M. Ray Perryman
The Economist: Coming back!!
In early 2020, COVID-19 plunged the economy into freefall, abruptly reversing a historic expansion. Although the sharp declines only persisted for about two months, almost 1.5 million jobs disappeared across Texas. The loss of income and financial security for millions of families and small businesses added to the immeasurable human costs and tragic loss of life associated with the pandemic and measures required to slow its spread.
Some 21 months later, we are finally reaching the point where many geographic areas are back to their pre-pandemic levels of employment. However, the recovery has been uneven (as expected), and some places still have far to go. Let’s look at how Texas and its metropolitan areas are faring based on the most recent (October) estimates.
In February 2020, Texas employment was nearly 13.0 million. By April 2020, it had fallen to 11.5 million. Recovery began fairly quickly, as the economy was relatively healthy going into the pandemic and no major structural problems were prevalent. As businesses reopened through the summer, jobs began to be restored; the state has added jobs in 17 of the past 18 months. The pace has been variable, largely tracking the ebb and flow of the severity of the virus. In October, the seasonally adjusted Texas unemployment rate dropped to 5.4% as the economy added 56,600 jobs. The latest total of 12.9 million is only slightly below the pre-pandemic level.
Several metropolitan areas have exceeded their February 2020 employment. Abilene, Amarillo, Austin-Round Rock-Georgetown, Dallas-Plano-Irving, Killeen-Temple, Lubbock, McAllen-Edinburg-Mission, Sherman-Denison, Tyler, and Waco now enjoy jobs numbers which are at or above those observed before the pandemic. Beaumont-Port Arthur, Brownsville-Harlingen, College Station-Bryan, Corpus Christi, El Paso, Fort Worth-Arlington, Houston-The Woodlands-Sugar Land, Laredo, Longview, Midland, Odessa, San Angelo, San Antonio-New Braunfels, Texarkana, Victoria, and Wichita Falls remain below February 2020.
One common denominator among most of the places slower to recover is the greater importance of oil and gas activity (upstream and downstream). In fact, some of the most energy dependent markets are further below prior peaks than the worst days of the pandemic for the state as a whole. This pattern will be reversed in the coming years. Tourism destinations are also suffering disproportionately. Conversely, improvement has occurred more rapidly where economies are either particularly diverse or closely tied to industries (such as technology-oriented sectors, logistics, and professional services) amenable to remote work or subject to less harm (or even benefitted from the calamity).
Things are clearly moving in the right direction, with many parts of Texas topping pre-COVID-19 employment levels. While the growth we should have seen during this period has largely been foregone or at least deferred, we are now proceeding along an upward trajectory. Stay safe!!
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 2,500 clients over the past four decades.