Raub Report: Texas Job Growth Remains Strong
January 24, 2019
Job growth remains strong in the Lone Star State, in fact more than any other state, with an increase of 391,800 for the year, according to the latest figures released by the Texas Workforce Commission. This is actually more than double California’s growth, with Florida running a close second to Texas. (I believe all 391,800 are on the north section of Loop 1604 and Loop 410 every evening!) It is also our best year since 2014, when we added 420,400 jobs, just before the oil market collapsed and hiring softened considerably.
Another interesting barometer of growth is the U-Haul truck rental report, which measures personal trucking and trailer rentals into and out of cities and is a very insightful indicator. From the U-Haul website we learn, “U-Haul Growth Cities are calculated by the net gain of one-way U-Haul trucks entering a city versus leaving that city during a calendar year. Migration trends data is compiled from more than 2 million one-way U-Haul truck sharing transactions that occur annually.” So, for the third year in a row, Texas is ranked as the top-growth state, with a 5% annual growth. Cities in our area that ranked especially high are New Braunfels and Round Rock.
Jack Inselmann of American MetroStudy forecasts that home deliveries will approach 14,000 this year. The question is, “will they all sell?” The surge of mortgage rates in the middle part of 2018 caused a slowing in home sales, not dramatic, but noticeable. Mortgage rates have now backed off, partly due to the recent turmoil in the stock and bond markets. Where they go this year will depend on whether the Federal Reserve continues to raise the short term interest rates and whether we see a slowing in the economy overall.
It is noteworthy, though, that San Antonio actually did slow in job growth and has actually been slowing since our top market of 3.6% in 2014, that is, about 36,000 new jobs back then. But in late 2017 through early 2018 job growth actually dipped below 1% growth, and then accelerated in the latter part of 2018. This is in contrast to the other metro areas of Texas that all saw 2018 job growth exceed 2017’s. Reasons why San Antonio is lagging is open to speculation, however, our pick-up in growth at the end of 2018 is a good sign, though.
Nationally, the indicators show that the U.S. is starting to see slowing growth; not a downturn, and certainly not a recession, but just growing at a somewhat slower rate. In Texas, both the services sector and manufacturing have begun slowing. The fall of oil prices from over $76 per barrel to under $50 has a ripple effect through the entire economy. Considering the torrid pace of 2017 and 2018, that is not bad, but still something of which to be weary. The question is, how do you see your business doing this year? Did you see an up-turn, like San Antonio did at the end of the year, or a slowing down like the U.S. seems to be experiencing?
IRC is seeing a brisk business since the beginning of the year and we hope it keeps up. If we can help you with you commercial real estate needs, please give us a call.