South Texas Recovers from Harvey

November 14, 2017
By Robert A. Dye, Ph.D., Daniel Sanabria

Parts of South Texas were drenched with more than 50 inches of rainfall in late August as Hurricane Har-vey made landfall near Rockport, Texas, west of Houston. The record setting flooding that followed in the Hou-ston area made Harvey one of the costliest natural disasters in U.S. history. Major components of the South Tex-as industrial complex of refineries, pipelines and petrochemical facilities were shut-in due to damage from the storm and also due to the need for employees to tend to their households. Before the hurricane, Texas was showing increased hiring and economic momentum following the oil price downdraft of 2015. In July, the state added 21,700 payroll jobs. However, August, state payrolls showed no net gain, and September saw a net loss of 7,300 jobs. Fortunately, the South Texas industrial complex bounced back quickly. By mid-September most refin-eries had restarted. By the end of October, Gulf Coast refinery runs were near their pre-storm levels. We expect that the industrial base of South Texas will suffer no long-term damage from Hurricane Harvey. However, the consequences to individuals and households in the Houston area will linger. Low-to-middle income households are particularly vulnerable to the combination of lost wages and emergency expenses. Uninsured home repairs will be a further drain on household wealth. Lower home values in flood prone areas will also hurt households. We expect city and regional authorities in South Texas to try to upgrade flood control infrastructure and develop new strategies for future floods. This may put additional pressure on the region’s tax base going forward.

For a PDF version of this report click here: TX_Outlook_1117.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.