The Big Picture
interest rates low. The 30-year conventional mortgage rate had fallen to about 3.4
percent by the end of 2012 before gaining
one percentage point within the following
year.
With the U.S. economy back on course,
the Federal Reserve announced in last
November a cutback on its quantitative
easing stimulus program. In response to
the Fed’s tapering on its bond buying activities, bond yields and thus most market
interest rates are expected to continue to
return to their pre-2008 levels.
Interest Rates
Interest Rates
The current shale oil boom in the Eagle
Ford began in 2008 with the discovery of
Hawkville Field in LaSalle County. Oilfield
employment has become a key source of
job growth in South Texas. The Eagle Ford
has become the leader in oil production
growth among all shale plays in the U.S.
Only three counties (Bee, Live Oak and
McMullen) belong to the Eagle Ford oil
and gas production zone. Yet within five
years of when the first shale oil well on
that play was drilled, oil and gas exploration has already proved to be a game
changer for many communities in the
Coastal Bend.
ment grew at an annualized rate of over 3
percent, more than double the historical
average. At the end of 2013, the local unemployment rate dipped to a five-year low
of 5.5 percent.
Corpus Christi Employment Growth,
Corpus Christi Employment Growth,
Year-Over-Year % Change
Year-Over Year % Change
5.0%
2.5%
0.0%
2008
7
2009
2010
2011
2012
2013
SOURCE: Texas Workforce Commission.
6
5
30-Year
Mortgage
4
3
10-Year Treasury
2
1
3-Month T-Bill
0
2008
2009
2010
2011
2012
2013
SOURCE: Federal Reserve System.
What Happens in South Texas
Stays in South Texas
While the national economy is gaining
momentum at last, Texas is among those
states that are leading the nation in job
creation. With half of the nation’s rapidly
expanding oil production, the state
experienced a strong overall economic
growth rate of 4.8 percent in 2012 and 3.6
percent in the following year. The Corpus
Christi metro area has witnessed even
stronger growth in the past two years. The
local economy expanded nearly 7 percent
in 2012, followed by a slightly moderate
pace of 3.8 percent in 2013.
Comparison of Annual GDP Growth
Comparison of Annual GDP Growth
8%
Corpus Christi
Texas
“What Goes Around …
Comes Around”
2%
2.9%
3.3%
Business Cycle Index
110
Texas
105
Corpus Christi
U.S.
90
2008
2009
2010
2011
2012
2013
SOURCES: Federal Reserve Bank of Dallas;
2008
2009
2010
2011
-2%
SOURCE: Bureau of Economic Analysis.
95
2.4%
0.8%
2012
2013
Unemployment Rate
Unemployment Rate
10
U.S.
8
Texas
6
Corpus Christi
4
2
0
2009
2010
2011
2012
2013
SOURCE: Bureau of Labor Statistics.
100
3.8%
Historically, Corpus Christi faced the
challenge of persistently high unemployment relative to the rest of the state and
the U.S. That trend has been reversed ever
since 2008. The local unemployment rate
is now at least one percentage point below the national average. The unemployment rate for the Coastal Bend region as a
whole is even lower, as labor markets are
increasingly tighter for those communities
closer to oilfields in the Eagle Ford.
2008
Business Cycle Index
6.9%
0%
-4%
Reversal of Fortunes
Movement in the regional economy
over time is tied to the changing economic
environment in the rest of the world.
According to the Business Cycle Index,
Corpus Christi followed the state and the
nation during the last economic downturn. As a measure of the overall economic
condition, the Business Cycle Index for
Corpus Christi reflects changes in the level
of employment, the unemployment rate,
wage earnings and retail sales. South Texas
escaped the brunt of the Great Recession
of 2007-2009 that has continued to drag
much of the global economy. During that
period, Corpus Christi experienced less
severe economic declines than the rest
of the nation. The metro area returned
to its pre-recession conditions as early as
mid-2011.
6%
4%
-2.5%
proposed South Texas Economic Development Center
By 2012, local businesses in Corpus
Christi had added back most of the jobs
destroyed during the last economic downturn. Among all months in 2012, employ-
Expansion in the Eagle Ford oil and
gas drilling activity has been the underlying source of economic growth in South
Texas. Oil and gas production has helped
boost employment growth by more than
10 percent in Corpus Christi’s mining and
construction industries. Local businesses
in lodging and food services together have
also added 8 percent more jobs as spillover effects from the oil boom.
Annual Review of the South Texas Economy – 2014 Edition
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