Thursday, 18 February 2016
By Boyd Nash-Stacey
The drop in oil prices and a weakened manufacturing sector suggest a high probability (90%) for Texas recession.
In addition, given our expectation for a more languid recovery in oil prices, Texas will likely follow a “U-shaped” recovery path—failing to recover to potential by 2019. How will this impact the state’s economy, unemployment rate, and home prices? Large population outflows and weaker trade links between its major partners should be top-of-mind as Texas lawmakers craft policies for the state.
In December, activity increased in 44 states, with the strongest gains in the West. Across the Sunbelt region, activity decelerated despite pickups in the manufacturing, mining, and retail trade sectors.
While the likelihood of a U.S. recession is the highest it’s been since the 2009 downturn, based on a state-by-state assessment, the overall probability remains low.