The “Texas Miracle” and the Office Market

by CoyDavidson on August 18, 2011

texas flag office

Texas Governor Rick Perry’s recent announcement to enter the presidential race is bringing a microscope to the Texas jobs story. You can bet the farm that Governor Perry will be touting his record of job creation during his tenure as the state’s top elected official.

The chart below represents nonagricultural employment growth by Federal Reserve Districts over the past 21½ years, using the employment levels of 1990 as a base of 100 and tracing job creation through June. The Dallas District is comprised of all of Texas and parts of southern New Mexico and Easter Louisiania, but Texas accounts for 95% of the District.

As the political rhetoric heats up there will be increasing scrutiny placed upon the Texas jobs story. There are several ways to formulate Texas’ contribution to national job creation from June 2009 through the end of June 2011 and spin the job numbers. One is to look at the number of jobs created by all 50 states, including those that have lost jobs since the nation’s anemic recovery began. Using this metric, through June of this year Texas has accounted for 49.9 percent of net new jobs created in the United States.

Good News for the Texas Office Market

All politics aside, the good news for the Texas office market is that much of the employment growth since the recession ended has been in office using employment. The most jobs have been created in the educational and health services sector, which accounts for 13.5 percent of Texas’ employment. The second-most jobs have been created in the professional and business services sector, which accounts for 12.5 percent of the Texas workforce. The elevated price of energy particularly oil is most commonly attributed to the strength of the Texas job numbers but the mining sector, which includes support activities for both mining and oil and gas, employs 2.1 percent of Texas’ workers. The most disappointing figure is the net loss of jobs in the information technology sector since the recession ended.

No matter your political leanings the good news for office building owners with assets in Texas is that this state is adding jobs faster than any state, and much of it is office using employment. The Bureau of Labor statistics will released the State and Regional Employment Report for July tomorrow, stay tuned!

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