SAN ANTONIO - Business leaders on Tuesday heard from a top local economist who shared the advantages and risks the economy faces in 2018.
Texas was among the top five states in the nation for job growth last year, and the economy remained strong.
Senior economist Keith Phillips said 2017 laid a solid foundation for 2018 to build from on the national level.
“Manufacturing improved. It finished the year at a very strong pace of growth,” he said.
Retail stores faced a challenge as more people shopped online. Still, Phillips said, consumer spending was healthy.
In Texas, oil and gas rebounded from the slumps of 2015 and 2016, and the unemployment rate in Texas was at 3.8 percent in November 2017.
“This is the lowest unemployment rate we have ever had since the mid-‘70s,” Phillips said.
Phillips said he expects job growth in Texas to hover around 3 percent this year.
“I think one of the reasons we won’t see job growth above 3 percent in Texas will be a scarcity of labor,” he said.
One potential risk to the Texas economy is the renegotiation of the North American Free Trade Agreement, as ordered by President Donald Trump.
“It’s particularly important that trade partners continue, that we keep up a healthy pattern of trade with our neighbors to the south, Mexico,” Phillips said.
Trade with Mexico makes up 40 percent of Texas’ exports.
Hurricane Harvey’s aftermath will also be felt in 2018.
“The good news was that, based on past weather experiences, that jobs bounce back after weather experiences and they have bounced back along the Gulf Coast,” Phillips said.
Phillips said the Alamo City saw a plus from Hurricane Harvey. Leisure and hospitality in the aftermath of the storm grew at its fastest pace since 1990.
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