wo central factors come to mind in connection with the Dallas area economy: the region’s proven ability to attract major corporate relocations, chiefly to major business parks in its northern suburbs, an effect in part of affordability for business—and its connections with the oil and gas sector (Dallas is a charter member of the Oil Patch). Great recent strength in the former, however, has been so strong that the troubles in the latter, in the form of low oil prices (a much bigger bugaboo for Houston), have had little impact on the local economy, which continues to thrive. Indeed, “even the beleaguered energy industry is improving,” prominent Texas economist Ray Perryman informed Dallas Business Journal in July. According to a Federal Reserve Bank of Dallas survey released in June as cited by the Journal, “Oil and gas companies saw activity pick up sharply in the second quarter after contracting earlier this year…Energy executives from Texas, southern New Mexico, and northern Louisiana indicated their businesses even showed signs of expanding.”
A recent flood of corporate relocation announcements to the new and massive, $3.2 billion, 225-acre Legacy West mixed-use development and business park in west Plano, meanwhile, is bringing Toyota’s new North American headquarters, a regional hub for Liberty Mutual, a major office facility for FedEx, and a corporate campus for JPMorgan Chase. As reported by Dallas Business Journal, Legacy West eventually will host more than 20,000 employees (including 15,000 in the relative near term). In nearby Richardson, furthermore, thousands of employees will inhabit State Farm Insurance Company’s massive new campus in the huge mixed-use CityLine development.
Job growth, despite recent energy sector weakness, has remained robust overall. According to U.S. Bureau of Labor Statistics (BLS) preliminary data, total non-farm employment in metro Dallas as of June was up fully 99,600 jobs (4.1%) from 12 months prior and was up 205,800 jobs (8.7%) over 24 months—high rates of job creation by any standard. Population growth has been strong as well. According to Moody’s Economy.com, metro Dallas population grew by fully some 97,200 residents (2.1%) in 2015. A larger numerical increase is anticipated for 2016. “Once crude oil prices recover, which Perryman sees as inevitable due to anticipated global demand, drilling in Texas will increase and spur longer-term growth.” “A big reason for the state’s continued success is its increasingly diverse economy,” as stated by a recent Perryman report. The strongest
job growth over the latest June-to-June time span is indicated by BLS data for the Trade, Transportation, and Utilities sector, metro Dallas’ largest, which added 27,800 jobs net over the period for a growth rate of 5.8%. Leisure and Hospitality followed with the net addition of 17,300 jobs for a 7.1% gain, the highest rate of job creation among local industry sectors for the period. The Professional and Business Services segment, nearly as large as Trade, Transportation, and Utilities, added 14,900 jobs net June-to-June—growth at 3.3%—while Education and Health Services grew by 11,600 for a 4.0% increase. Also adding 10,800 jobs net—growth at 3.9%—was the Government sector. All other major industry segments also recorded gains for the period
A note on the data. Unless otherwise stated, BLS data on the Dallas metro area are for the Dallas-Plano-Irving Metropolitan Division, a part of the larger Dallas-Fort Worth Metropolitan Statistical Area (MSA) (the “Metroplex”). The Fort Worth side of the Metroplex, west of metro Dallas, is covered in a separate Reis Observer. To review more market reports or to purchase other markets click here
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September 23, 2016