The Dallas Morning News: According to a new report from the Federal Reserve Bank of Kansas City, Texas is among the states that have escaped the worst of the recession because of a relatively heavy reliance on oil and gas production.
The modern myth is that Texas is no longer dependent on energy, that we’ve diversified our economy so much, that we are no longer captive to the volatile energy cycles. Not so, according to the report. In fact, the oil and gas industry contributed a larger portion of the Texas economy in 2008 than in 1982.
The report finds that “the economies of energy states remain highly sensitive to changes in energy prices and follow a much different economic cycle than non-energy states. The energy states posted far stronger job growth prior to the recession, entered the recession much later and with more momentum, and have posted smaller cumulative job losses than non-energy staets,” the report says.
Because the energy boom/bust cycle tends to be counter to broader economic cycles, the energy states haven’t experienced recessions as deeply as other states, according to the report.
Energy states, including Texas, Alaska, Louisiana, New Mexico and Oklahoma did eventually see their economies decline, once the cycle of high energy prices had passed.
