The Texas economy grew at a blistering pace in the first half of 2018, but hte Federal Reserve Bank of Dallas, in a report out today, cautions that we should not expect that level of growth in the second half of the year, News Radio 1200 WOAI reports.
“After red-hot gains in the first of the year, the Texas economy will likely cool in the second half due to a historically tight labor market and a slowing in export growth," Dallas Fed Chief Economist Laila Assante said in her regular update on the state's economy.
She says Texas added new jobs at a 3.6% rate in the first six months of 2018, leading the nation in percentage increase in jobs, up from 9th place in 2017.
She credits the strong growth of the oil and gas industry, which feeds into sectors ranging from retail to manufacturing.
Another cause for the state's strong economic growth is the rebuilding of Houston following Hurricane Harvey, Assante said. The metropolitan Houston area accounts for 25% of all of the jobs in the state. But she says Harvey-induces activity will dissipate in the second half of the year.
She says other factors weighing on the state's economy in the second half of 2018 is the fact that the state is actually above 'full employment,' with more jobs available than people to fill them.
That will lead to a slowing in growth simply because there are not enough workers needed to fuel that growth.
She says there are some potential challenges internationally, with the future of NAFTA still uncertain, and concerns about increased tariffs levied by the Trump Administration.
Texas is the number one exporting state in the country by far, exporting everything from high tech supplies to manufactured products to oil and refined fuels.
But Assante says the back half of 2018 should not see an economic contraction
."Despite the cooling, Texas will still see solid and above-trend job growth in the second half,” she said.