texas - a&mpresentation

7/29/2019 Texas - A&Mpresentation

1/46

TheEconomicOutlookforBusiness

Ownersand

Investors

Dr.Mark

G.

Dotzour

ChiefEconomist

RealEstateCenter

TexasA&M

University

CollegeStation,TX


2/46

ReadDotzourblogsat

blog.recenter.tamu.edu

Recenttopicsinclude:

TexasResidential

Sales

Market

Recovering

TexasHomeBuildingRecoveryHasBegun

Whatif

You

Had

Bought

at

the

Peak?

WheretheJobsareinAmerica

Greenspan

Suggests

RTC

is

the

Way

to

Go


3/46


4/46


5/46


6/46

BuildingPermitsIssuedintheFirstFiveMonths

Region 2011 2012 PercentIncrease

UnitedStates 151,564 184,396 21.7

Texas 26,174 31,540 20.5

Austin/SanMarcos 2,799 3,281 17.2

Dallas 3,900 4,961 27.2

FortWorth/Arlington 1,951 2,151 10.2

Houston 7,898 10,347 31.0Odessa/Midland 339 514 51.6

SanAntonio 1,668 2,014 20.7


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Total Texas Non-Farm Employment

Source: FederalReserveBankofDallas

6000

7000

8000

9000

10000

11000

Jan90

Jan92

Jan94

Jan96

Jan98

Jan00

Jan02

Jan04

Jan06

Jan08

Jan10

Jan12

Tho

usandsofWorkers


8/46

Job Growth Past 12 MonthsEnding June, 2012

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

El Paso

Tyler

Austin

HoustonSan Angelo

Corpus Christi

TexarkanaLaredo

Odessa

Source:TexasWorkforceCommission


9/46


0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

McAllen

Victoria

San Antonio

LubbockDallas

Longview

Amarillo

Fort Worth

Midland

Source:TexasWorkforceCommission


10/46


-3.0 -2.0 -1.0 0.0 1.0 2.0

Wichita Falls

Abilene

Killeen

Bryan/CS

Waco

Brownsville

Beaumont

Sherman

Source:Texas

Workforce

Commission


11/46

Employment Growth Rates

-6.0-5.0-4.0-3.0

-2.0-1.00.01.02.03.0

4.05.06.07.0

Feb-05

May-05

Aug-05

Nov-

05

Feb-06

May-06

Aug-06

Nov-

06

Feb-07

May-07

Aug-07

Nov-

07

Feb-08

May-08

Aug-08

Nov-

08

Feb-09

May-09

Aug-09

Nov-

09

Feb-10

May-10

Aug-10

Nov-

10

Feb-11

May-11

Aug-11

Nov-

11

Feb-12

May-12

U.S. Texas Austin


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Austin Round Rock San Marcos EmploymentIndustry June '12 June '11 %Change

Total Nonfarm 819,700 795,300 3.07%

Mining/Logging/Construct. 42,900 39,500 8.61%

Manufacturing 51,600 50,000 3.20%Wholesale Trade 43,900 42,000 4.52%

Retail Trade 82,700 84,400 -2.01%

Trans/Warehse/Util. 13,500 13,000 3.85%

Information 20,200 20,200 0.00%

Financial Activities 46,400 44,400 4.50%Prof./Bus.Serv. 125,400 116,800 7.36%

Education/Health 92,600 90,500 2.32%

Leisure/Hospitality 96,100 91,500 5.03%

Government 169,500 169,200 0.18%

Federal 12,500 12,100 3.31%State 70,800 71,800 -1.39%

Local 86,200 85,300 1.06%


13/46

Existing Home SalesAustin

0

500

1000

1500

2000

2500

3000

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2011

2010

Source: RealEstateCenter


14/46

Inventory of Unsold HomesAustin

1

2

3

4

5

6

7

8

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

M

onths


Jan.1997topresent


15/46


-6.0

-5.0-4.0

-3.0

-2.0

-1.0

0.01.0

2.0

3.0

4.0

5.0

Feb-05

May-05

Aug-

05

Nov-

05

Feb-06

May-06

Aug-

06

Nov-

06

Feb-07

May-07

Aug-

07

Nov-

07

Feb-08

May-08

Aug-

08

Nov-

08

Feb-09

May-09

Aug-

09

Nov-

09

Feb-10

May-10

Aug-

10

Nov-

10

Feb-11

May-11

Aug-

11

Nov-

11

Feb-12

May-12

U.S. Texas Dallas


16/46

Dallas Plano - Irving EmploymentIndustry June '12 June '11 %Change

Total Nonfarm 2,105,100 2,071,600 1.62%

Mining/Logging/Construct. 104,700 105,800 -1.04%

Manufacturing 166,600 167,900 -0.77%Wholesale Trade 120,800 119,800 0.83%

Retail Trade 211,400 207,500 1.88%


Information 64,900 65,100 -0.31%

Financial Activities 187,500 182,100 2.97%Prof./Bus.Serv. 357,700 352,000 1.62%



Government 269,100 268,500 0.22%

Federal 30,000 30,700 -2.28%State 38,900 37,700 3.18%

Local 200,200 200,100 0.05%


17/46

Existing Home SalesDallas

2000

2500

3000

3500

4000

4500

5000

5500

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2010


2011

2012


18/46

Inventory of Unsold HomesDallas

0

1

2

3

4

5

6

7

8

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Mont

hs

Source:

