Texas’ economy is in the worst shape it’s been since the official end of the recession, according to a survey of manufacturers released Monday.
The survey from the Federal Reserve Bank of Dallas showed the overall index of business activity slipping to negative 20.1, a low not seen since June 2009, the last month of the nationwide recession.
The report was far worse than private-sector economists expected, and is a sign of ongoing trouble in the state that has led the U.S. recovery from the financial crisis but now faces the fallout from the collapse in oil prices. Texas has been a major contributor to U.S. job recovery since the end of the recession.
One respondent to the survey, a metal manufacturer, said that the “price of oil is really impacting our customer base and, in turn, purchases of our product. It is getting ugly.”
The Dallas Fed’s index of business activity has been negative throughout 2015, reflecting in part the decline in the price of oil over the past year and a half. The price of a barrel of crude oil has fallen from over $110 last summer to under $40 today, leading to massive job losses in U.S. oil production.
In Texas, the unemployment rate has crept up from 4.1 percent in July to 4.6 percent in November. The country as a whole, however, still has a higher jobless rate, at 5 percent.
The survey contained few clues as to how the state might weather 2016 if oil prices remain low. While expectations for the overall Texas economy were down, manufacturers reported increasing production, and adding workers and hours.
“We continue to read about doom and gloom, but the numbers haven’t borne that out,” responded one executive who builds machinery for drillers. “Living in Houston, I continue to see multiple out-of-state license plates on the freeways. People are continuing to pour into Houston; I just don’t know what they’re doing.”
Another respondent said the tax legislation passed this month by Congress, which included tax breaks for business investment, would allow them to keep expanding.
