The Texas Employment Outlook is looking good entering the 4th quarter of 2017.
The Dallas Fed’s Manufacturing Texas Employment Outlook Survey showed that factory activity continued to increase in September. Several measures of current manufacturing activity indicated continued growth with increases in the following indices: new orders index, capacity utilization index, shipments index, general business activity index and company outlook index. Twenty-eight percent of firms noted net hiring, suggesting faster employment growth and longer workweeks. The hours worked rose while wages and benefits were virtually unchanged. Perceptions of broader business conditions including future expectations continued to improve in September.
Oil & Gas
According to the latest figures of the Dallas Fed, oil and gas employment in Texas expanded by 1,700 jobs, reaching a total of about 218,500. Permian Basin employment continues to develop and is growing at a 4.4 percent year-to-date annualized rate with both Midland and Odessa adding jobs. The third quarter Energy Survey shows that the index rose while uncertainty about the outlook decreased. The unemployment rate in the Permian Basin remains below the U.S. and Texas Employment rates. September’s rig count was 383—five rigs higher than August.
Growth and revenue in the service sector increased in September, based on the results of the Dallas Fed’s Texas Service Sector Outlook Survey. Labor market indicators reflected slower employment growth and slightly longer workweeks. Price and wage pressures were mostly unchanged with the majority of firms indicating little variation in wages and benefits. Respondents’ expectations regarding future business conditions including company outlook, future revenue, business activity and employment continued to reflect optimism.
Labor shortages are particularly acute in construction, where wages have rapidly increased since 2012. As post-hurricane rebuilding gets underway, labor shortages will further squeeze the Texas construction market and drive up labor and material costs. A recent survey conducted by the Associated General Contractors of America (AGC) found that 70 percent of contractors are having difficulty locating qualified craft workers to fill the growing demand. In the AGC survey, carpenters ranked at the top of the skilled positions that contractors were finding trouble filling. Others included concrete workers, electricians, cement masons, plumbers and general installers.
The fourth quarter always brings a blizzard of seasonal and holiday-related positions, further tightening the Texas labor market. Amazon, the gift-delivery powerhouse, will fill thousands of seasonal warehouse positions throughout the state. UPS and FedEx will also increase the number of package handlers, drivers and helpers to prepare for the deluge of deliveries. Major retailers such as Target and JC Penny are adding holiday workers, although Wal-Mart has announced that they will not be hiring seasonal employees this year. In addition to traditional seasonal work, general contractors and employers such as Lowe’s are recruiting for post-Harvey rebuilding efforts. Houston Public Works and FEMA are also seeking workers to assist with the Harvey recovery and rebuilding effort.