Potential Long-Term Impact Of Coronavirus On Texas Economy Unclear

Alan Scaia
February 28, 2020 - 2:21 pm
downtown Dallas

Nate Hovee/GettyIamges

DALLAS (1080 KRLD) - While markets have been dropping this week as coronavirus spreads, economists say it is too soon to predict the impact on the Texas economy.

"Markets tend to overreact to initial news," says Ray Perryman, an economist in Waco. "I think you're more than likely seeing some of that happen right now."

Perryman says effects of coronavirus are likely to mimic SARS. He says the virus could have a short-term impact on supply, but Texas has outperformed the national economy for years. Perryman says the state's economy is likely to keep growing but at a slower rate.

"Obviously, the price of oil is an issue because we're a very big energy state," he says. "Also, we're a big manufacturing state. A lot of the goods we manufacture here, some of the component parts are made in China. Supply chains operate very tightly now."

The Texas Comptroller says revenue may drop because of the virus, but while coronavirus is a serious issue, the flu is more widespread. Each year, Comptroller Glenn Hegar says the state must build the impact of people with the flu into its revenue forecast for each budget.

"Don't try to get people worried and worked up. The world is not collapsing," he says.

Hegar was answering questions on a range of topics from business owners in Frisco.

"Yes, this is a serious issue, but businesses try to take into account, 'How do we deal with these potential disruptions?'" he says.​ "The common flu is way more disruptive to the economy than coronavirus. It is every year. However, that doesn't mean you go, 'Oh, don't worry about it.'"

Perryman says an ongoing disruption to supply lines from China could disrupt the state's economy. China is Texas' third biggest international trade partner, behind Mexico and Canada. Trade with China was about $11 billion in 2018. Trade with Mexico totaled almost $110 billion.