THE DALLAS ECONOMY: CAN IT STAY HEALTHY?

During the 1973-1974 economic slump, Business Week and the New York Times sought out Dallas and Fort Worth business leaders to determine the extent of the damage Here. To their surprise, they found there wasn’t any. Two years later, both publications featured extensive coverage of what they called “the Sunbelt phenomenon,” a result of discovering what Dallas and Fort Worth residents already knew: that the business and financial communities of the region are quite healthy.

From 1960 to 1970, the population of Texas increased from 9.5 million to 11.2 million, a rise of 17.9 percent; immigration accounted for about nine percent of the gain. In the next seven years, the population increased to 12.8 million, adding as many people as in the 10 years preceding 1970. Forty-seven percent of that increase came from immigration. Dallas/Fort Worth got more than its fair share of the newcomers: Its population increase was 16 percent higher than the state-wide average.

Much of this growth came about because of the relocation of corporations from the North and Northeast, and because of the expansion of companies already located here. In 1971, there were 789 companies in Dallas and Fort Worth with net worths of more than $1 million, according to Dun & Bradstreet. By 1978, there were 1063.

The Dallas/Fort Worth area ranks third in the nation in number of major corporate headquarters, and it’s rapidly gaining on number two Chicago. Between 1971 and 1977, 75 companies relocated here, including seven of the nation’s largest – among them The Associates, National Gypsum, and American Airlines. Another 300 new plants were built here. Consequently, unemployment remained well below the national average. Even in the leanest year of the decade, 1975, unemployment here peaked at just over five percent, while the national rate climbed to more than nine percent. Personal income rose from $4053 per capita in 1969 to $7096 in 1978 – well over the national average of $3733 in 1969 and $6396 in 1978. While inflation was sapping those income gains, the consumer price index, using 1967 as a base point of 100, rose to 188.3 for the U.S. as a whole, while here it rose to only 186.7.

The buying power of residents of the area rose to $17.9 billion – tenth in the nation – by 1977. Banking and finance consequently grew steadily. Deposits in local banks increased by just over $14.2 billion during the Seventies. Bank acquisitions and expansion made for an even more dramatic increase in capital formation: There are more than 200 commercial banks in the area with total resources of more than $22 billion, an increase of more than $4 billion in just over two years. Retail sales reached more than $10 billion in 1977, providing almost 11 percent of the total of the region’s economic sources.

The most striking event in the economic history of the region was the opening of the Dallas/Fort Worth Airport in January 1974. DFW is the engine that drives the region’s economy. The airport alone represents more than $1.5 billion in salaries, wages, and direct and indirect expenditures. From DFW, no major city in the country is more than two and a half hours away. With the addition of routes to London, Western Europe, South and Central America, the Pacific, and soon Hong Kong and Japan, most foreign cities will be less than 14 hours away. The largest airport in the country is now the third-busiest in the world, with more than 10 million passengers boarding planes in 1978, and nearly 1200 landings and takeoffs per day. Cargo flights carried almost 100,000 tons in 1978.

Eventually, the airport will have 13 terminals with 234 gates, and be capable of handling 200 all-jet cargo planes simultaneously. The Foreign Trade Zone of 250 acres, currently under construction, will be the largest in the U.S. and will have full rail, highway, and air access.



At the North Texas Commission, we naturally take pride in such exciting growth, but our job is also to foresee the problems consequent on rapid expansion. The specter of inflation looms for everyone, and because of our emerging status, we stand to suffer from it more than the industrial North. A study by Coldwell Banker Commercial Brokerage Co. indicates that 42 percent of Dallas County’s industrial space is now used for manufacturing, rather than distribution or wholesale, which is certain to make us more vulnerable to recession. International trade is particularly important for our region. We have begun to study its economic impact. There are more than 1700 companies within the 11-county, 8360-square-mile Standard Metropolitan Statistical Area of Dallas/Fort Worth. We believe that one-fourth of them may be directly involved in importing and exporting, with another two-thirds indirectly involved in international commerce.

The impact of corporate relocation also merits closer study. The relocation of, say, American Airlines is a dramatic event, but as other major American cities experience resurgences, the competition for major corporate relocation becomes more intense.

Other concerns include mass transit – particularly difficult in a region with low population density – and energy, problems which are intimately related.

The region led the nation in home-building last year, with more than 47,000 new houses, valued at $1.6 billion, a 30-percent increase over the previous year. But increased homebuilding also brings increased concern over land use, environmental standards, and availability of water.

Although the industrial vacancy rate in Dallas County is currently a healthy five percent, the current boom in commercial real estate raises fears of over-building. The growth of corporations leads to a demand for a larger labor force.

The greatest test of the economy of Dallas and Fort Worth will be that of our ability to plan and execute with the same success that we have had in the past.

– Worth BlakePresident, North Texas Commission