Greater Dallas Chamber board member John Ware, President and CEO of 21st Century Group LLC, moderated a discussion of 2005 economic performance with four local economists at the Chamber’s May Economic Update. The panelists benchmarked current performance against Economy.com’s projections for 2005 at the national, state and local levels. With varying insights and perspectives, the discussion produced mixed reviews of current and anticipated performance for the nation, state and local area. The one common denominator among the panelists was that the economy continues to expand at all levels, despite some early to mid-year slowing in growth.
Panelist Jeanette Rice, Vice President of Market Research for Crescent Real Estate Equities, opened the discussion with a review of Economy.com’s projections for 2005, as presented below. Rice noted that this year brings many challenges commonly encountered in the expansionary phase of a business cycle, such as rising interest rates and deficits, churn in employment markets, and weaknesses in selected industries. However, this cycle also has several unique challenges. Rice identified the most significant new pressures as the nation’s situation in Iraq, terrorism and homeland security, and enormous consumer debt.
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Economy.com 2005 Forecast
Dated December 2004
| Year End Total |
USA (thousands) |
Texas (thousands) |
DFW (thousands) |
| Total Population |
296,214.3 |
22,762.7 |
5,843.8 |
| Total Employment |
133,540.5 |
9,640.6 |
2,747.8 |
| Real Gross Product |
$11,220 billion |
$776 billion |
$265 billion |
| Annual Number Change |
USA (thousands) |
Texas (thousands) |
DFW (thousands) |
| Total Population |
2,713.0 |
323.4 |
110.2 |
| Total Employment |
2,262.6 |
188.3 |
57.6 |
| Real Gross Product |
$375.4 billion |
$28.2 billion |
$10.4 billion |
| Annual Percent Change |
USA |
Texas |
DFW |
| Total Population |
0.9% |
1.4% |
1.9% |
| Total Employment |
1.7% |
2.0% |
2.1% |
| Real Gross Product |
3.5% |
3.8% |
4.1% | |
Harvey Rosenblum, Executive Vice President at the Federal Reserve Bank of Dallas, followed with an overview of national economic performance. Rosenblum called for real GDP growth in the U.S. as forecasted by Economy.com at 3.5 percent in 2005. Citing high energy prices, reduced monetary stimulus and slowed growth abroad, Rosenblum noted that this projection is below the “spectacular” performance in 2004 but is still a “darn good” rate of growth.
Texas is also likely to track Economy.com’s 2005 forecast according to Mine Yucel, Vice President & Senior Economist at the Federal Reserve Bank of Dallas. Contrary to history, the state has both under performed the nation throughout the recent business cycle and is no longer an unequivocal beneficiary of high oil and gas prices. Thus, Texas is off to a relatively slow start in 2005. Yucel believes, however, that the state’s economic recovery is both broad-based and strong enough to push performance upwards by year end.
Bernard Weinstein, Director of the University of North Texas Center for Economic Development and Research, focused on long-run performance in the local economy. Dallas/Fort Worth has been the standout growth metro in recent times, ranking first in population and fourth for employment growth rates between 1990 and 2004. Looking forward, Weinstein sees continued expansion in the region but with both demographic and spatial challenges. Foremost among his concerns are educational attainment among new immigrants and local residents as well as the performance of the central city of Dallas relative to the remainder of the region.
In summary, then, local experts see the national economy cooling somewhat from the heady performance of 2004 but still performing at a healthy rate of growth. Texas, on the other hand, is on an upward trajectory, expected to meet year end projections despite a relatively slow start to the year. When asked whether DFW would meet the 2.1 percent job growth forecasted for 2005, Weinstein replied, “I certainly hope so.”