Texas Economic Indicators

Growth in the Texas economy appears to be slowing. The November Texas Business Outlook Surveys indicated slight increase in employment and mixed output growth. Initial unemployment claims were largely stable mid-November. The November Banking Conditions Survey reflected contracting loan volumes.

Texas Business Outlook Surveys

Survey data suggest sluggish employment growth

The November Texas Business Outlook Surveys indicated a slight increase in service sector employment but flat headcounts in manufacturing (Chart 1). The Texas Manufacturing Outlook Survey employment index ticked down to 1.2 from 2.0, whereas the Texas Service Sector Outlook Survey index rose to 3.1.

Output growth mixed

The Texas Business Outlook Surveys indicated a sharp rise in manufacturing production but a contraction in service sector revenue (Chart 2). The Texas Manufacturing Outlook Survey headline index soared 15 points to 20.5, while the Texas Service Sector Outlook Survey index ticked up to -2.5 from -6.4, suggesting a slower pace of contraction.

Initial unemployment insurance claims

Texas weekly initial unemployment claims rose in mid-November, whereas the claims nationally ticked down (Chart 3). Texas’ new unemployment insurance filings edged up 1.6 percent to 18,300 in the week ending Nov. 15. U.S. initial claims fell 3.5 percent to 220,000 claims over the same period. The September spike in Texas initial claims was due to a rise in fraudulent claims, according to the Texas Workforce Commission.

Construction

Construction contract values rose in October, and the five-month moving average climbed 9.4 percent to $16.6 billion (Chart 4). The rise was concentrated in nonbuilding contract values, which increased 46.8 percent to $6.5 billion on a smoothed basis in October. The five-month moving average of nonresidential building construction decreased 7.0 percent to $6.7 billion, and residential building construction ticked down 3.7 percent to $3.5 billion.

Banking Conditions Survey

The Dallas Fed's Banking Conditions Survey suggested a broad-based contraction in loan volumes in November. The total loan volume index fell 19 points to -10 (Chart 5). The commercial and industrial loan volume index turned negative, and the consumer loan and residential real estate loan volume indexes remained negative. Only the commercial real estate loan volume index was positive, and it ticked up to 6.1 in November. Survey respondents expect growth in loan demand and business activity but further deterioration in loan performance over the next six months.