2007 Texas Fundamentals Stronger Than US

"Overall, the Texas economy is much stronger than the national economy," Mine Yucel, vice president of the Federal Reserve Bank of Dallas, told at least 400 investors and brokers at last night's fifth annual Henry S. Miller Commercial conference at the Prestonwood Country Club in North Dallas. The economist delved into the underbelly of the state's drivers, including some pitfalls.

"The national picture is weak," Yucel said, "but we're not that bad off here." Among the risks is a tightening labor market of skilled and unskilled workers and shifts in construction, particularly in the housing market.

Overall, Texas remains a frontrunner in exports while staying top-ranked in job growth, population increases and energy advantage. "Texas fundamentals are sound," Yucel stressed. "We're quite bullish and we think Texas will do quite well the rest of this year."

Yucel said the latest stats show 300,000 jobs were created statewide last year, representing about a 3% growth. And, unemployment is just 4.4%.

As of August 2006, Texas exported $12 billion of wares, representing 15% of the nation's output. In a breakdown of the destinations, Yucel said 35% of Texas' exported goods end up in Mexico, 20% in Asia, 12% in the European Union, 11% in Latin America, 10% in Canada and 5% in China. Two years ago, exports to China were nudging 3%. "It's growing exponentially," Yucel said.

Although the word "recession" is on everyone's minds, Yucel said Texas has stronger safeguards than most since nine of the 10 past recessions were led by "oil price shocks." And, she added, the price isn't likely to crater to a danger level for the state.

In a week laden with 2007 forecasts, Vance C. Miller, chairman and CEO, opened the event while Sam G. Kartalis, president and COO of Henry S. Miller Commercial moderated a panel of in-house leaders as they reviewed the past and predicted the future for 2007. The panel headliners were Vaughn E. Miller, president of retail; Robert J. Grunnah, president of investment properties; Greg G. Trout, president of office and industrial; Ray Utley, president of land, farm and ranch; and Don R. Plunk president of HSM Development Inc.