It's not the best of times, nor is it the worst of times. Three words sum up the economic forecast for Texas, business economist Laila Assanie told UT-Tyler's 2015 Economic Summit: modest growth ahead.
"Texas will continue to outperform the U.S. [overall] in the long term," predicted Ms. Assanie, who works for the Federal Reserve Bank of Dallas. "Texas has a larger share of the fast growth sectors of energy, construction and exports."
The Great Recession didn't hit Texas quite as hard as the rest of the nation.
"And Texas bounced back much faster," said Ms. Assanie, a graduate of Northwestern University and the London School of Economics. "The U.S. as a whole recovered the jobs lost in the recession in 75 months. Texas recovered those jobs in 39 months."
But low oil prices are keeping the economy from really taking off, she said.
"In 2014, Texas was ranked No. 1 for job growth in the U.S.," Ms. Assanie said. "This year, Texas will fall to No. 28."
The energy sector's pain isn't as bad as it was in the 1980s, but it's palpable, she added. Because oil and gas remain the state's biggest export products, exports are down.
"Low energy prices have hurt us in terms of losing jobs and lower state revenues," she said. "Low gas prices may be good for consumers, but they're bad for the Texas economy."
The state's rig count is down from a peak of 900 during the boom days of 2012 and 2013 to 346 today.
"Outlook is pretty negative through 2016, because they expect gas prices to go lower," she forecast. "They do not expect an energy sector turnaround anytime soon."
"Unemployment is back to 2007 levels," she said. "We are at full employment. We recovered all of our jobs. The nation is close but has not quite caught up."
And she dismissed the notion that the jobs Texas added were low-paying, low-quality jobs.
"That's not true," she said. "The state added the most in high-paying jobs. The oilfield jobs pay well, and manufacturing jobs pay higher. We saw higher growth in the upper- and middle-wage jobs. In fact, 59 percent of the job growth over the last 14 years was in the top two quartiles."
Though job growth has cooled in some sectors, she said Texas remains a great place to find work. Tyler has an unemployment rate of 4.3 percent, which she said during a question-and-answer period is about what economists consider full employment.
"In Tyler, the leisure and hospitality sector leads in job gains in 2015," she said, noting that job grown in that sector reached 11 percent.
Texas largely escaped the big boom-and-bust housing cycle the rest of the nation saw in the past decade. So the housing market here is robust.
"It's a seller's market for homes," she said. "Home sales are back where they were in 2006. The housing market is healthy and doing well overall. Prices are a record high in the state for existing homes. The top markets are Dallas and Austin."
Sellers can get the prices they want and be confident of selling fairly quickly, she said.
A big driver of the residential construction sector in recent months has been multi-family housing, Ms. Assanie said.
"Apartments have led the residential construction recovery," she explained. "There's a very strong apartment market."
That's all reflected in the Tyler and Smith County housing market, which has seen some record highs in home sales in recent months but doesn't see the overheated atmosphere of the Dallas area.
"Home sales are rising well above the 2006 peak in Tyler," she said.
This was the fifth annual Economic Forecast Summit sponsored by the UT-Tyler College of Business and Technology and the Hibbs Institute for Business and Economic Research.