BOUNCING BACK

Dalias businessmen spend a lot of time patting one another on the back, marveling at the fact that although times have been a little tough lately in Dallas, our city’s mild recession can’t compare to the ravaging unemployment in other parts of the country. Detroit’s and Birmingham’s economies dipped into dangerous tailspins when automobile and steel production took a nosedive, but the Dallas/Fort Worth economy remained on a relatively even keel through the worst of the dollar’s doldrums.

Still, we shouldn’t naively congratulate ourselves on our economic good fortune, even though the figures support our optimism: Of the Department of Labor’s 233 Standard Metropolitan Statistical Areas, only 13 have lower unemployment rates than the 11-county metroplex, at 6.1 percent. And Dallas remains a less expensive place to live than most large cities. The latest Bureau of Labor Statistics survey, taken in 1981, shows that it cost $47,230 in New York City to purchase what $33,769 would buy in Dallas. The same amount of goods sold for $44,821 in Boston, $37,368 in Chicago and $38,516 in Los Angeles.

Dallas/Fort Worth’s incredible growth as a location for corporate national headquarters has served as a stabilizing force throughout the recession. At present, Dallas trails only New York City and Chicago in the number of big-business homesteads. Dallas’ lack of state, corporate and local personal income taxes, the city’s low property taxes and its reputation for cooperation between business and political leaders has brought a tremendous variety of corporate giants to the city. Caltex, which produces petroleum, and General Portland, the world’s second largest cement company, are two of Dallas’ newest corporate big shots. Other companies that have grown up here have attained international stature, among them Haggar Co., Frito-Lay Inc., Trailways Inc., Texas Instruments Inc., Sedco Inc., Dresser Industries and Dr Pepper Co.

These various powers are not dependent on Texas’ volatile natural resource, crude oil. Instead, they give Dallas the broad financial base that she can thank for her stability. Local economists speculate that this same range of interests will keep Dallas on her feet and help the city toward a speedy recovery from the slump she experienced. Dr. William Gibson, chief economist for Dallas RepublicBank Corp., says that Dallas and Fort Worth can be expected to lead the state and possibly the nation out of the recession.

The Texas Employment Commission divides our local economy into eight general employment categories. Our 1983 Business Guide will examine each category and tally its effect on the local business landscape.



WHOLESALE/RETAIL TRADE



A little more than one-fourth of the area’s economic pie consists of wholesale and retail trade. Twenty-seven percent of Dallas-area employment (about one out of every 15 jobs in the state) falls into this healthy category.

Many of those jobs come from Dallas’ wholesale/retail capital, the Market Center, which is the largest wholesale merchandising mart in the world. The January Winter Home Furnishings Show drew representatives from all 50 states and from 28 foreign countries. An indirect reflection of the prosperity of the Market Center is the Federal Reserve’s measure of department store sales, up 1 percent in December 1982 from sales in 1981. The Commerce Department reported that the retail sale of nondurable goods (items that are not designed to last more than three years) rose 4 percent nationwide.

Dallas-based Southland Corp., which owns 7,300 7-Eleven stores, devised its own method of prospering during the recession. In addition to selling items such as milk and bread, Southland’s stores began selling gasoline. In 1982, gasoline sales accounted for a whopping 25.3 percent of 7-Eleven’s total sales. That’s 1.15 billion gallons of gasoline from “Oh Thank Heaven,” about 1 percent of the U.S. market.

Although Southland president Jere Thompson says otherwise, industry analysts say that Southland intends to become a major oil company. A multimillion dollar deal with Occidental Petroleum, in which Southland acquired the marketing and refining arms of Cities Service Co., seems to support analysts’ speculations.

Of the automobiles sold in the Dallas area during the past year (February 1982-1983), 71 percent were domestic models. Sales were up 6 percent, a gain largely attributed to falling interest rates and growing consumer confidence that the worst of the recession is over.



MANUFACTURING



Almost 20 percent of people employed in Dallas/Fort Worth rely on manufacturing for their incomes. With employment down 5.5 percent in this category, production-related jobs have been the hardest hit by the recession. The good news is that the tide is turning: Nationwide, 43 percent of industrial corporations increased production in March, the largest gain for any month since May 1977.

The Reagan administration is planning an unprecedented increase in defense spending. Consequently, Dallas/Fort Worth, which is rich in military personnel, research facilities and production plants, stands to receive a powerful injection of federal money for manufacturing contracts. High-technology manufacturing can also be expected to provide the area with a number of new jobs, according to forecasts by Data Resources Inc., a Massachusetts-based research firm.

Big beneficiaries of increased military funding will be Dallas-based Texas Instruments Inc. and General Dynamics Corp., Fort Worth’s builder of F-16 jets. The change for the better should become apparent late this year, says Thomas R. Plaut, a social science researcher with the University of Texas at Austin. He predicts an increase in new investments in Dallas/Fort Worth because of the relatively higher profitability of producing. New investment money will come from computers, electronics and defense-related activities, Plaut says.

