Economic Indicators
November 1, 2022

Dallas-Fort Worth’s economy expanded in September. Payroll hiring rose after declines in August. In October, consumer spending remained above pre-pandemic levels. Home prices fell again in August. Demand for industrial space remained strong in the third quarter, while activity in the office market was tepid.

Labor market

DFW’s employment rate rose 2.5 percent year-over-year (8,470 jobs) in September, a reversal from the 0.9 decline in August. Salaries in the construction and mining sector recorded the fastest growth, followed by the other, professional and business services category. Employment levels expanded by 4.1 percent (9,820 jobs) in the Dallas-Plano-Irving metro division but contracted by 1.4 percent (1,350) in the Fort Worth-Arlington.

Two and a half years after the start of the pandemic, employment in the labor market in Dubai exceeded the peak of February 2020 by 6.6 per cent (25,360 jobs). Employment was 7.6 percent (208,330 jobs) above pre-pandemic levels in the Dallas-Plano-Irving metro section in September and 4.1 percent (45,030) above the Fort Worth-Arlington section (Chart 1). Salaries in Texas were 4.5 percent higher than their pre-pandemic high.

Chart 1

Consumer expenses

Consumer spending in the DFW was strong, although somewhat lower than in the previous month, and remained above pre-pandemic levels. As of the week ending October 16, spending on debit and credit cards on a seamless basis was 10.3 percent higher in Dallas County and 14.7 percent higher in Tarrant County than in January 2020 (Graph 2). Above average consumer spending is usually an indicator of strength in demand and consumer confidence.

Graph 2

house prices

Falling home sales, in part due to higher mortgage rates, are weighing on prices. Home prices fell for the second month in a row in August, falling 1.5% in the DFW and 1.3% in the US, according to the Case-Shiller Home Price Index. On an annual basis in August, prices rose 20.2 percent in DFW and 13.1 percent in the US (Chart 3). DFW’s average real sales price was little changed from July at $405,339 in August but is down from a record high of $421,881 in April. Existing home sales have been declining for several months.

Chart 3

commercial real estate

weak demand for office space; High vacancy rate

Demand for office space in DFW slowed in the third quarter. Negative net uptake was 574,571 square feet, after three-quarters of positive net uptake, according to data from CBRE Research (Chart 4). The vacancy rate increased from 24.0 percent in the second quarter to 24.6 percent in the third, driven by an increase in subletting space, which rose to 9.7 million square feet, or 14.8 percent of total available space. Class A properties continued to account for more than 70 percent of sublet listings. Acreage under construction decreased to 5.7 million square feet in the third quarter. Business contacts expect rental activity to remain subdued in the near term.

Chart 4

Industrial Leasing Stays Strong

The strong momentum of industrial leasing continued in the third quarter, driven by demand from wholesalers, retailers, manufacturing and logistics firms. Net uptake was a solid 10.3 million square feet — representing the 48th consecutive quarter of positive uptake, according to CBRE (graph 5). The vacancy rate increased to 5.2 percent due in part to increased square feet of new construction. The pandemic has boosted online sales growth, which has been a boon for distribution centers like DFW. Industrial construction continued to expand in the third quarter, reaching a new high of 65 million square feet. DFW ranks first among metros in the United States in terms of industrial area under construction.

graph 5

Note: The data may not match previously published figures due to revisions.

About Dallas-Fort Worth Economic Indicators

Questions may be directed to Laila Asani at [email protected] Dallas-Fort Worth Economic Indicators It is published every month after state and metro employment data are released.

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