November 2018 TX Economic Outlook

Robert A. Dye, Ph.D.


Daniel Sanabria

Top of the Texas capital building

The Texas economy is improving rapidly after limping through 2015 and 2016.

Texas Is Well Positioned for Growth

The Texas economy is improving rapidly after limping through 2015 and 2016. Support is coming from a revitalized energy sector, a stronger U.S. economy, an improving Houston-area economy and ongoing in-migration to the state. Crude oil prices increased through 2018, from near $58/barrel for WTI crude in early January to $76/barrel in early October. Along with stronger pricing, the Texas drilling rig count increased steadily through the first half of 2018, from 453 rigs in early January to 536 rigs in early June. Since June, the rig count has stabilized near 530 rigs through early November. The rig count is only a rough proxy for all oil field activity, indicating that conditions in the state’s energy sector have improved significantly since bottoming out in 2016. The U.S. economy has also improved. We expect the strong 4.2 percent real GDP growth from Q2 will be the high water mark for the U.S. economy for 2018 and 2019. It came at a good time for Texas, increasing demand for Texas goods and services as Houston was recovering from the floods after Hurricane Harvey. Houston suffered with back-to-back blows coming from a weak oil market in 2014 and Hurricane Harvey. Since late 2017, job growth in the Houston metropolitan area has re-engaged and is on par with 2012 and 2013, when Houston generated about 9,000 net new jobs per month. Texas was still attracting about 50,000 new residents a quarter through 2017. However, as we get to the end of the intercensal period from 2010 to 2020, demographic estimates become more uncertain. We expect the 2020 census data to confirm ongoing strong in-migration to Texas.

For a PDF version of this article, please click here: November 2018 TX Economic Outlook.

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 the 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.

November 9, 2018
Robert A. Dye, Ph.D., Senior Vice President and Chief Economist at Comerica Bank

Robert A. Dye, Ph.D.

Senior Vice President and Chief Economist
Daniel Sanabria, Senior Economist at Comerica Bank

Daniel Sanabria

Senior Economist

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