobs from June 2010 to June 2011, an annual growth rate of 2.5 percent (Table 2 and Figure 6). The states health services industry gained 39,300 jobs while the states education industry lost 4,700 jobs. The states manufacturing industry gained 20,500 jobs from June 2010 to June 2011, an annual growth rate of 2.5 percent (Table 2 and Figure 7). All job gains were in the states durable goods manufacturing. Major job gains in the states durable goods manufacturing industry were in fabricated metal product manufacturing (9,200 jobs), machinery

manufacturing (10,100), computer and electronic product manufacturing (2,300), transportation equipment manufacturing (3,000), and primary metal manufacturing (1,300). Major job losses in the states durable goods manufacturing industry were in nonmetallic mineral product manufacturing (2,100), furniture and related product manufacturing (600), electric equipment, appliance, and component manufacturing (700), and wood product manufacturing (1,000). Major job losses in the states nondurable manufacturing industry were in printing and related support manufacturing (1,400), petroleum and coal products manufacturing (500), plastic and rubber manufacturing (300), paper manufacturing (400) and chemical manufacturing industry (900). The states transportation, warehousing and utilities industry gained 9,800 jobs over the year, a 2.4 percent growth rate (Table 2 and Figure 8). The states trade industry gained 32,700 jobs from June 2010 to June 2011, a 2 percent increase (Table 2 and Figure 9). Job gains consisted of 14,000 in the wholesale trade and 18,700 jobs in the retail trade industry. Trade is the states largest industry after government, accounting for 15.7 percent of nonfarm employment (Table 3). The other services industry (repair and maintenance, personal and laundry services, religious, civic and professional organizations) gained 5,600 jobs over the year, a 1.5 percent increase (Table 2 and Figure 10). The states financial activities (finance, insurance, real estate, rental and leasing services) added 4,400 jobs from June 2010 to June 2011, an annual growth rate of 0.7 percent (Table 2 and Figure 11). Job gains consisted of 2,300 jobs in the states real estate, rental and leasing industry and 2,100 in the states finance and insurance industry. The states government sector lost 26,700 jobs from June 2010 to June 2011, an annual decline rate of 1.4 percent (Table 2 and Figure 12). Government job losses consisted of 3,800 in state government and 31,300 in the states federal government. The states local government gained 8,400 jobs over the same period. The states information industry (internet service providers, web search portals, publishing industries, broadcasting and telecommunications) lost 9,800 jobs from June 2010 to June 2011, a 5 percent rate decrease (Table 2 and Figure 13). Texas Metropolitan Statistical Areas Five Texas metro areas (Killeen-Temple-Fort Hood, Wichita Falls, San Angelo, Brownsville-Harlingen and Abilene) had fewer jobs in June 2011 than in June 2010 (Table 4). Longview ranked first in job creation, followed by Odessa, Dallas-PlanoIrving, Laredo, College Station-Bryan, Midland, and Corpus Christi (Table 4). The Austin-Round Rock-San Marcos metro areas annual employment growth rate from June 2010 to June 2011 was 1.2 percent, ranking it 16th (Table 4 and Figure 14).

The Dallas-Plano-Irving metro area posted an annual employment growth rate of 2.4 percent in June 2011 (Table 4 and Figure 15). The metro area ranked third in employment growth rate (Table 4). The Fort Worth-Arlington metro areas annual employment growth rate from June 2010 to June 2011 was 1.7 percent, ranking it 11th (Table 4 and Figure 16). The Houston-Sugar Land-Baytown metro area posted an annual employment growth rate of 2 percent for the period and ranked 9th among Texas metro areas in employment growth rate (Table 4 and Figure 17). The San Antonio-New Braunfels metro area had a 1.4 percent annual employment growth rate, ranking it 14th (Table 4 and Figure 18). The states actual unemployment rate in June 2011 was 8.8 percent. Midland had the lowest unemployment rate followed by Amarillo, Odessa, San Angelo, and College Station-Bryan (Table 5). Table 1 Texas and U.S. Labor Markets Nonfarm Employment Texas United States Private Employment Texas United States June 2011 10,623,600 132,079,000 June 2011 8,772,900 110,037,000 June 2010 10,398,400 130,908,000 June 2010 8,521,000 108,178,000 Change Absolute Percent 225,200 2.2 1,171,000 0.9 Absolute Percent 251,900 3.0 1,859,000 1.7

Actual Seasonally Adjusted Unemployment Rate June 2011 June 2010 June 2011 June 2010 Texas 8.8 8.4 8.2 8.1 United States 9.3 9.6 9.2 9.5 Sources: Texas Workforce Commission and Bureau of Labor Statistics

