Texas Weathers Downturn Well

The Texas economy, like many other states, has taken its share of lumps over the past 18 months. The telecom and information technology sectors have been hurt, particularly in the Dallas area. One well-known figure in the Texas corporate real estate world says tough times bring out the best in strong companies.

Roger Staubach, chairman and CEO of The Staubach Company

        Roger Staubach, chairman and CEO of The Staubach Company, a Dallas-based global tenant representation specialist, says his company has stressed client loyalty during tough economic times.
        "You discover the best in people when times are tough," he says. "Our customer base, especially in the telecom industry, has been slammed. We've got to be there in the foxhole with them even though it's not glamorous and not as rewarding. We will do what it takes to creatively lower their costs. There's not great compensation in this, but many of these customers trusted us when we were growing and we're sticking with them. Companies are becoming more efficient and that could mean downsizing."
        Jay Ballou, senior vice president at Dallas-based Workplace USA, says the souring economy of the past year and the "tech-wreck" which has hurt IT centers such as Austin notwithstanding, Texas has some inherent advantages which help mitigate downturns. These include favorable wage rates, no state personal income tax, low energy costs and affordable housing.
        In her September report on the Texas economy, Carole Keeton Rylander, Texas Comptroller of Public Accounts, says her state is poised for a rebound. She cites the state's central Sunbelt location, relatively low business and housing costs and a continued influx of new residents. But despite this resilience, the state lost 107,300 non-farm jobs during the year-long period ending July 1, 2002.
        "Over the next two years, the state's manufacturing sectors should improve as national and worldwide demand for computers, semiconductors and other high-tech products rebuilds," Rylander says. "Overall, manufacturing employment will decline by 4.1 percent in 2002 as the high-tech downturn and national recession play out."
        But Rylander's forecast for 2003 is better, calling for a 2.4 percent hike in job growth, which would be Texas' best manufacturing growth year since 1997.
        The state's demographic profile has changed considerably over the last decade. U.S. Census Bureau information released last spring shows the number of foreign-born Texas residents increased by 90 percent from 1990 to 2000, rising from 1.5 million to 2.9 million. Among the foreign-born population, 75 percent were born in Latin America, 16 percent were from Asia, 5 percent from Europe and 4 percent from elsewhere.