North Texas Economy Shaky Through Q2, Growth to Resume

  • Job growth in the Dallas-Fort Worth metroplex stalled in the second quarter of 2012, but is expected to resume in the second half of this year. Contributing to the soft patch was the now-resolved strike at Lockheed Martin in Fort Worth, which idled 3,600 workers over 10 weeks from late April through June. The strike does highlight the area’s  exposure to the federal budget sequestration that now casts a shadow over federal defense spending for 2013 and beyond.  If current law is not changed there will be about a half a trillion dollars worth of cuts to defense spending coming over the next 10 years. It is estimated that budget cuts of that magnitude would costs approximately two million jobs nationwide. Lockheed Martin is the largest defense contractor for the federal government, with $40 billion worth of contracts in 2011.
  • Energy is still driving the North Texas economy. The NYMEX price for WTI crude has climbed since mid-summer to $90-$95/barrel. Natural gas prices are depressed from a rapidly increasing supply, and are now far below the $12.69/MMBTU (Henry Hub  price) spike of June 2008, down to a low of $1.95 for this past April. Since late April, natural gas prices have increased to near $3.00/MMBTU as of early August. As a result of low natural gas prices there has been a tailing off of exploration activity since late 2011.
  • Fort Worth-based American Airlines may remain under bankruptcy protection through the remainder of this year. The company has until December 28 to file a reorganization plan. In July, American reported its fourth consecutive month of industry-leading revenue metrics.
  • Real estate markets in North Texas continue to improve, driven by strong population growth.  Dallas added 25,413   people between April 2010 and July 2011, behind Houston, San Antonio and Austin in leading southern population gains.

Click here for the complete 2012Q3 North Texas Regional Economic Update: NorthTexas2012Q3.

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