Table 2
Texas Industries Ranked by Employment Growth Rate from June 2010 to June 2011 Change Rank Industry June 2011 June 2010 Absolute Percent 1 Mining and Logging 241,700 206,900 34,800 16.8 2 Construction 599,300 568,400 30,900 5.4 3 Professional & Business Services 1,332,300 1,275,100 57,200 4.5 4 Leisure & Hospitality 1,067,600 1,036,400 31,200 3.0 5 Education & Health Services 1,420,600 1,386,000 34,600 2.5 5 Manufacturing 831,500 811,000 20,500 2.5 7 Transportation, Warehousing, Utilities 427,100 417,300 9,800 2.4 8 Trade 1,663,300 1,630,600 32,700 2.0 9 Other Services 371,700 366,100 5,600 1.5 10 Financial Activities 630,200 625,800 4,400 0.7 11 Government 1,850,700 1,877,400 26,700 1.4 12 Information 187,600 197,400 9,800 5.0 Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Table 3 Texas Industries and Government Shares of Employment June June Industry 2011 1990 Mining and Logging 2.8 2.8 Construction 5.6 5.0 Manufacturing 7.8 13.3 Trade 15.7 17.8 Transportation, Warehousing, Utilities 4.0 4.2 Information 1.8 2.5 Financial Activities 5.9 6.5 Professional and Business Services 12.5 9.1 Education and Health Services 13.4 9.4 Leisure and Hospitality 10.0 8.6 Other Services 3.5 3.7 Government Sector 17.5 17.4 Sources: Texas Workforce Commission and Real Estate Center at Texas A&M University

Table 4 Texas Metropolitan Areas Ranked by Employment Growth Rate, June 2010 to June 2011 Rank 1 2 3 3 3 6 6 Metro Area Longview Odessa Dallas-Plano-Irving Laredo College Station-Bryan Midland Corpus Christi Texas 8 Victoria 9 Houston-Sugar Land-Baytown 9 Lubbock 11 Fort Worth-Arlington 12 Waco 13 Beaumont-Port Arthur 14 San Antonio-New Braunfels 15 McAllen-Edinburg-Mission 16 Austin-Round Rock-San Marcos 17 Amarillo 18 El Paso 19 Sherman-Denison 20 Tyler 21 Texarkana 22 Killeen-Temple-Fort Hood 23 Wichita Falls 24 San Angelo 25 Brownsville-Harlingen 26 Abilene Source: Texas Workforce Commission Percent Growth Rate 4.2 3.5 2.4 2.4 2.4 2.3 2.3 2.2 2.2 2.0 2.0 1.7 1.6 1.5 1.4 1.3 1.2 1.1 0.8 0.5 0.4 0.0 0.3 1.4 1.6 1.7 3.7

Table 5 Texas Metropolitan Areas Ranked by Unemployment Rate, June 2011 Rank 1 2 3 4 5 5 7 8 8 10 11 11 13 13 15 16 16 18 Metro Area Midland Amarillo Odessa San Angelo College Station-Bryan Lubbock Longview Abilene Austin-Round Rock-San Marcos Victoria San Antonio-New Braunfels Texarkana Tyler Wichita Falls Waco Corpus Christi Fort Worth-Arlington Dallas-Plano-Irving Texas 19 Killeen-Temple-Fort Hood 20 Houston-Sugar Land-Baytown 20 Laredo 22 Sherman-Denison 23 El Paso 24 Beaumont-Port Arthur 25 Brownsville-Harlingen 26 McAllen-Edinburg-Mission Source: Texas Workforce Commission Unemployment Rate, Percent 5.2 6.4 6.9 7.2 7.3 7.3 7.4 7.6 7.6 7.7 8.1 8.1 8.2 8.2 8.4 8.6 8.6 8.7 8.8 8.9 9.0 9.0 9.2 10.9 11.7 12.9 13.0

Figure 1 Nonfarm Employment Growth Rates for United States and Texas, 20082011
4 2 0 -2 -4 -6 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent Texas U.S.

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

Figure 2 Employment Growth Rates in Texas Mining and Logging Industry, 20082011
20 Percent 10 0 -10 -20 -30 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07

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

Figure 3 Employment Growth Rates in Texas Construction Industry, 20082011

10 Percent

-10 Year:Month 2008M01 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07

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, 20082011
8 4 0 -4 -8 -12 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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

Figure 5 Employment Growth Rates in Texas Leisure and Hospitality Industry, 20082011
6 4 2 0 -2 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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

Figure 6 Employment Growth Rates in Texas Education and Health Services Industry, 20082011
6 4 2 0 -2 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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

Figure 7 Employment Growth Rates in Texas Manufacturing Industry, 20082011

5 Percent

-5

-10 Year:Month 2008M01 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07

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

Figure 8 Employment Growth Rates in Texas Transportation, Warehousing, and Utilities Industry, 20082011
4 2 0 -2 -4 -6 -8 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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

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Figure 9 Employment Growth Rates in Texas Trade Industry, 20082011

4 2 0 -2 -4 -6 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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

Figure 10 Employment Growth Rates in Texas Other Services Industry, 20082011

4 Percent

-2 Year:Month 2008M01 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07

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

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Figure 11
Employment Growth Rates in Texas Financial Activities Industry, 20082011
2 Percent

-2

-4 Year:Month 2008M01 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07

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

Figure 12 Employment Growth Rates in Texas Government Sector, 20082011

6 4 2 0 -2 -4 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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, 20082011

4 Percent

-4

-8 Year:Month 2008M01 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07

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

Figure 14 Nonfarm Employment Growth Rates, Austin-Round Rock-San Marcos, 20082011

6 4 2 0 -2 -4 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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, 20082011

4 2 0 -2 -4 -6 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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

Figure 16 Nonfarm Employment Growth Rates, Fort Worth-Arlington, 20082011

4 2 0 -2 -4 -6 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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, 20082011

4 2 0 -2 -4 -6 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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

Figure 18 Nonfarm Employment Growth Rates, San Antonio-New Braunfels, 20082011

4 2 0 -2 -4 2008M01 Year:Month 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 Percent

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

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