After nearly stalling in the second half of 2011, job growth in the Dallas-Fort Worth metroplex is expected to re-engage in 2012. Currently at 8.1 percent, the area’s unemployment rate remains well below the national average, and is expected to continue to fall through 2012, down to 7.2 percent by year-end. The area’s vibrant mix of high-tech and energy-related firms are expected to lead growth. North Texas’ young demographic profile combined with above average per capita income and a high concentration of corporate headquarters is a potent combination. One potential drag to area labor markets is the bankruptcy filing last November of major employer American Airlines. If the bankruptcy filing results in a consolidation of the troubled airline into another major carrier, that could result in a significant loss of jobs for North Texas. American Airlines currently employs about 20,000 workers in North Texas.
Caps and cuts in federal spending will begin to exert a drag on the U.S. economy by 2013. Cuts in federal defense spending are expected and could impact North Texas defense contractors Lockheed Martin, Textron and Raytheon. State-wide, Texas trails the national average in federal spending per capita and that broadly sets the stage for a less than average drag from constrained federal spending in the years ahead. However, cuts to specific programs, such as the F-35 Joint Strike Fighter, could drag on the regional economy.
House prices in North Texas did not experience the destabilizing price appreciation of other areas in the mid-2000s. Consequently prices have been firmer on the downside. Since peaking in 2007Q1 the FHFA house price index for the U.S. is down about 16 percent. From its later peak in 2009Q1, the Dallas/Ft. Worth FHFA house prince index is down about three percent. Housing starts, particularly on multifamily projects have been on the upswing through 2011. Declining vacancy rates and improving rents are incentivizing multifamily builders.
Click here for the complete North Texas Regional Economic Update, including a forecast table and charts of regional economic activity: NorthTexas2012Q1.