MCALLEN, Texas – Of the seven major metropolitan regions in Texas, the McAllen-Edinburg-Mission MSA will suffer the least number job losses from the current economic downturn.
This is the view of The Perryman Group, a leading economic forecasting group based in Waco, Texas.
The group has just released a new study titled: The Economic Outlook for Texas’ Major Metro Areas: Projected Recession and Recovery from COVID-19, April 2020.
The study looks in depth at the seven largest metropolitan areas in Texas.
The loss of wage and salary employment in the McAllen-Edinburg-Mission MSA will be 12,976 in 2020, a drop of 4.54 percent. A recovery will takes place in 2021, with gains in wage and salary employment of 12,187, or 4.47 percent, the Perryman Group states.
In comparison, the Austin-Round Rock-Georgetown MSA will suffer a loss in wage and salary employment in 2020 of 5.83 percent. The region will recover by 5.35 percent in 2021.
For Dallas-Plano-Irving MD, the drop in wage and salary employment in 2020 will be 5.87 percent. The region will recover by 5.51 percent in 2021.
For El Paso MSA, the drop in wage and salary employment in 2020 will be 5.37 percent. The region will recover by 4.69 percent in 2021.
For Fort Worth-Arlington-Grapevine MD, the drop in wage and salary employment in 2020 will be 7.03 percent. The region will recover by 5.85 percent in 2021.
For Houston-The Woodlands-Sugar Land MSA, the drop in wage and salary employment in 2020 will be 6.96 percent. The region will recover by 5.85 percent in 2021.
For San Antonio-New Braunfels MSA, the drop in wage and salary employment in 2020 will be 6.11 percent. The region will recover by 5.33 percent in 2021.
The biggest job losses in the McAllen-Edinburg-Mission MSA in 2020 will occur in the accommodation and food services sector – 5,233. This equates to 21.9 percent.
The retail sector will also see a loss in jobs – 4,369. That equates to a drop of 11.75 percent. There will also be 1,022 job losses in the manufacturing sector, a drop of 11.75 percent.
However, the McAllen-Edinburg-Mission MSA will see gains in the healthcare and social assistance sector in 2020, with 2,464 new jobs created. That equates to a 3.33 percent increase.
In his executive summary of the study, economist Ray Perryman said:
“Massive layoffs and talk of double-digit unemployment have led to ubiquitous comparisons to the Great Depression. These assertions are simply wrong. Prior to the Great Depression, there were massive structural problems in the economy, and policy responses were less well understood. The current situation emanates from a horrific pandemic, but the economic structure was basically sound as we entered this situation.”
Perryman noted that aggressive actions are being taken by the Federal Reserve, the federal government, and states and local areas across the country to help mitigate the economic damage.
“Assuming the underlying structure remains essentially in place, the downturn, while sharp and painful, will likely be more of a pause than a fundamental change,” Perryman said.
“There will certainly be permanent changes in many aspects of the economy, some of them major, but the overall size and scope of activity should return to essentially its prior path in the coming years.”
With regard to Texas, Perryman notes that the negative effects of COVID-19 have been compounded by turmoil in energy markets. He said a price war between Saudi Arabia and Russia causing an increase in supply even as demand dwindled with COVID-19 disruptions.
“Although recent agreements have reduced global oil production, the market remains oversupplied and prices have fallen dramatically,” Perryman writes.
The Perryman Group’s forecast for Texas indicates losses this year of a projected 861,000 jobs (a 6.48 percent decrease) and $133.8 billion in output (down 7.6 percent).
For 2021, the state is forecast to add almost 685,000 jobs for a 5.51 percent gain, with an increase in output of $154.4 billion (9.5 percent growth).
With regard to Texas’ largest metropolitan areas, Perryman predicts t the economic fallout will be significant for each, with the degree of decline and speed of recovery influenced by the differing concentrations of industries across population centers.
“Higher concentrations within the energy sector, for example, will contribute to larger jobs and output losses this year and a somewhat different recovery pattern,” he notes.
In conclusion, Perryman states: “Although several years will be required for recovery, The Perryman Group’s long-term outlook remains positive for Texas and its major urban centers. As noted, the economy was sound going into the COVID-19 pandemic and should be able to emerge and recover in a reasonable period of time.”
Editor’s Note: Click HERE to read the Perryman Group study, The Economic Outlook for Texas’ Major Metro Areas: Projected Recession and Recovery from COVID-19, April 2020.
Editor’s Note: To contact reporter Steve Taylor, email: [email protected]
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