San Antonio, the staging point for the Eagle Ford Shale development, comprises about 8.0 percent of the total nonfarm payroll jobs in the entire state of Texas. In the first quarter of 2014, San Antonio added a net of 4,400 nonfarm payroll jobs, about 1,700 fewer than last year’s first quarter. Most of the jobs created in the beginning of the year came from the service-producing sector (3,500) followed by construction (410) and manufacturing (300). Although the job growth looks a bit softer compared to the same period last year, the region is doing reasonably well compared to the previous quarter in which San Antonio added 3,300 jobs. On a year-over-year basis the region’s payrolls grew around 2.5 percent in the first quarter of 2014. This was above the long-term annual job growth of 2.2 percent seen since the 1990s.
San Antonio’s unemployment rate declined to 5.3 percent in 2014Q1 from 5.7 percent of the previous quarter. The decline in the unemployment rate came with an increase in both employment and labor force, a positive signal for the economy. We expect the unemployment rate to decline continuously through 2014 due to a modest improvement in payroll jobs. San Antonio saw a decline in both single- and multifamily housing starts in the first quarter of 2014 after a strong surge in the previous quarter. We expect the total housing starts to rebound in the next quarter and grow moderately through 2014. House prices are expected to grow moderately, at par or slightly above the national average in 2014.
Because of the advancement in oil and gas drilling technologies such as hydraulic fracturing and horizontal drilling, both the rig count and productivity of oil drilling has increased substantially nationwide and in the area. However, the natural gas rig count continues to moderate. We expect San Antonio to add more jobs in construction, manufacturing, health care, tourism, and other service-producing sectors in 2014 than in petroleum production, as most of the jobs in the energy sector have already been added to the economy.
Click here for the complete San Antonio MSA Regional Economic Update: SanAntonio 2014Q1.