Over the 12-month period ending February 2000, the Southwest region added 278,500 jobs, a 2-percent annual growth rate, compared with 2.6 percent in the previous 12-month period. The service sector added more than 126,600 jobs, trade more than 82,100 jobs, and construction more than 41,900 jobs, but manufacturing jobs continued to decline. Texas continued to lead the region with 2.3-percent growth, followed by 1.8 percent in Arkansas, 1.4 percent in both Oklahoma and New Mexico, and a negligible 0.3-percent increase in Louisiana. Job growth in New Mexico during the period was the result of the growing call center industry and new high-technology companies in and around Albuquerque. New Mexico's economy is expected to be more robust in coming months, with increased tourism and expansion of Native American-based gambling casinos. The Texas economy is expected to experience a slower rate of growth during the remainder of 2000, due in large part to increasingly tight labor markets, especially in the high-growth Dallas-Fort Worth and Austin-San Marcos areas. The financial services industry in Houston will receive a boost this year when Chase Manhattan Bank moves its $39-billion equity management business operations from New York.

In March, tornadoes hit Fort Worth, Arlington, and Grand Prairie. The Fort Worth tornado destroyed 93 homes and damaged 1,200 other homes and a number of businesses. Initial damage estimates topped $500 million.

For the first 3 months of 2000, single-family home building permits in the Southwest were up 4 percent from first-quarter 1999 volume, to 37,320 units. In the Dallas-Fort Worth area, new home sales in the first quarter of 2000 were up by more than 11 percent from first-quarter 1999 volume.

Multifamily housing activity during the first 3 months of 2000 totaled 7,086 units, less than half the level for the same period in 1999. The combination of higher interest rates and overbuilding in some of the suburban markets has curtailed multifamily activity in the Dallas and Houston areas. The permit slowdown should allow overall apartment occupancy rates in Dallas and Houston to remain in the low 90s over the next year.

The rental housing market in Albuquerque improved in the past year. Apartment occupancy as of the first quarter of 2000 was up to 91 percent, compared with 88 percent a year earlier. Rent increases, though small, were evident, and construction activity increased. Two new projects are currently under construction in the northwest part of the city: a 264-unit tax-credit development and a 50-unit market-rate project. An additional 750 units are in the planning stages, including approximately 200 units to be financed with LIHTCs. The low level of new construction activity and the large growth in jobs should allow the apartment market vacancy rate to decline over the next 12 months.

The tight condition of the Austin-San Marcos rental housing market will ease somewhat over the next 12 months as a result of the large number of units that are scheduled for completion. Local sources estimate that rent increases of 4 percent or less will be typical in the coming year, compared with 7 percent and above in 1999. Overall apartment occupancy is anticipated to drop from more than 97 percent to approximately 95 percent.

Spotlight on Oklahoma City, Oklahoma

The Oklahoma City metropolitan area has experienced a slow rate of population growth (less than 1 percent annually) since 1990. The population of the metropolitan area as of July 1999 was estimated at 1,050,000.

Oklahoma City's economy has witnessed increased diversity over the past 20 years as dependence on energy-related industries has waned. The largest shift has occurred in the service sector. Service employment comprised 19 percent of total employment in 1982 but 31 percent in 1999. Call centers were responsible for many of the service-sector jobs. During 1999, there were 8 announcements for new or expanded call centers, with a potential for more than 5,000 additional jobs. Nonagricultural wage and salary employment grew 2.4 percent in the 12 months ending in February 2000, to 534,700. However, the growth rate for the remainder of the year is expected to slow due to a tight local labor market. Unemployment as of February 2000 was 2.5 percent, down from 3.2 percent in February 1999.

Among the larger employers in the area are the State of Oklahoma, the U.S. Air Force (Tinker Air Force Base), the University of Oklahoma Health Sciences Center, the University of Oklahoma (in Norman), Lucent Technologies, General Motors Corporation, and Hertz Corporation. Employment at Tinker Air Force Base has increased by more than 2,500 jobs since the mid-1990s. Current employment at the base includes 9,200 military and 18,500 civilian personnel.

An expanding economy and reconstruction as a result of the tornadoes in May 1999 caused a record year for single-family home building permit activity in the Oklahoma City area. The 5,222 single-family permits issued, a 12-percent increase from 1998, were more than 2 times the level of activity at the beginning of the decade. According to the Oklahoma City Metropolitan Association of REALTORS^®, existing home sales reached an all-time high of 13,865 homes in 1999, up 9 percent from 1998. The median sales price for existing homes in 1999 increased by more than 4 percent from 1998, to $84,500. Sales were strong in all price ranges. The Oklahoma City Council recently voted to allow manufactured housing units within a traditional inner-city neighborhood. This change in policy will provide affordable housing on vacant lots in areas where it would not be economically feasible to use conventional building methods. The homes must be at least 24 feet wide, attached to permanent foundations with crawl spaces, and connected to public water and sewer systems.

Approximately 6,000 apartment units were completed in the past 48 months and another 1,500 are expected to come on the market during the remainder of 2000. Virtually all are top-of-the-market rentals. The number of multifamily units permitted during the first quarter of 2000 was 513 units. The overall occupancy rate for apartments in the Oklahoma City area was 93 percent during the first quarter of 2000, virtually unchanged from 1 year earlier. Occupancy rates are expected to remain relatively stable through the remainder of the year, as renter household growth absorbs the new units coming on line.