While the Houston metro area economy has seen four months of net job losses so far this year, the Dallas/Fort Worth metro area economy has seen just two months of job losses. Job growth has clearly downshifted in North Texas, from the heady 10,800 job per month average of 2014, to 6,800 net new jobs per month through September of this year. Energy prices matter for the North Texas economy, but its economic diversity is paying dividends now. Looking ahead, we expect North Texas to dodge a regional recession even though job growth will cool down in 2016.
Oil prices are weak, finishing the year by testing the late-August sub-40 lows. Perversely, the Paris terrorist attacks may have provided some support for global oil prices, but downside momentum may continue as inventories of both crude and refined products increase. Natural gas prices also remain exceptionally weak at $2.50 per mmbtu. In just one example of the energy drag to North Texas, Occidental Petroleum recently announced a consolidation of its Dallas operations and plans to relocate up to 100 employees to its new Houston headquarters.
Non-energy corporate activity in North Texas remains very positive. Defense giant Lockheed Martin landed a $1 billion contract to build 17 new C-130J transport aircraft for the U.S military. Lockheed also just closed its $9 billion acquisition of military helicopter builder Sikorsky. Corporate relocations to North Texas are expected to continue at pace through 2016. Approximately 9,000 California companies moved out of state over the past seven years, many to North Texas. The Dallas Regional Chamber expects that trend to continue. Commercial development on the north side of the metro area remains very active, pushing toward Oklahoma. The $1 billion Gates of Prosper project has begun utility and roadway construction.
Click here for the complete North Texas Regional Economic Update: NorthTexas 2015Q4.