By Sam Baker, KERA News
http://stream.publicbroadcasting.net/production/mp3/kera/local-kera-879015.mp3
Dallas, TX –
The national recession did not spare Texas. The state's jobless rate last year topped eight percent for the first time in more than two decades. There are some signs of job growth for Texas in 2010, though - but slight, nothing dramatic. In KERA's economy segment, business economist D'Ann Petersen of the Federal Reserve Bank in Dallas explains to KERA's Sam Baker what she means by "flat is the new up."
D'ann Petersen: We've started to see a lot of stabilization across the economy, especially in housing, manufacturing, even in exports. So we are starting to see a flattening out of economic activity. Whether we see a large rebound remains in question, and we imagine employment won't pick up as strongly as we're used to in Texas in 2010.
Sam Baker: You mentioned three areas you were starting to see improvement in. Housing was one?
D'ann Petersen: Well, the first-time homebuyer credit has helped across the country, and that's certainly been true in Texas, as well. And we're even starting to hear from some of our building contacts that new construction is in the works. Now whether they can get financing for that remains to be seen.
Sam Baker: Construction took a big hit in 2009.
D'ann Petersen: Non-residential construction remains very weak. In fact, it may be near a historical low. And, in part, we saw that building boom, especially in Dallas we saw the Uptown area grow during the good times, and once the recession hit, it hit us kind of unexpectedly. We were one of the fastest growing economies in 2008, and by 2009 we knew we were in a recession. And so people aren't leasing buildings and we had all this new construction, so we have a high vacancy rate in Texas. And on the other side, people aren't buying and selling buildings as they were previous to the recession, so it's probably going to be one of the last sectors - the real estate and construction sector - to pull out of the recession.
Navigate the recession with KERA! Get tips on avoiding foreclosure, access job resources and more at kera.org/economy.
Sam Baker: The health care industry remains strong for Texas?
D'ann Petersen: Health care is the one sector that grew in Texas last year. We usually combine the health care sector with education and both are driven by population growth. And Texas, despite the recession, we saw population growth during the downturn. And this, in turn, is in turn boosting our health care industry. But this is not really just a Texas thing, it's true in the nation, too, and that's partly demographics. And as we get older and we have more people, we're going to demand more health care. And the health care sector is actually expanding. We're seeing expansion of hospitals, so that area of construction has actually been positive.
Sam Baker: College graduates coming out with degrees this spring - who's likely to fare best in finding a job?
D'ann Petersen: It's probably going to be in the service sector. Occupations like accounting, high tech occupations, lawyers, finance, even, may see some improvement.
Sam Baker: It's been said the recession was slow to get to Texas, are we looking at an equally slow recovery?
D'ann Petersen: I think we'll be very similar to the U.S. in terms of coming out of the recession. We may be even better poised in some areas to see improvement once the global economy and the national economy get their footing and start to take hold.
Sam Baker: How so?
D'ann Petersen: We didn't see the huge price declines as in other parts of the country. And while we have seen our share of foreclosures and delinquencies and bankruptcies, it hasn't been nearly as bad as other places in the country. Normally we do attract firms and people form other parts of the country because of our central location, because of our low cost of living. We do have relatively low taxes, a low cost of doing business, and that's why we tend to grow a little bit faster than the U.S. on average.
D'Ann Petersen is a business economist with the Federal Reserve Bank in Dallas.
Visit kera.org/economy for more related information.