Job growth in the Dallas-Fort Worth metroplex accelerated in early 2012, bringing the area’s unemployment rate down to 6.9 percent in February. This is the area’s lowest unemployment rate since January 2009, and still well below the U.S. rate of 8.3 percent for February. The area’s vibrant mix of high-tech and energy-related firms are expected to continue to drive growth through 2012. 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 the area is the bankruptcy of 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, where American Airlines currently employs about 20,000 workers. Plano-based JC Penney recently announced 600 jobs will be cut from its corporate headquarters staff. On the upside, a rebound in U.S. auto sales is fueling another expansion at General Motors’ Arlington Assembly Plant.
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 which 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 weigh on the regional economy.
Real estate markets in North Texas improved in early 2012. Tight new home inventories are keeping home builders engaged. Low vacancy rates are a positive for multifamily construction. Energy and high tech industries are driving demand for office space and industrial space. According to the Case-Shiller Home Price Index, as of January home prices in Dallas were down 1.2 percent over the past year, compared to the 3.8 percent national decline.
Click here for the complete North Texas MSA Regional Economic Update for 2012Q2: NorthTexas2012Q2.