On November 20, 2009, Texas Comptroller Susan Combs updated her economic outlook. Below we post the update in its entirety:
The Texas economy, the world’s 11th-largest, continues to fare better than those of many other states. But Texas is feeling the effects of the worldwide recession.
According to the National Bureau of Economic Research, the U.S. economy peaked in December 2007 and has been in recession since then. Although the Texas economy slowed with the nation’s late in 2008, Texas’ gross product expanded much faster than the U.S. economy (2.0 percent versus 0.4 percent) during calendar 2008.
Both the U.S. and Texas economies have contracted in 2009, but Texas continues to perform relatively better than the nation. The Comptroller’s office estimates that the Texas’ gross state product will contract by 1.7 percent during calendar 2009. The U.S. economy will shrink even more, by 2.5 percent for the year.
Jobs
Texas gained 41,700 jobs in October 2009, the largest monthly gain since October 2008.
Texas’ October 2009 unemployment rate was 8.3 percent, up from 8.2 percent in September. The October U.S. rate was 10.2 percent, up from 9.8 percent in September.
The U.S. lost 5.5 million jobs from October 2008 to October 2009. The Texas unemployment rate has been at or below the national rate for 34 consecutive months. In the 12 months ending in October 2009, Texas lost 307,200 jobs.
Housing
Thus far, Texas has weathered the national real estate crunch without significant damage to property values but sales and construction activity have slowed. Despite its continuing resiliency, Texas is not immune from the national real estate crunch.
5,550 building permits for single-family homes were issued in September 2009. The number of permits in the 12 months ending in September 2009 was 60,641, a decrease of 27 percent from the period one year earlier.
Multi-family building permits are also down, from 4,551 units in September 2008 to 1,541 units in September 2009. The number of permits issued in the 12 months ending in September 2009 was 21,213, a decrease of 63 percent from the period one year earlier.
In September, sales of existing single-family homes in Texas rose year over year for the first time since early 2007, as September 2009 sales were 4 percent higher than for September 2008. In Texas, the median price for existing single-family homes increased by 1.9 percent from September 2008 to September 2009.
The Texas foreclosure rate has remained largely stable for the past three years. Texas experienced
11,798 foreclosure filings in October 2009. In October 2009, the Texas foreclosure rate was one in every 800 mortgages. This was substantially better than Nevada’s one in 80, California’s one in 156, and Florida’s one in 168.
Consumer Confidence Index
Consumer confidence across the nation remains very weak. In October 2009, the U.S. index stood at 47.7 (with 1985 = 100). Texas and surrounding states fared better than the rest of the nation. Texas’ regional index continued its three-month rise to 71.7, but remains 7 percent lower than October 2008.
Oil and Natural Gas
The all-time high crude oil closing price was $145.29 on July 3, 2008. Crude oil futures closed at $77.46 per barrel on Nov. 19, 2009, 44 percent above the level of one year ago and more than double last winter’s lowest price of $33.98 in February. In fiscal 2008, production tax collections for natural gas were up 42 percent over fiscal 2007. Tax collections for oil were up 72 percent. Natural gas and oil production tax collections are significantly lower for the first two months of fiscal year 2010 over fiscal year 2009.
Taxes
Texas sales tax receipts for October 2009 were down 12.8 percent from October 2008. For fiscal 2009, state sales tax receipts are down 2.7 percent from fiscal 2008
Motor vehicle sales tax collections for fiscal 2009 were $2.569 billion, down 22.5 percent over fiscal 2008 amount. The nationwide core transaction price for a new car or truck during the first 15 days of October 2009 fell 2.08 percent to $24,758 from $25,283 in October 2008. Nationally, the lease share of new vehicle purchases increased to 23.6 percent of new vehicle purchases, that’s up from 21.4 percent in October 2008.
Stimulus Package
In Texas, an estimated $18 billion in federal stimulus money is flowing to state and local governments. The Comptroller’s office is tracking the $14.3 billion that comes through the state Treasury. The Comptroller’s analysis is ongoing. For the latest information, visit our ARRA Web site, A Texas Eye on the Dollars.
Cap and Trade
Efforts to reduce greenhouse gas emissions could negatively impact the Texas economy. The state could see 173,000 to 425,000 fewer jobs than expected in 2030 as a result of increased energy prices from the cap and trade portion of the recently proposed bill. The resulting decline in gross state product is estimated to be between $25 billion and $58 billion.
The Comptroller’s office is continuing to analyze potential implications and assess how green jobs and energy efficiency programs in the proposals could offset negative impacts. For the latest information, visit our Cap and Trade Web page. http://www.texasahead.org/economy/outlook.html