Dallas-Fort Worth Economic Indicators – Dallasfed.org

The Dallas-Fort Worth economy gained momentum in September. Payroll growth accelerated, unemployment fell, and retail sales tax collections increased. Demand for office space remained weak in the third quarter, but industrial leasing remained active.

employment

Employment growth accelerates

DFW added 28,000 jobs in September, up from 12,000 jobs in August. His DFW employment in the third quarter increased at an annualized rate of 5.6 percent, an acceleration from his 4.0 percent increase in the second quarter (chart 1). DFW's increases spread across major sectors over the three-month period, with only information services employment remaining relatively stable. Construction and mining, leisure and hospitality, education and health services, professional and business services, and other service sectors recorded significant increases in salaries.

Decrease in unemployment rate

DFW's labor market remains tight. In DFW the unemployment rate fell to 3.8%, while in Texas it remained flat at 4.1% (chart 2). The US unemployment rate remained unchanged at 3.8%. DFW's labor force population grew at an annual rate of 3.2%, which is faster than the national increase of 0.6%.

Collection of retail sales tax

September DFW retail sales tax collections increased 3.2% to $253 million (chart 3). Sales tax collections rose 2.0% in Dallas and 6.6% in Fort Worth last month, outpacing the state's roughly flat growth in September. Retail sales tax collections in the region increased 2.5% year over year, compared to a 1.5% decline in Texas collections.

commercial real estate

Office vacancies increase

Demand for office space in DFW remained subdued in the third quarter (chart 4). Net absorption decreased by 173,202 square feet due to net displacement from older or less desirable Class B space, according to data from CBRE Research. The vacancy rate rose from 24.6 percent to 25.1 percent, which equates to more than 58 million square feet of vacant space. Sublease space availability further increased to 10.6 million square feet, representing 15.4% of total availability. Additions were concentrated in suburban markets. The volume of space under construction decreased to 3.4 million square feet in the third quarter, of which 15 percent was pre-released. Businesses note that leasing activity, a leading indicator of the amount of commercial real estate absorbed by the market, or net absorption, remains weak, suggesting continued weakness in the near term. did.

Industrial rental is steady, but vacancies are increasing

The strong momentum in industrial leasing continued in the third quarter, driven by demand from third-party logistics companies, manufacturing companies, and wholesalers. According to CBRE, net absorption was 4.2 million square feet, marking the 52nd consecutive quarter of positive absorption (chart 5). Vacancy increased 40 basis points to 6.8% due to higher delivery levels, which totaled 8.1 million square feet in the third quarter. DFW continues to rank as one of the nation's largest markets with his 47 million square feet of industrial development under construction. While this number is still rising, it is down compared to the second quarter. The North Fort Worth submarket has the highest level of speculative construction, followed by the East Dallas submarket.