Texas economy recovering after Hurricane Harvey
Dec. 3, 2017 at 9:17 p.m.
Updated Dec. 4, 2017 at 6 a.m.
Jade & Madalynn Bridal Boutique was closed for about two months and had to change locations after Hurricane Harvey struck.
Many businesses closed for weeks or months after Harvey. Some remain closed.
Despite the closures, part-owner Erika Olguin said the local economy appears to be doing OK. Since her boutique reopened, store traffic has been strong.
"I thought there was probably going to be people not wanting to spend money," she said. "People are still having quinceaneras and weddings and all of their special events."
The Texas economy appears to be shrugging off the negative effects of Hurricane Harvey, said assistant economist Amy Jordan with the Federal Reserve Bank of Dallas.
The state lost about 1,400 jobs in September, Jordan said, which was less than predicted.
Slower growth, combined with hurricane-related job losses in September, pulled third-quarter employment gains down to 0.7 percent, she said. The state's leisure and hospitality sector was hit hardest, with restaurants accounting for the bulk of job losses.
The bank's survey data showed Harvey didn't have a large enough impact to derail continued business growth, Jordan said. Despite the hurricane's impact, year-to-date statewide job growth stands at an annualized 2.7 percent, well ahead of the state's 1.2 percent growth in 2016. Other indicators also point toward rapid recovery from the storm.
"At state manufacturing activity - it's been climbing," she said. "It's in line of national trends of manufacturing growth. Our Dallas Fed Texas manufacturing outlook survey - the production index from that survey rose in October to its highest reading since before the oil bust."
In November, manufacturing activity slowed but remains solid, according to a news release.
The bank's Texas service sector outlook survey showed the industry's revenue increased in October and November. The service sector's revenue hit its highest reading in November since 2014, according to a news release.
"Part of what might be driving the strength in retail is increased auto sales in the Gulf Coast region," she said. "That's as residents purchase vehicles because theirs were damaged by Hurricane Harvey."
Comments from service sectors show activity returned to pre-hurricane estimates by October even though many said they had been negatively impacted in September, Jordan said.
Jordan expects job growth to return to trend by the end of the year for the Gulf Coast region, which is good news. Contributing to this is the growth in goods producing sectors such as energy and manufacturing.
Although the economy appears to be recovering quickly, headwinds still remain, Jordan said. The labor market has grown significantly tighter this year.
The unemployment rate has lowered for Victoria County to 4.9 percent in September from its peak of 6 percent in February, Jordan said. Fewer people are looking for work and fewer people are available for job openings.
"We're hearing about shortages of workers across a broad range of industries," she said. "That could actually hamper or slow recovery efforts."
Texas is the No. 1 exporting state for trade in the U.S., Jordan said, and is highly dependent on Mexico, which is the state's top trading partner.
"Uncertainty with the ongoing trade negotiation with Mexico is another headwind," she said.
Local businesses reopening after Harvey - such as Olguin's - have helped the state's economy, Jordan said.
During Harvey, the ceiling collapsed in the back Olguin's boutique on East Rio Grande Street, allowing water to destroy the fax, credit card, copy and sewing machines as well as its landline phones.
"I was crying because we worked so hard to build this store," she said. "It was all taken away in one night."
The morning after the hurricane, Olguin and her family and friends saved most of the store's inventory.
They moved the store to 1401 E. Airline Road in the Town and Country Shopping Center.