By: Dr. M. Ray Perryman
Published in syndication February 06, 2019
As the numbers for 2018 begin to trickle in, it is becoming increasingly obvious that Texas had a banner year in terms of job creation. Overall, the state economy added 391,800 jobs through the 12 months ending in December 2018. That amounts to well over 1,000 jobs each day. The mining and logging sector (which is almost entirely oil and gas in our neck of the woods) grew by 18.0% during the past year, adding 41,300 net jobs. The largest numerical gains were seen in the trade, transportation, and utilities (82,700 jobs) and professional and business services (75,600 jobs) market segments. It is also worthy of note that construction employment in Texas is at an all-time high.
At a local level, the findings are in some ways even more remarkable. The Dallas-Fort Worth-Arlington Metropolitan Statistical Area (MSA) led the nation in nonfarm employment growth with 116,400 new jobs in 2018, well ahead of the much larger New York-Newark-Jersey City MSA, which saw an increase of about 109,000 net positions. Not far behind was the Houston-The Woodlands-Sugar Land MSA, in third place with 108,300 jobs added over the year. That amounts to a staggering 2,000 jobs created each week on average in each of our two largest metropolitan areas. Additionally, the Midland area led the nation with a 6.7% growth rate in employment during 2018, fueled by an epic resurgence in the oil and gas industry that has profound implications for the future.
That is not to say that all is well. Job expansion will likely be strong going forward, but somewhat lower than that in 2018. Expansion in the world economy, which is a major force in the fortunes of Texas ($1 of every $6 of US exports is from the state), is slowing somewhat. Texas faces severe worker shortages in many areas and industries and likely lacks the capacity to consistently create over 1,000 jobs each day going forward. In fact, there has already been some modest slowing of the pace of increase in recent months.
Moreover, while growth brings important benefits and opportunities across a broad spectrum, it also poses notable challenges. A larger workforce adds to training needs, public education requirements, infrastructure development of all types, expanded health care access, and many other phenomena. These are nice problems to have, but they must be dealt with. For now, however, it seems appropriate to take a few moments to bask in the glory of a truly amazing year.