Economist forecasts strong future for Crossroads
June 28, 2012 at 1:28 a.m.
Updated June 29, 2012 at 1:29 a.m.
Texas is heading in the right direction, and has been for a while, largely because of its ability to plug into the global market.
"It is truly a global economy," said Jesse Thompson, a business economist with the Houston office of the Federal Reserve Branch of Dallas. "It's all interconnected."
Thompson spoke Thursday at the Victoria Economic Development Corp.'s semi-annual meeting. There, he updated attendees on the state's economy and Eagle Ford Shale's impact on the region.
Texas is blessed by the location of its shales, Thompson said. While some places such as China have an abundance of shale, but no easy way to access it, the Lone Star State's supply sits near rail lines and the like.
He said drilling will continue as a source of growth for the region. Horizontal drilling is replacing other methods, he explained, meaning other people are tied to this region via royalties, consulting fees and so on.
Still, he said new methods of transporting oil from the Permian Basin to the Gulf would help. Cushing, Okla., takes on so much inventory now that oil sometimes sells at a $10 to $20 discount.
The Texas Gulf Coast region likely will see an influx of heavy construction projects through the next 10 years, Thompson said, as countries look to build plastics plants near ethane production.
"When those temporary construction jobs are gone, they will leave in their wake thousands of high-skilled labor jobs," he said, noting that meant high human capital individuals, as well as improved property values and tax revenues.
Thompson also touched on other economic issues for Victoria, noting that drilling projects, the new Caterpillar plant and spillover from other industries lowered the unemployment rate.
Last year's fourth quarter brought an increase in natural resources and mining jobs, he said, as well as manufacturing and professional business services.
"Contribution to wages is across multiple sectors," Thompson said. "It's not just people pulling stuff out of the ground. There are other high-skilled people contributing to the economy."
State Rep. Geanie Morrison, who attended Thursday's event, said she appreciated Thompson looking not only at Texas's economy, but specifically at Victoria.
"He showed us what wonderful things are happening here and the industries that are expanding," she said. "It looks very good for the future."
Those good things affect other facets of life in Victoria, said Larry Clark, property and leasing manager for Victoria Tower. As vice president of the Victoria Main Street Program, he said he was glad for the update.
"Good things are happening everywhere," he said.