Although the Federal Government’s actions don’t exactly inspire confidence across the nation, consumer confidence within Texas is certainly rising according to Dr. Harold Hunt, one of the nation’s foremost research economists who works in the Real Estate Center of Texas A&M. He recently presented an overview of the existing economic situation for decision makers in the real estate industry and came to the conclusion that things were looking up. Below, we look at the economic areas explored by Hunt and explain why the general outlook is positive.
One of the major questions is whether or not Obamacare uncertainty is holding the economy back. Major health care providers have said that customer premiums could increase by over 100% in some cases. However, Hunt maintained that small businesses should hire new employees and expand in the next few months. While some companies are cutting worker’s hours due to issues over health care, over 30% of companies surveyed within Texas said that they would be hiring more staff within the next 6 months.
There has been something of a stall in the field of oil and gas employment across the United States so is this an issue that could negatively affect Texas and Houston in particular? According to Hunt, the US Government is causing issues through its regulatory and tax laws, which are holding back jobs and impacting the manufacturing industry. Nonetheless, closer analysis of Texas Workforce Commission data shows that the Houston Metro area is outperforming the nation as a whole and the state of Texas in almost all major industry categories.
The information gleaned from the Texas Workforce Commission figures shows that Houston had employment growth in all but one major industry area within the last year. The construction sector was the big winner with growth of over 7%, while Leisure & Hospitality (5.7%) and Mining & Logging (5.5%) also benefited from stellar economic growth. The ‘Other Services’ category, which includes repair industries, was the only sector to experience negative growth (-1.5%), but even this is a good sign as it shows that consumers are buying new things rather than repairing old ones.
It seems as if the nation can expect the economy to continue its recovery unless there is an unexpected international downturn. Unfortunately, if the Federal Government continues its policy of being inactive, a more robust recovery will not be possible. Job growth will be slow in 2014, but there will be new employment opportunities and businesses are still making decisions even without the aid of the government.
As far as Texas and Houston goes, the local and state economy will continue to thrive regardless of the existing economic situation in the country. While oil and gas employment is slowing down, the rest of the industrial sectors are stepping up to the plate and finally it seems likely that all areas of commercial real estate will perform extremely well in 2014. While a buoyant national economy will cause all boats to rise, evidently the Texan economy stays strong even in uncertain conditions.
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