TX 2020 Economy Forecast Good Despite O&G Decline

Feb 5, 2020

Credit Courtesy: Chuck Smith / Red River Radio News

GOOD BUT COULD BE BETTER - According to an economist with the Dallas Fed, the Texas economy will continue to expand this year but the oil and gas energy sector is expected to keep it from being even better. Speaking in San Antonio at an event by the Federal Reserve Bank of Dallas, economist Keith Phillips said he expects the Texas economy to be even stronger than the nation’s.  That’s despite job losses in the oil and gas industry. 

“Overall, I expect the energy sector to be a slightly negative drag on the state," Phillips said. "But generally mostly neutral in terms of growth from last year to growth this year."

Phillips  says due to historically low unemployment -- there isn’t much room for job growth,  and it will likely stay about the same as last year.   He added  some  risks to the forecast are: -- a sharp decline in oil prices, an escalation of the trade war,  and a national recession.

“Texas is more dependent on the national economy than it is on oil prices," explained Phillips."But when oil prices swing it affects our relative performance to the U.S. economy.”                                           

Credit Courtesy: Business Insider / Market Insider

Phillips  did  point out that most economic forecasters don’t expect a recession to occur this year but that  low energy prices will have some influence on Texas and oil and gas producing regions.   And a quick look at oil prices –The closing price for a barrel of  West Texas Intermediate  Crude Oil was just over $50 a barrel,at the market close yesterday – that’s up almost 3% from Monday but  way down from $63 a barrel a month ago.