Texas Regional Outlook, 2002: The Coastal Bend Region Page: 3
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announced extensive job layoffs during the year.
Largely because of the weak personal computer
market, the state's semiconductor and electronic
component producers also fared poorly.
Outside of high-tech, the news was not
much happier. Apparel manufacturers, largely
concentrated along the Texas-Mexico border,
continued to be hit hard by international compe-
tition, and they significantly reduced their work
forces in response. Even so, the news could have
been much worse had consumers not remained
willing to spend, often in response to promo-
tional offers. From April 2001 to April 2002,
statewide manufacturing employment declined
by 5.8 percent, or 62,500, which was still rela-
tively better than the 6.6 percent loss in manu-
facturing employment nationwide.
Productivity was hurt temporarily by the
terrorist attacks, partly because of increased
security at airports and border checkpoints. The
increased travel and waiting times and the
unpredictability of delays have hindered trade at
the border and increased transportation costs.
Productivity growth typically slows in a nation-
al recession in any event, because output falls
faster than companies' ability to adjust their
work forces. In 2001, however, strong drivers of
productivity growth have kept the productivity
of American workers rising at a 2 percent annu-
al rate.1 If the recovery follows historical pat-
terns, productivity will shoot up even more with
renewed demand for services and goods.
Over the next two years, the state's manu-
facturing sector should improve as national and
worldwide demand for computers, semiconduc-
tors and other high-tech products rebuilds, and
excess inventories diminish. In 2002, manufac-
turing employment will increase by only 0.6 per-
cent because manufacturers will be hesitant to
hire new employees until they are sure that the
increased demand for their products will last.
But in 2003, the Comptroller's forecast expects
1.8 percent job growth, which would be Texas'
best manufacturing growth for a year since 1998.The Coastal Bend Region
Oil and Gas Counter the Trend
In 2001, the resurgence of the state's long-
suffering oil and gas sector partially, countered
the losses borne by the state's battered manufac-
turers. 'Because of tight worldwide markets,
Texas wellhead oil prices moved above $30 per
barrel in fall 2000, and a cold winter in the
Northeast and Midwest pushed the taxable price
of natural gas to a record $8 per thousand cubic
feet in January 2001. Although oil and gas prices
subsequently declined, they remained relatively
high, spurring statewide and national drilling
activity. By spring 2001, the Texas rotary rig count
surged past 500, its highest level in 15 years.
By summer 2001, however, the slowing
world economy and excess supplies began to
push energy prices downward, slowing drilling
activity in Texas. By November 2001, the
drilling rig count of 407 had fallen to the
November 2000 level; by April 2002, the rig
count of 306 was down 36 percent from its April
2001 level. Nevertheless, because of the lag
between drilling activity and hiring plans, year-
over-year mining employment was up as recent-
ly as March of this year, but by April sector jobs
slipped slightly below the previous year's level.
Over the next two years, the outlook for the
state's oil and gas sector is not favorable. As
worldwide energy prices flatten again over the
next two to three years, Texas mining employ-
ment will fall 5.7 percent in 2002 and another
0.7 percent in 2003.
Construction Points Downward.
From an historical perspective, Texas' con-
struction sector benefited in past years more than
most industries from the national and state eco-
nomic boom. Rapid job and income growth,
combined with the influx of new residents, kept
home sales and new housing construction brisk,
while strong industrial and commercial growth
spurred nonresidential construction activity.
Compared to the gains in 1997 and 1998,
statewide construction growth clearly has been
slowing over the past few years, culminating inTexas Regional Outlook 3
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Texas. Comptroller's Office. Texas Regional Outlook, 2002: The Coastal Bend Region, report, June 2002; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth654571/m1/9/?q=%221997~%22&rotate=270: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.