The Texas Economy

Jesse Thompson
Regional Business Economist
The Federal Reserve Bank of Dallas, Houston Branch
October 2...
Austin
San Antonio

Houston
Oil & Gas Extraction
U.S. Oil Production Growth
After 30 years of decline,
tight oil drives production growth

Jan 1981=100
130

New Mexico
U.S...
02/04/13

12/04/12

10/04/12

08/04/12

0
06/04/12

100

04/04/12

300

02/04/12

300

12/04/11

100

10/04/11

60

Direct...
Total Wages In Texas Shale*
Percent
15

Permian Basin Wage
Growth*
Employment

Percent
15

Barnet Wage Growth

10

Wages

...
Outlook
Refining & Petrochemicals
Refining
Values
60
50

Gulf Coast Downstream Margins
Ethylene cash margins*
Pace refining margins: Gulf Coast**

40
30
20
...
International Trade
International Trade
International Trade
Real exports and Imports
Percent
60
40
20
0
-20
-40
-60
Aug-2009

Exports
Imports
Aug-2010

NOTE: Thre...
International Trade
U.S. Shale pushes out lighter foreign oils.

Thousands of barrels
250,000

Heavier Oils*

Lighter Oils...
Labor Market Conditions
Texas employment growth volatile in 2013
Texas employment growth volatile in 2013
Texas employment growth volatile in 2013
Labor Market Conditions
Real Estate
Real Estate
Real Estate
Real Estate
Outlook
Outlook
Outlook
Outlook
The Texas Economy

Jesse Thompson
Regional Business Economist
The Federal Reserve Bank of Dallas, Houston Branch
October 2...
The Texas Economy
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The Texas Economy

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The Texas Economy

  1. 1. The Texas Economy Jesse Thompson Regional Business Economist The Federal Reserve Bank of Dallas, Houston Branch October 2013
  2. 2. Austin San Antonio Houston
  3. 3. Oil & Gas Extraction
  4. 4. U.S. Oil Production Growth After 30 years of decline, tight oil drives production growth Jan 1981=100 130 New Mexico U.S. Texas 120 110 100 90 80 70 60 50 40 30 Jan-1981 Aug-1985 SOURCE: Energy Information Agency. Mar-1990 Oct-1994 May-1999 Dec-2003 Jul-2008
  5. 5. 02/04/13 12/04/12 10/04/12 08/04/12 0 06/04/12 100 04/04/12 300 02/04/12 300 12/04/11 100 10/04/11 60 Directional 08/04/11 80 Horizontal 06/04/11 500 Vertical 04/04/11 Permian 02/04/11 02/04/13 12/04/12 10/04/12 08/04/12 06/04/12 04/04/12 02/04/12 12/04/11 10/04/11 08/04/11 06/04/11 600 04/04/11 02/04/11 Texas Basin Drilling on Different Trends Barnett 40 20 400 0 Eagle Ford 250 200 200 150 100 50 0
  6. 6. Total Wages In Texas Shale* Percent 15 Permian Basin Wage Growth* Employment Percent 15 Barnet Wage Growth 10 Wages 5 0 10 -5 -10 5 Eagle Ford 15 10 0 5 -5 -10 2006 0 -5 2006 2007 2008 2009 2010 2011 2012 2007 2008 2009 2013 *Growth rates are year-to-year. Adjusted using U.S. Personal Consumption Expenditures. SOURCE: Quarterly Census of Wages and Employment; Bureau of Labor Statistics 2010 2011 2012 2013
  7. 7. Outlook
  8. 8. Refining & Petrochemicals
  9. 9. Refining Values 60 50 Gulf Coast Downstream Margins Ethylene cash margins* Pace refining margins: Gulf Coast** 40 30 20 10 0 Aug-2009 *Based on ethane feedstock (cents/lbs). **Based on West Texas Sour - RFG ($/barrel). SOURCE: Oil and Gas Journal. Aug-2010 Aug-2011 Aug-2012 Aug-2013
  10. 10. International Trade
  11. 11. International Trade
  12. 12. International Trade Real exports and Imports Percent 60 40 20 0 -20 -40 -60 Aug-2009 Exports Imports Aug-2010 NOTE: Three-month year-to-year growth. Adjusted using Houston Consumer Price index Aug-2011 Aug-2012 Aug-201
  13. 13. International Trade U.S. Shale pushes out lighter foreign oils. Thousands of barrels 250,000 Heavier Oils* Lighter Oils** 200,000 150,000 100,000 50,000 Jan-2013 Jul-2012 Jan-2012 Jul-2011 Jan-2011 Jul-2010 Jan-2010 Jul-2009 Jan-2009 Jul-2008 Jan-2008 Jul-2007 Jan-2007 Jul-2006 Jan-2006 Jul-2005 Jan-2005 Jul-2004 Jan-2004 Jul-2003 *Oils with API of 25 degrees or less. **Oils with API of more than 25 degrees. Jan-2003 Jul-2002 Jan-2002 Jul-2001 Jan-2001 Jul-2000 Jan-2000 0
  14. 14. Labor Market Conditions
  15. 15. Texas employment growth volatile in 2013
  16. 16. Texas employment growth volatile in 2013
  17. 17. Texas employment growth volatile in 2013
  18. 18. Labor Market Conditions
  19. 19. Real Estate
  20. 20. Real Estate
  21. 21. Real Estate
  22. 22. Real Estate
  23. 23. Outlook
  24. 24. Outlook
  25. 25. Outlook
  26. 26. Outlook
  27. 27. The Texas Economy Jesse Thompson Regional Business Economist The Federal Reserve Bank of Dallas, Houston Branch October 2013

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