Home Business Insights & Advice HillCo Partners review current economic trends in Texas

HillCo Partners review current economic trends in Texas

by Sponsored Content
25th Mar 22 2:21 pm

HillCo Partners opened for business in 1998. The government consultancy firm was established by two leading lobbyists, Neal T. “Buddy” Jones and William J.Bill Miller. HillCo has been integral in moving some of the most important bills through the Texas legislature. Its communications team keeps its clients in the loop of all major developments, allowing them to stay ahead of the curve. The firm maintains a watchful eye over economic trends in Texas and compiles this information for its clients. The company recently shared an economic update that covers several important factors that are integral in assessing Texas’ bond rating.

State sales tax revenue

The state seems to be recovering well from the economic fallout caused by the pandemic. The good news was shared by Glenn Hegar, the Texas comptroller. He said that as of February 2022, Texas has experienced steady growth in revenue from sales tax. The first month of 2022 saw Texas earn $3.85 billion from sales tax alone, a 25.3% increase from the figures in January 2021. This surge in sales came during December 2021, a popular shopping month, and earnings have been reflected in January since the tax was remitted to the agency at a later date. According to Hegar, all sectors performed significantly well during December, which translated into January recording all-time high sales receipts, and revenues from sales tax are a good indication of economic recovery. In addition, the restaurant industry, a sector that had faced depression for almost a year, has experienced a sharp upturn and the industry is now recording receipts above pre-pandemic levels.

Wages and price pressure

The pandemic caused significant labor and supply chain shortages. As a result of these shortages, there was a sharp increase in wage and price pressures. In 2021, Texas experienced inflation plateauing at a very high level. There was a sharp increase in the wages and benefits index to 34.7, according to the Federal Reserve Bank of Dallas. Similarly, the selling prices index rose to 22.7. The input price index stood at 80.4 in September 2021 and then dropped to 73.6 in October. October, however, proved to be a good month as it experienced steady growth that neared record highs. Prices for value-added goods remained at an all-time high.

Labour market

Here is a breakdown of the key indicators of the labour market, as of December 2021:

  • Unemployment: 5%
  • Job Changes in 2021: 694,400
  • Annual Growth Rate: 5.6%
  • Total Non-Farm Employment: 13,059,600

December was a good month for the Texas labour market, as unemployment shrank and employment saw a steady increase. The services sector seemed to be doing well, with a 5.3% increase, while the goods-producing sector recorded a 3.9% increase. The services sector recorded employment levels at 0.8% above February 2020 numbers. The goods-producing sector still needs work, as it is 5.8% below pre-pandemic levels.

Overall, the state of Texas has been doing better than the rest of the United States. Total employment in Texas increased by 5.1% in 2021, while the national average was at 4.5%. Compared to the national averages, all sectors in Texas were performing well, except for leisure and hospitality, oil and gas, and professional and business services.

Texas’ bond rating

A state’s bond ratings are indicators of its ability to repay its debts. These ratings are calculated by the “Big Three” credit rating agencies: Fitch Ratings, S&P  Global Ratings, and Moody’s. These ratings are essential indicators for investors. A good rating means the state will make timely payments and has a lower likelihood of default. Below is a breakdown of the ratings received by Texas:

  • S&P: AAA
  • Moody’s: Aaa
  • Fitch: AAA

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