For immediate release: November 22, 2005
Evolving Texas Economy Focus of New Dallas Fed Publication
DALLAS—Texas’ changing economic landscape following the high-tech boom and bust and the 2001 recession is the focus of a new publication from the Federal Reserve Bank of Dallas.
The Face of Texas: Jobs, People, Business, Change examines how the state’s economy has changed and the issues it now faces.
“The state has gone through boom and bust cycles before, but each downturn has been followed by a stronger and more diverse economy,” writes senior economist and vice president Mine Yücel.
The Face of Texas examines the high-tech bust and subsequent jobless recovery, the importance of industry agglomeration, per capita income growth, retail sales in border cities, the maquiladora industry, the effect of energy prices on the Texas economy and Texas’ changing demographics.
An article on the recent jobless recovery in Texas breaks down employment changes into temporary (cyclical) and longer-term (structural) adjustments and finds that structural adjustment dominated cyclical change in the last business cycle.
Research in The Face of Texas demonstrates that Texas economic expansion exceeded national growth in 1969-2001. Much of this is attributed to income growth in the Texas Triangle cities of Houston, Dallas/Fort Worth, Austin and San Antonio.
Outside the triangle cities, income growth has been measured. This is especially true in border cities, where income growth has not matched population growth.
The importance of border cities is evident in retail sales. In 2001, as much as $2 billion was spent by Mexicans shopping at Texas border retail shops. On average, sales to Mexican nationals at border retailers have represented 11 to 51 percent of local retail sales. This relationship makes the business cycle in most border towns sensitive to swings in the value of the peso.
In conjunction with expanding population along the border, the demographics of Texas are changing and by 2020 Hispanics are expected to make up the majority of the state's population. The authors show that disparities in education and income exist between ethnic groups. These inequalities provide opportunities and challenges for the state in coming decades.
Find The Face of Texas: Jobs, People, Business, Change online at www.dallasfed.org.
Phone: (214) 922-5307