By Suzanne Sprague, KERA 90.1 reporter
Dallas, TX – Suzanne Sprague, Reporter: There was a lot of shoulder-shrugging and head-scratching at yesterday's economic forum sponsored by the Greater Dallas Chamber of Commerce. Dallas Federal Reserve Bank President Robert McTeer headlined the event. He's like a local version of Alan Greenspan, so his analysis was guarded. But he's relying partly on anecdotal data to make sense of what's going on now.
Robert McTeer, President and CEO of the Federal Reserve Bank of Dallas: By anecdotal data, I mean well-established contacts you call on the telephone regularly and look through their answers for straws in the wind. The straws in the Texas wind suggest that the economic activity has weakened in the last few weeks.
Sprague: The "why's" of the local recession are easy to explain: the collapse of the telecomm industry, the effects of 9/11. But the "what nexts" are harder to predict. Bernard Weinstein directs the Center for Economic Development and Research at the University of North Texas.
Bernard Weinstein, Director, Center For Economic Development and Research, University of North Texas: All this uncertainty is being compounded by a threat of a war in the Middle East and incursion in Iraq. And it's very difficult with all the economic and political factors to make a judgment or a prediction about whether things are going to get better in the near term or worse. We just don't know.
Sprague: Weinstein says the most polite way to describe the North Texas economy is "soft." 36,000 jobs have been lost. Productivity has stalled. And, venture capitalism has all but evaporated. And yet, some sectors, like health care, continue to grow. Medical City Dallas Hospital president and CEO Britt Berrett believes hospitals have more than $1 billion for new construction in the pipeline.
Britt Berrett, President and CEO, Medical City Dallas Hospital: The funding is available through lower interest rates, but there's been an unmet demand and need that we've been holding off on for probably ten years.
Sprague: More hospitals mean more jobs. Barrett says maybe thousands in North Texas. He's sure Medical City will need at least 500 new healthcare workers in the next five years. And on the real estate front, Ebby Halliday President Mary Frances Burleson is bullish.
Mary Frances Burleson, President, Ebby Halliday: We're still having a very booming year. We're within 5% of where we were last year, which was a great year. And our average sales price is running about the same.
Sprague: The average sales price in the Dallas area is $176,000, up 6% from two years ago. Burleson is confident the market can maintain that growth, as long as interest rates stay low. And one analyst from computer giant EDS said when the telecomm industry rebounds, the Dallas economy will be primed to take off because so many skilled workers have remained in the area after their layoffs. But UNT's Bernard Weinstein offers a caveat.
Weinstein: Oh sure, I'm bullish for the future, but the future could be a long time coming. I think in the Metroplex we are looking for about 12 to 18 months of a sluggish economy, even if the national economy should do better next year.
Sprague: As one observer noted, conventional wisdom has changed from being cautiously optimistic to not-so-optimistically cautious. For KERA 90.1, I'm Suzanne Sprague.
To contact Suzanne Sprague, please send emails to ssprague@kera.org.