E C O N O M I C
O V E R V I E W
The Texas Economy: Back in the Saddle
by M. RAY PERRYMAN
I
n spite of some major challenges over the past year, the Texas economy is beginning to get back on track. Recovery from the pandemic, a severe hurricane season, and the historic winter storm event of February 2021 is ongoing, and the economy’s resilience has been clearly demonstrated. Moreover, the state is well positioned for strong long-term growth. Like all parts of the nation and, in fact, the globe, the Texas economy was hit hard by the COVID-19 pandemic. From an economic perspective, the pandemic has caused substantial and, in many cases, catastrophic losses. Millions of individuals in the state have faced unemployment or reduced hours. Between February and April 2020, the total number of people working in Texas dropped by nearly 1.5 million (more than 10%).
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TEXAS ECONOMIC DEVELOPMENT GUIDE
Initial unemployment claims went from averaging about 13,500 per week to closer to 300,000, topping out at more than 315,000 in early April. Businesses dealt with closures, capacity limits, and additional expenses for cleaning or necessary modifications to enable safe operations. Supply chains were disrupted, causing yet more losses. Of particular note to the Texas economy, the combination of an increase in oil supply and the pandemicrelated sharp decline in demand caused prices to plunge, and drilling and other activity dropped along with it. While it will take time to regain all of the lost ground, the recovery is well underway. About 878,500 Texas jobs had been regained as of February 2021 (the most recent data available as I write this), despite a temporary
