When the Fed released their “Beige Book” this month, they reported that economic growth for the Dallas district was only “moderate” for the six weeks ending July 3. Translated into real numbers, we added only 16,700 jobs in June, after adding 30,900 in May. Our unemployment rate remains at approximately 1% less than the national average.
Jobs in the oil industry declined steeply when the price per barrel dropped from $100 to less than $50. Demand for oil field services flattened when companies made cuts to capital spending and oil and natural gas drilling declined. Smaller energy companies have fared the worst, since they have less leverage to cut costs and less ability to access global capital markets. Forecasters expect to see a surge in merger activity in this sector. However, the layoffs appear to be at an end, since the industry added 2,700 jobs in June.
Although Texas is the nation’s #1 oil producer, the industry accounts for less than 4% of overall employment.
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Other gains were in education, health services, and professional and business services. Increases in jobs in the hospitality industry were fueled by the opening of new restaurants.
The bad news was that manufacturing lost 5,400 jobs – a situation that could be related to the negative impact of the strong U.S. dollar on exports, as well as on lower oil prices.
Retail sales increased in spite of the rain
Retailers reported strong sales for Mother’s Day, followed by a slight slow-down, due in large part to wet weather and a reduction in sales along the Mexico border. The strong U.S. dollar is having a negative impact on both exports and activity near the border.
Lenders see increased activity
Overall loan demand increased over the past six weeks, led by activity in auto and retail sales. At the same time, commercial and industrial loan growth slowed.
Real estate remains a star in the Texas economy
While wet weather delayed new home starts, home sales, and deliveries over the past few months, it didn’t bring these activities to a halt. Home builders expect to see increasing activity and a surge in home starts now that weather has returned to normal. New home starts in the Dallas-Fort Worth area increased more than 25% in the first quarter and sales of new homes were up 9% over the second quarter of 2014.
In North Texas, real estate sales hit a new high in June, with a 12% increase and sales of 10,575 preowned single-family homes. The median sales price also increased, going over $200,000 for the first time. These numbers all signify increasing demand for the low supply of homes for sale.
Residential rental activity is also strong, with demand leading to increases in both occupancy and rental rates.
In the Dallas-Fort Worth area, commercial real estate also shines. Demand for office space is steady, and retail construction reached a 3-year high.
If you’re looking for a new home in Texas…
You’ll increase your chances of success by being pre-approved for a home mortgage loan before you shop – and The Mike Clover Group at Homewood Mortgage will be happy to help.
Give us a call at 800-223-7409 or visit us at http://www.mikeclover.com/.
18170 Dallas Parkway
Dallas, TX 75287