DALLAS, June 2 (UPI) -- Though much of the Texas oil economy remains under pressure, a report from the Federal Reserve Bank of Dallas found cautious optimism on the margins.
Crude oil prices are up about 80 percent from their low point below $30 per barrel early this year. For Texas, the No. 1 oil producer in the United States, that has yet to spill over into major economic recovery.
Keith Phillips, a senior economist with the Federal Reserve Bank of Dallas, said last week there's little chance, however, of a formal recession for Texas. A metric created by the bank, the Texas Business Cycle Index, finds that, overall, the state economy is actually expanding.
The bank said in a report that lower oil prices meant cheaper fuel for most consumers. While automobile sales were up slightly from one year ago, more people were buying trucks and sports utility vehicles than cars.
The average retail price for a gallon of regular unleaded gasoline in Texas for Thursday was $2.12, about 9 percent less than the national average.
On the corporate front, the bank said many consulting and legal firms were reporting "a lot" of restructuring in and around the Houston metropolitan area, with accounting firms reporting good momentum despite the decline in the region for energy industries.
Leisure and hospitality sectors reported strong demand in most Texas markets, though parts of the state are on a downturn because of heavy rains and flooding.
"Outlooks for the residential sector were positive except for Houston, where contacts expect further weakness this year," the bank said.
Drilling contracts, meanwhile, continue to drop and many firms, notably the smaller ones, told the bank they are still facing significant market headwinds despite the recovery in crude oil prices.
"Confidence continued to build that oil prices have found a bottom; however, firms want prices to remain at these levels for a while longer before making any changes to existing business plans," the bank said. "Outlooks remained somber for 2016, with little hope for growth before 2017."