Victoria County's economic growth among top 10 in nation
Sept. 22, 2013 at 4:22 a.m.
Updated Sept. 23, 2013 at 4:23 a.m.
Economists credit the Eagle Ford Shale - and all that has trickled down from it - as the catalyst for development in Victoria.
The county was named one of the top 10 metro areas in the nation to see growth in gross domestic product, according to data released last week from the U.S. Bureau of Economic Analysis.
Gross domestic product rose 8.7 percent last year in Victoria. The national average increased 2.5 percent.
The data, however, does not report specifically where the growth came from because some information was suppressed to protect company privacy, said Thomas Dail, spokesman for the U.S. Department of Commerce.
Professional and business services, education and health services, leisure and hospitality and government were the only categories for which information was shown and collectively account for 1.35 percent of the growth, according to the data.
The analysis does not show how natural resources and durable and nondurable good manufacturing play into the growth seen in the area, but Randy Vivian, Victoria Chamber of Commerce president, said exact numbers aren't needed to see petrochemical plants are expanding and the Eagle Ford Shale is exploding in the community.
Development of oil and natural gas in the Eagle Ford Shale added more than $61 billion in revenue in South Texas in 2012 and supported 116,000 jobs, according to a study released by the Center for Community and Business Research, which is hosted by the University of Texas at San Antonio.
The study focused on 14 producing counties most active in the Eagle Ford Shale development area and six adjacent counties, which includes Victoria.
Victoria County saw a direct economic impact of more than $18 million and an indirect impact of more than $130 million in 2012, according to the study.
The study concluded that Eagle Ford Shale development will generate a total output of $190 million in Victoria by 2022 and will support an additional 671 jobs.
Of the areas not seeing growth in Victoria, government declined .05 of a percent in 2012.
Government has declined in most areas because of federal budget cuts, the reduction in state spending and resulting pressures on local government, said Ray Perryman, president and chief executive officer of The Perryman Group.
"In the future, governments will need to find resources for highways, water, improvements in education and other key areas," Perryman said. "The growth in other areas will typically occur over time in response to population growth and strength in other sectors."
By 2015, Victoria County's population is expected to exceed 94,000 people.
In connection with that growth, Vivian said an influx of housing, new restaurants, motels and stores are coming to Victoria. Leisure and hospitality rose .20 of a percent in 2012, according to data.
"You see more people employed, and there is more disposable income," Vivian said. "But we need to continue to diversify our economy because Eagle Ford isn't going to last forever."
Perryman, who is also a distinguished professor of economic theory and method at the International Institute for Advanced Studies, said generally, growth is very good for the area, but it also creates challenges when it occurs rapidly.
"Keeping up with housing demand, infrastructure needs and other requirements of a growing area can cause temporary dislocations," Perryman said. "Communities generally perform best when they have a balance of growth."
According to Apartment Market Data Research Services, a one-bedroom unit in Victoria averages between .78 cents per square foot to more than $1.38, depending on the year the apartment was built. Several apartment complexes in Victoria have waiting lists for incoming tenants.
Since 1970, the population in Victoria has grown by more than 50 percent, from 41,349 people to 62,592 people in 2010, with the biggest population shift between the 1970s and 1980s, according to census data.
Vivian said if the city is going to continue to grow at this rate, it is imperative that the city begins to diversify its economy by bringing in new business.
The city, Vivian said, has new businesses wanting to expand in the area, but what it needs is the workers.
"We need more individuals to move to Victoria because we have those jobs here," he said. "We need to make sure we have good, strong economy jobs to transition those workers who chose to stay in the area," once the Eagle Ford Shale dries up, he said. To do that, "we need to continue to strengthen our existing companies and recruit new business in."