During Texas’ oil bust of the 1980s, the state’s economy became unhinged, particular in Houston. The Oil Capital of the World was simply devastated by a decline in oil prices and all of the ensuing effects. Production slowed, tens of thousands of jobs were lost, and the real estate market burned like Tara in Gone with the Wind.

But this time around─if oil prices continue a downward spiral─Texas and Houston are better equipped to withstand moderate to severe dips, according to a BBVA Compass report.

“Today there are striking differences with the 1980s–when Texas suffered one of the worst recessions ever–that suggest that the downside risks are relatively contained,” BBVA Compass economist Boyd Nash-Stacey said in the Nov. 18 report.

Some of those “striking differences” are greater economic diversification, increased trade openness, regional and national bank financing, and the absence of a real estate bubble, Nash-Stacey stated.

Texas’ strong ties to the oil and gas industry “suggest that persistently low prices, or a sharp drop in prices, would create economic headwinds,” Nash-Stacey said.

For Houston, which has a large number of mining-sector employees and is one-third of the state's economy, the outlook is less dire, the report indicates.

"While it's obvious that a decline in oil prices will negatively impact Houston's economy, our estimates suggest a moderate-to-mild impact," Nash-Stacey said.

But he predicts that the impact of shrinking prices may not be as detrimental for the state as it had in the past. The report stated that Texas’ largest metropolitan areas are now less dependent on oil and gas profits. BBVA cited efforts after the 1980s to build economic diversification, thus reducing the probability of another devastating shock that could result from falling oil prices.

However, Nash-Stacey said, areas in Central and West Texas that have high concentrations of drilling activity and are less diversified economically “are vulnerable to oil-price shocks.”

In Dallas-Fort Worth, Austin, San Antonio and El Paso, the outlook is “slightly more optimistic,” he said.