San Antonio job outlook better than Texas’

San Antonio job growth will slow this year from 2015 but will outpace the rest of the state in 2016, the Federal Reserve’s economist for San Antonio said Tuesday.

That’s the good news. The bad news is that Texas is on the edge of losing jobs this year.

It all hinges on oil prices, said Keith Phillips, assistant vice president and senior economist of the Federal Reserve Bank of Dallas branch in San Antonio.

But first, San Antonio. The city job-growth rate last year was 3.6 percent, the same as 2014. That percentage translated to net growth of 35,000 jobs in the metropolitan area last year.

San Antonio job growth will slow to 2 to 3 percent in 2016, or between 20,000 and 30,000 net new jobs, with the best job expansion occurring in the health care and leisure/hospitality sectors, Phillips said in an interview Tuesday.

Phillips’ forecast for Texas job growth was conditional. He predicted 1.4 percent job growth for the state, about the same as last year, but only if crude oil prices trade mainly in the $40 to $50 per-barrel range. That “is pretty weak,” he said at an invitation-only luncheon Tuesday for about 100 area business leaders at the Fed’s downtown branch offices.

As Phillips delivered his forecasts to the crowd, U.S. oil dipped below $30 a barrel, sparking speculation that it could yet fall as low as $20.

If oil prices settle in the $20 to $30 range for most of this year, Texas could see net job losses, he warned.

Phillips, as in the past, said he doesn’t predict oil prices because too many shaky and global factors are involved.

“There’s no effective mechanism to predict oil prices,” he said. “If I had to make a forecast, I would say between $15 and $90. That would be a confident prediction,” he joked.

San Antonio job levels won’t turn negative, however. The metropolitan area’s total jobs actually might surpass the 1 million mark this month. Last year, San Antonio’s job growth wasn’t dented by falling oil prices because only about 2 to 3 percent of its job base is related to the energy sector.

The state, however, will see its job-growth rate fall below the national rate for the second year in a row. The national rate last year was 1.8 percent, while Texas managed only 1.3 percent.

The U.S. job growth rate is projected to rise to between 2.1 and 2.6 percent, about what San Antonio will see, Phillips said, citing an index of national forecasters.

The Texas unemployment rate, now about 4.6 percent, will rise to 4.9 percent by the end of 2016, Phillips also said, as active drilling fields dwindle in number. Texas lost 50,000 energy jobs in 2015, he said, accounting for about a third of the state’s job losses.

Texas’ job growth rate fell to No. 32 last year after ranking third in the nation in 2014. That actually is the best among the handful of big energy states. North Dakota went from first in job growth in 2014 to last in 2015.

“Oil and gas is not all that is going on in Texas,” Phillips stressed.

Phillips has earned numerous credentials as one of the nation’s top economic forecasters. A year ago, his forecast for Texas was in the right direction, foreseeing that it would slow. But “it was not weak enough,” Phillips said of his forecast a year ago.

Health care will be the most robust economic sector in Texas and San Antonio, Phillips said. The reason: More people have insurance.

Manufacturing, along with mining (which includes oil-and-gas drilling) will be among the weaker sectors, partly because of the strong U.S. dollar.

Wages are rising overall in Texas but face pressure as laid-off energy workers take jobs in other sectors that pay less, Phillips said.

As 2015 came to a close, market volatility made it seem like 2016 would be a difficult year to predict. The stock market was showing signs of nervousness as the economy cooled and corporate earnings flattened. The global economy wobbled as China’s economic growth slowed dramatically, too.

But Phillips was smart Tuesday to frame his state forecast as conditional on oil prices.

“A lot of what Keith is saying is pointing to a continued balanced economy” in San Antonio, Mario Hernandez, San Antonio Economic Development Foundation president, said after Phillips’ presentation.

“It’s what we are seeing, too,” Hernandez said. “We’re seeing health care, business services, financial and insurance. We can continue to attract (business investments and jobs) in those … All in all, it’s a good story.”

dhendricks@express-news.net