Everything’s Bigger in Texas, Including the Economy

From big skies to big hair, everything’s bigger in Texas — including the economic recovery.  Texas’ economy has been relatively healthy and has seen a shorter recession compared to the rest of the country.  Some of the major signals of economic health include:
  • Jobs
  • Housing
  • Consumer Confidence
In these three areas, Texas has demonstrated better recovery than the U.S. as a whole.  The national employment rate has picked up – with 244,000 jobs added in April – and Texas is creating jobs at a better rate than the rest of the country.  Texas’ unemployment rate in April 2011 was 8% compared to a national average of 9%, and 73% of jobs lost in Texas during the recession have already been recovered, versus only 13.4% for the country.

Across most of the country, property values are still declining.  However, Texas weathered the national real estate crunch without significant damage to property values.  The foreclosure rate was only one in every 1,106 mortgages, much better compared to other states such as Nevada (one in 97) and California (one in 240).
How are Texan consumers feeling? The Consumer Confidence Index (CCI) increased 10.3% from March to April 2011, and the Consumer Pricing Index (CPI) increased 3.4% from a year ago.  The U.S. CCI increased just 2.5% from March and CPI increased 3.2% from a year ago.

Is the economic downturn completely over in Texas?  Positive signs from Texas-based retailers certainly indicate a rebound. Radio Shack, based in Fort Worth, reported a total revenue increase of 2.1% in the first quarter, with comparable sales only decreasing 0.6%.  In addition, Irving-based Michaels Stores, Inc. reported comparable store sales increase of 4.3%.

Austin-based Whole Foods saw comparable store sales increase 7.8% for the period ended April 2011.  Dallas-based JC Penney reported a comparable store sales increase of 3.8% for the first quarter, with the best performing stores being located in the southwest region of the country (including Texas).  Stage Stores Inc., based in Houston, reported solid sales increases of 1.1%, but President and CEO Andy Hall noted that “rising gas prices made for a more cautious consumer.”

It seems that retailers are faring well in Texas, but still not immune to the effects of the rising gas prices.   As we enter summer, do you think Texas retailers will still have an edge?