Texas powerhouses contend economic outlook is promising

PAST: Texas’ population grew 16.7 percent in the last eight years, placing it in the top tier of fastest-growing states.

PRESENT: The current population in Texas is approximately 24 million.

FUTURE: By 2050, Texas’ population will almost double to 40 million.

NACOGDOCHES – Dr. M. Ray Perryman is in the business of crunching numbers and predicting how to plan and profit from that data in the future.

The Waco-based economist was the keynote speaker last Thursday at the East Texas Economic Development Summit in Nacogdoches, following powerhouse speakers Gov. Rick Perry, Lt. Gov. David Dewhurst and Texas Agriculture Commissioner Todd Staples.

Looking ahead

The consensus among them is that the national economic picture is improving; Texas is weathering the recession better than most states; and energy and technology will be the two sectors that lead the state’s recovery. Using current and projected population trends, each offered insight into how that growth will impact Texas by 2050.

Commissioner Staples said the increase in population translates to a net decrease of 1.5 million acres of agricultural land. “This amounts to a per capita loss of 270 acres for each 1,000 new residents. We’ve got to do the math on water needs, infrastructure and figure out what this means in an opportunity for our state. This summit is all about recognizing those challenges and developing a strategy for success.”

Extrapolating from population statistics, Dr. Perryman said that 1,000 new residents move to Texas each day. Just to meet housing needs for this burgeoning population, Texas will need to add 165,000 multi-family and single family homes each year to keep pace.

“What that means on highways, schools, water and sewer is that it will be a challenge to keep that, and everything else, going. But it’s also a huge opportunity that will define our future with new emerging technologies,” said Commissioner Staples.

“In bad times, good is ‘relative,’” Dr. Perryman said. “Regarding housing, our situation is not as bad as it could have been. We overbuilt the market, but not drastically. This is not worse than the 1980s – that was the worst time for Texas since the Great Depression.” He said builders have stopped building in Texas and will likely construct only 86,000 units this year.

He applauded passage of Proposition 4 on the Nov. 11 ballot, which creates a pathway for additional top tier research universities.

“Companies want to congregate around educational institutions. Look at microelectronics in Austin and the University of Texas,” he said. Biotechnology and food represent new frontiers for business development.

“If you bring in research money, you create jobs,” he said. To illustrate the point, he cited the national gross domestic product (GDP) at $14 trillion. The gross domestic product of start-up businesses founded by Massachusetts Institute of Technology alumni is $2 trillion. Dr. Perryman said that Massachusetts understands the incubation process between business and education, and so does California.

Texas is starting to “get it.”

“Technology will be something that leads us out of the recession,” he said. “And so will energy.”

Dr. Perryman said that Texas represents eight percent of the national economy; however, the state only lost four percent of what the country lost during the recession.

Lt. Gov. Dewhurst agreed with Dr. Perryman on education as a pathway for creating new jobs. “We must improve public schools and universities so they can prepare workers and leaders to succeed,” he said. “We have tried to create

pro-growth, pro-business environment in Texas, and people all around the country are hearing about this.

“Over the last three years, Texas is #1 in creating jobs; #1 as the place to do business; we have more Fortune 500 companies in Texas than any other state. This is huge – think of the business opportunities.”

Quoting State Comptroller Susan Combs, the lieutenant governor said that Texas was the last state to go into the national recession and will be the first one to come out.

Gov. Perry said that Texas is not playing the shell game that is being played out in Washington, D.C. “I tell anyone who will listen: this is the land of opportunity; it’s

place where you can risk your capital and expect a good return. Regulations are fair and predictable. You won’t be frivolously sued. I’m proud to talk about a state where government leaders embrace cutting spending and place a priority on the investment of job creation.”

He said Texas is attracting employers who have been chased out of other states and they are finding that Texas’ doors and arms are open. “We have a high-tech work force that is getting stronger by the day.”

Saying there is more to Texas than Dallas and Houston, the governor cited the Texas Enterprise Zone, which issues grants and incentives for companies relocating to Texas. The fund has been used on 10 projects and invested $500 million since 2005; $45 million was spent in East Texas.

“Some people may think we are exaggerating. But you know what we say. If you can do it, it ain’t bragging.”

Dr. Perryman asked rhetorically, “Why are things so much better in Texas? It is the incredible economic development climate.”

Shifting his focus from the statewide economy to the East Texas region, Dr. Perryman acknowledged that growth has been slower than the state average. “But (the good news is) that it doesn’t go down as much in a downturn.”

The forecast is for a 2.2 percent job growth in the deep East Texas region. “Basically, things will be getting back to normal. You may see a few more months of job loss,” he said, “but it’s turning around.”

The East Texas Economic Development Summit was initiated 10 years ago by thenstate Sen. Todd Staples as a way to bring Austin resources to East Texas for a networking opportunity.

The event was considered a success by East Texas business and civic leaders, and it has been repeated every two years in non-election years.

State Sen. Robert Nichols said, “The theme for this year’s event is, ‘Opportunity is Knocking: Are You Ready?’”

More than 300 persons attended the event, hosted by Sen. Nichols, Commissioner Staples and the Texas Forest Country Partnership.