RealEstate

Center

Jan.1997topresent


19/46


-6.0-5.0-4.0-3.0

-2.0-1.00.01.02.03.0

4.05.06.0

Feb

-05

May-05

Aug

-05

Nov

-05

Feb

-06

May-06

Aug

-06

Nov

-06

Feb

-07

May-07

Aug

-07

Nov

-07

Feb

-08

May-08

Aug

-08

Nov

-08

Feb

-09

May-09

Aug

-09

Nov

-09

Feb

-10

May-10

Aug

-10

Nov

-10

Feb

-11

May-11

Aug

-11

Nov

-11

Feb

-12

May-12

U.S. Texas Houston


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Industry June '12 June'11 % Change

Total Nonfarm 2,686,000 2,601,000 3.27%


Manufacturing 237,200 228,200 3.94%

Wholesale Trade 139,600 136,500 2.27%

Retail Trade 279,600 269,800 3.63%


Information 31,200 31,900 -2.19%

Financial Activities 140,000 137,100 2.12%

Prof./Bus.Serv. 389,400 383,900 1.43%



Government 361,800 372,400 -2.85%

Federal 27,200 27,700 -1.81%

State 70,300 69,800 0.72%

Local 264,300 274,900 -3.86%

Houston Sugar Land - Baytown Employment


21/46

Existing Home SalesHouston

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2010

Source:

RealEstate

Center

2011

2012


22/46

Inventory of Unsold HomesHouston

0

1

2

3

4

5

6

7

8

9

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Months


Jan. 1997topresent


23/46


-6.0

-5.0-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

Feb-05

May-05

Aug-05

Nov-

05

Feb-06

May-06

Aug-06

Nov-

06

Feb-07

May-07

Aug-07

Nov-

07

Feb-08

May-08

Aug-08

Nov-

08

Feb-09

May-09

Aug-09

Nov-

09

Feb-10

May-10

Aug-10

Nov-

10

Feb-11

May-11

Aug-11

Nov-

11

Feb-12

May-12

U.S. Texas San Antonio


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San Antonio - New Braunfels EmploymentIndustry June '12 June '11 %Change

Total Nonfarm 872,500 862,000 1.22%


Manufacturing 46,700 45,900 1.74%Wholesale Trade 29,400 28,900 1.73%

Retail Trade 97,100 94,600 2.64%


Information 17,900 18,500 -3.24%

Financial Activities 70,500 69,800 1.00%Prof./Bus.Serv. 99,500 102,400 -2.83%



Government 158,300 161,700 -2.10%

Federal 36,200 35,800 1.12%State 18,700 19,100 -2.09%

Local 103,400 106,800 -3.18%


25/46

Existing Home SalesSan Antonio

500

1,000

1,500

2,000

2,500

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2010

Source:

RealEstate

Center

20112012


26/46

Inventory of Unsold HomesSan Antonio

0

1

2

3

4

5

6

7

8

9

10

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Months


Jan.1997topresent


27/46

Greenspanon

the

Economy

Thereisahugefiscalcliffouttherethatislargelyduetokicking

the

can

down

the

road.

Ourcurrent

Congress

is

unwillingtodoanythingtosolveourproblemsthatwill

cause

any

pain.

We

arent

goingto

get

out

of

this

mess

withoutsomepain.


28/46

Greenspanon

the

Economy

SimpsonBowles

will

get

passed.Theonlyquestionis

whetheritisbeforeorafter

abond

market

crisis.


29/46

TheFiscal

Cliff

StrokeofMidnight

January1,2013


30/46

TheFiscal

Cliff

Incometax

rates

increase

ObamaCare 3.8%profitstaxbegins

Capitalgainstaxfrom15to23.8%

Topdividend

rate

goes

from

15%

to

43.4%

Estatetaxrategoesfrom35%to55%

Estatetaxexemptiondropsfrom$5to$1million

Sequestrationresultsincutsindefensespending

Endof

the

employment

tax

reduction

Incometaxcomesbackonforeclosuredebtreduction


31/46

Personal Consumption Expenditures


32/46

Consumers Paying Down Debt

for First Time in 50 Years


33/46

Household Net Worth Recovering

After Stock Market Rally


34/46

Household Debt Service Paymentsas a Percent of Disposable Personal Income


35/46

Corporate Profits(With Inventory Valuation Adjustment & Capital Consumption Adjustment)

$200

$400

$600

$800

$1,000

$1,200$1,400

$1,600

Jan-90

Jan-92

Jan-94

Jan-96

Jan-98

Jan-00

Jan-02

Jan-04

Jan-06

Jan-08

Jan-10

Jan-12

Billions

Source:DepartmentofCommerce


36/46

NationalFederationofIndependentBusiness

Small Business OutlookPlanning To Hire People In The Next Three Months

-10

-5

0

5

10

15

20

25

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Net%of

Respondents


37/46

Q2-12 Q1-12 Q4-11 Q3-11

More Jobs 36% 42% 35% 36%

Less Jobs 20% 16% 24% 24%

Corporate Hiring Plans:Next 6 Months


38/46

Federal Government Employment


39/46

State Government Employment


40/46

Local Government Employment

Money Supply and Velocity:


41/46


Huge Monetary Base Could Fuel Inflation



42/46


Velocity at Historic Low Levels



43/46


Actual Money Supply Barely Increasing

Inflation Rate


44/46

Inflation Rate:

CPI Remains Low Despite Food/Fuel


45/46

Ten-year Treasury Rate


46/46

Conclusions Economytogoquietbetweennowandtheendofthe

year.

Worriesof

fiscal

cliff

and

debt

ceiling

will

dominate

the

headlinesthisfall.

Congresswilllikelykickthecaninto2013.

Interest

rates

could

continue

lower. Interestinrealestatehotandgettinghotter.

StrongUSdollarwillmakeoilcheaper.

Withcomprehensivetaxreform,theeconomycouldbesurprisingly

strong

in

2013.

Withoutit,2013willlookalotlike2012and2011.

texas - a&mpresentation

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