For Immediate Release
February 25, 2008
Because of the dynamic nature of the economy and the frequent revisions necessary for economic forecasts, please only reprint this column/graphic within the next two weeks.
Texas is open for business, despite slowdowns
By Susan Combs
Texas Comptroller of Public Accounts
Subprime mortgage woes, up ticks in unemployment rates and rising energy costs: these economic issues have come to dominate the national news of late. Though those concerns have caused some ripples in the Texas economy, the effects have so far been less than those seen in some parts of the country.
Right now, the negative forces in the national economy do not substantially affect Texas. The state’s economy has remained insulated on several fronts, and Texas can still boast about some strong economic indicators. However, if the national economy continues to weaken, pressure on the Texas economy will increase as well.
The Texas unemployment rate was below that of the United States for every month in 2007, according to figures from the Texas Workforce Commission. In December 2007, Texas’ seasonally adjusted unemployment rate stood at 4.5 percent, compared to the U.S. rate of 5 percent.
In dealing with the mortgage credit crunch, Texas has fared better than most other large states, but we are not immune to the problem. Prospective homebuyers in Texas and the nation will have tougher times qualifying for mortgages. But positively, our state does not seem to have been the victim of a housing price bubble.
So far, a diversified Texas economy – including strong high tech and oil industries – has helped to buffer the national downturn. The oil and gas industry in particular has benefited from higher energy prices, and the state has collected increased tax revenues as a result. However, in the longer term any gains would be overtaken by higher feedstock prices for industries that rely on oil and gas products and a general increase in price inflation at the national level.
The state’s largest general revenue source is the sales tax, which has seen double-digit gains in the last two fiscal years. So far this year, sales tax growth has been strong – at close to 7 percent – but not at the red-hot pace of previous years. Despite some slowdowns, Texas’ economic position remains strong. Our state is open for business, and our economic outlook is largely positive.
Despite some slowdowns, Texas’ economic position remains strong. Our state is open for business, and our economic outlook is largely positive.
The news graphic Your state. Your dollars. Your business is available on Window on State Government at http://www.window.state.tx.us/newsinfo/graphics/.