Nonagricultural wage and salary employment increased by 3.4 percent in the 12-month period ending in February 1998. The gain was supported by strong growth in Texas (4.2 percent) and by less dramatic but still healthy rates of growth in Oklahoma (2.3 percent), Arkansas (1.6 percent), Louisiana (1.7 percent), and New Mexico (1.8 percent). Despite lower oil prices, employment in the mining sector showed significant increases of 8 percent in Louisiana and 6 percent in Texas over the 12-month period. In the Albuquerque area, NationsBank and the Sprint Corporation are opening call centers, and Gateway 2000 is starting a technical support center. With 1,000 employees combined, these new centers will more than offset the announced layoff of workers at CIGNA Healthcare, Motorola, and Presbyterian Healthcare Services.

Employment gains in Texas in 1997 of more than 350,000 jobs were larger than the height of the 1980s boom in 1984. The Dallas metropolitan area led the Southwest with 97,000 new jobs, a 5.8-percent increase over 1996. The Houston metropolitan area added 77,800 new jobs, a 4.3-percent increase. The McAllen-Edinburg-Mission metropolitan area along the Mexican border had the largest percentage gain at 6.6 percent, adding 8,400 jobs. Exports have played a major role in Texas' economic expansion in the 1990s, accounting for a record $84.3 billion in 1997, an increase of 14 percent over 1996. During the past 5 years, exports have increased by 69 percent.

In 1997, residential building permits were issued in the Southwest region for a total of 173,610 housing units, a 2.9-percent increase over 1996. Permits for multifamily housing increased by 19 percent from 45,990 to 54,705 units, and permits for single-family homes fell by 3 percent from 122,795 to 118,905 after a very strong 1996. Texas, with a total of 82,180 single-family permits in 1997, was 11 percent below the 1996 high of 83,103 permits. Home construction in the Dallas-Fort Worth area made up 33 percent of the State's activity, and the Houston-Galveston-Brazoria area accounted for 26 percent. During the first quarter of 1998, single-family permit activity was up almost 20 percent over the first quarter of 1997.

In the Dallas area, some real estate industry analysts are concerned about the reemerging and increasing amounts of speculative residential construction and draw similarities to the early 1980s. However, a comparison of residential building permits is reassuring. The number of single-family permits issued in 1997 totaled 19,434 units, compared with 21,581 units in 1983 when there was a much smaller population base. The multifamily housing comparison is even more dramatic; permit activity in 1997 totaled 14,045 units, compared with almost 55,000 units in 1983. Any near-term overbuilding, therefore, is likely to be less intense and of a much shorter duration than the 1980s' market collapse.

The rental market in the Dallas-Fort Worth area remains strong. Apartment occupancy rates in the Dallas area remain around 94 percent. In the Houston area, the overall apartment occupancy rate is 95 percent, and it is even higher near downtown Houston and inside the Interstate 610 Loop. Apartment occupancy in the New Orleans area is holding at about 92 percent. The rental market is still soft in the city of New Orleans, where overall apartment occupancy is about 86 percent.

Spotlight on Tulsa, Oklahoma

The population of the 5-county Tulsa metropolitan area was estimated to be 764,000 persons as of July 1997, an increase of 55,400 (7.8 percent) since the 1990 census. The metropolitan area's population will grow by 1 percent during 1998, according to estimates by Oklahoma State University.

Tulsa just celebrated its centennial. With an abundance of affordable, undeveloped land, development historically leapfrogged in all directions. However, the city has recently begun a concerted effort to attract industrial, commercial, and residential development to its urban core. Tulsa has been designated as a Brownfields Assessment Pilot by the U.S. Environmental Protection Agency, and the city is actively seeking development activities for 46 sites.

The city council recently approved the submission of a $12 million Section 108 loan application and $7.9 million in local tax incentives to aid in the restoration of the Mayo Hotel, a downtown landmark. Closed for almost 20 years, the Mayo will become a 250- to 300-room hotel following rehabilitation. Two central-city residential communities are also being developed -- a 156-unit rental complex is under construction, and conversion of the Tribune Building into luxury loft apartments is under way.

Employment increased by 15,300 jobs in the metropolitan area during the 12 months ending February 1998, a 4.2-percent increase over the comparable period a year earlier. The majority of new jobs was created by expansions of large local employers such as American Airlines, Commercial Financial Services (CFS), Whirlpool, and Worldcom. Prospects for continued employment growth are good, although a reported shortage of skilled workers could delay some expansions. CFS, the largest debt collection firm in the country, will increase its hiring pace (currently at 70 people per week) to meet its goal of 9,000 additional employees over the next 3 years. CFS currently employs slightly more than 3,000 persons, 90 percent in the Tulsa area. Although its headquarters are in Jackson, Mississippi, Worldcom's largest employee base is in Tulsa. Worldcom has announced plans to expand its local workforce from 3,400 to 6,000 employees if its proposed acquisition of MCI is approved.

The Tulsa sales housing market has been increasingly active during the past 4 years. From 1990 through 1993, single-family permits averaged 2,350 homes annually. Since 1994, nearly 2,700 homes have been permitted annually. The Greater Tulsa Association of REALTORS^® reported an average sales price of $105,000 for the 8,249 homes sold during 1997, which represented a 6-percent increase in price and an 8-percent increase in volume over 1996. Home construction continues to be strong in the southern part of Tulsa County, including the community of Broken Arrow.

The rental market is steadily improving following 10 years of soft market conditions. From 1988 through 1993, multifamily housing production averaged only 90 units per year. Since 1994, multifamily permit activity has averaged 650 units annually. An estimated 1,500 units should come on the market within the next 12 months. New units have been readily absorbed, and the overall apartment occupancy rate increased about 1 percentage point over the past 12 months to 95 percent. Rental rates increased about 6 percent during 1997 and will likely post a similar increase in 1998.