Energy & Environment

Statewide Economy Grows, But Houston’s Growth Is Slower

Job gains haven’t been as strong in Houston compared to other major cities.

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A drilling site near Taft, Texas in 2012.

Economic growth in Houston has been slower than in other parts of the state, across Texas the economic picture is looking better.

The Federal Reserve Bank of Dallas says jobs grew statewide by 4.9% in January, the strongest gain since October of 2014. That growth's been seen across sectors and in all major Texas cities, and it's expected to continue through this year.

But job gains have been weaker in Houston.

"Houston has a deeper connection to the oil and gas industry than most other metros in Texas,” says Economist Jesse Thompson with the Dallas Fed's Houston branch.

Houston has a bigger share of the state's energy jobs than other cities, so it's harder to bounce back from an oil bust. But there's a silver lining: Houston has weathered the storm better than it did in previous downturns.

"You can make a very good argument that this energy downturn was worse than any energy downturn we've experienced in the last 30 years, for the energy industry itself,” Thompson says. “But unlike in the past, it didn't propagate out into Houston the way it has certainly in the 80's or any period since then."

Houston jobs should do better later this year. The Fed says another oil price drop could get in the way of statewide economic gains. Any policy changes that disrupt Texas-Mexico trade – like President Trump's idea of changing NAFTA – could also hurt.

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