Houston 2002 Won't Bring Any Economic Surprises

Smith was yesterday's keynote speaker for several hundred business professionals, including the commercial real estate sector, at the Briar Club in the Galleria area. He advised caution in interpreting reports that 2001 was particularly bad and current ones touting the strength of the recovery. "In the technical sense, there was no recession," he contended. As for a rebound, it's not going to get much better until 2003. "All signs indicate a much brighter 2003," he said, "most of the engines of our economy will be generating positive results."

Houston's job growth was downgraded by 2/10ths of a point by the Texas Workforce Commission. Smith pointed out that it's nothing compared to Dallas and Austin. "I hope none of you here own real estate in Austin," he said.

Business investment must pick up before it can be considered a full economic recovery. "We can't count on consumer spending to carry the economy," he said.

A Houston rebound naturally hinges on a national recovery. And that, Smith said, is tied to easing tensions in the world's hotbeds of violence such as the Middle East or calming social unrest in Argentina and Indonesia.

Smith dismissed the Compaq merger, Enron bankruptcy and Continental Airlines deteriorated business as "non-events." He said he has not been able to see their effects in any of the economic data that he has collected and analyzed. "Houston's non-energy sector is so diversified that we are not as exposed," he explained.

Now that his economic presentation is done, the esteemed Smith steps back to the dais in early May to release his findings on Houston's real estate community. Smith's regional forecasting institute is part of the University of Houston's Center for Public Policy.