Along with these newer industries will come a local revival of automobile assembly and wood, metal and electronics production. This increased production should occur as interest rates drop and energy costs strengthen the spending capacities of individuals and corporations.



SERVICES



This very broad category accounts for 19.4 percent of employment in the Dallas area and includes hotels, medical and legal services, auto repair businesses, amusement facilities, restaurants, data processing firms and fast-food emporiums, as well as tourism.

Dallas draws more than 1.7 million conventioneers and more than two million tourists annually. (More than three million people visit the State Fair alone.) Six Flags Over Texas has become the state’s number one tourist attraction, replacing the Alamo in San Antonio. All of these tourist attractions have strengthened the service economy, but the hotel business has seen the most recent boom in the service industries. The Registry Hotel recently opened in far North Dallas, employing between 80 and 100 chefs in three kitchens. The Registry eventually expects to employ a total of 1,000 people. Cash rebates, free cars and half-price rooms have cut into profits during Dallas’ hotel price war, but the Loews Anatole Hotel is going ahead with an addition that will bring its number of rooms to 1,620.

Although it is the lowest-paying of this survey’s categories, the service industries have remained a thriving source of employment through the darkest months of the recession. As conditions improve, services should continue to hum along.



GOVERNME



Like death and taxes, some people may lament, government will always be with us. But, surprisingly, it’s likely that there will be less and less of it in future years. Government now accounts for l1.8 percent of Dallas/Fort Worth employment, but economists predict that attrition will make for fewer government employees in years to come.

“Historically,” says Don Johnstone of the Texas Employment Commission (TEC), “government has been a stable area; but in recent years nothing has been immune [to the effects of the suffering na-tional economy].” Johnstone says that only half as many employees are now working in the Dallas-area TEC offices as in 1977.

Besides the much-maligned bureaucrats, other government workers such as police, firefighters, road-repair workmen and teachers face uncertain futures because of increased competition in their fields from private businesses.



FINANCE/REAL ESTATE/ INSURANCE



Only 7.6 percent of Dallas-area workers are employed in this category, but one look at the Dallas skyline will indicate the importance of real estate to the city’s economy. The business of the 243 insurance company home offices in Dallas/Fort Worth and the 139 banks in Dallas County – including the two largest in the South-west-affects every facet of our economy.

Ron Witten, president of M/PF Research Inc. and a Dallas housing market analyst, says that the housing industry set all-time highs during the fourth quarter of 1982 and the first two months of 1983. Witten says that traditionally, “housing has led the economy out of the recession. We’re seeing a textbook example of that right now.”

Obviously, times are better now for the housing market. In March, the prime rate was down from 16.5 percent last year to 10.5 percent. The effective interest rate for conventional mortgages was 12.9 percent, down from 17.5 percent. New-car loans were also down, from 17.92 percent to 16.24 percent.

Analysts have told us all along that the way to cure recession is for people to spend more -advice similar to telling a drowning man to get out of the water. Now, however, lower interest rates have accomplished what the spend-and-spend-more urgings could not. The Dallas Morning News reports that “hordes of new home buyers” are descending on savings and loan associations and mortgage companies.

“Thrift institutions have taken on significant amounts of interest-bearing savings and checking accounts,” says Repub-licBank’s William Gibson. Clifton W. Cassidy Jr., chairman of Richardson Savings and Loan, says: “It’s just a question of how long the financial markets can finance the deficit of the federal government and the expanding economy. The two are on a collision course.”



TRANSPORTATION/ PUBLIC UTILITIES



Last year, employment decreased in this category, as in manufacturing. Only 6 percent of Dallas-area employment is in the transportation industry or public utilities.

Braniff International couldn’t find a way to get the airline back on its feet, and it’s been a grim year for the airline’s former employees. Utility company executives who were at first disturbed by Gov. Mark White’s promises to “do something” about high utility bills apparently have little to fear. White’s appointees to the Public Utilities Commission have shown little hostility toward the industry.

But some good has come to the industry -at least in the transportation end. American Airlines’ passenger miles registered an 11 percent gain in 1982, thanks to the demise of Braniff. In March 1983, American reported a 21.5 percent rise in traffic, the highest for the month of March in 20 years. American boarded 56.4 percent of all D/FW passengers in 1982; by the end of the year, after Braniff ceased to fly, American was transporting 49 percent of the airport’s landed weights.

D/FW airport serves 30 airlines, handles more than 1,200 daily arrivals and departures and is fifth nationwide in total number of air passengers.



CONSTRUCTION



Construction now accounts for 5.4 percent of Dallas-area employment, and more new jobs can be anticipated as lower interest rates encourage additional building. It’s hard to look around Dallas and believe that the building boom is just beginning, but more construction permits were issued during January-February 1983 than in any previous two-month period on record.

Most of the construction permits were for apartments and single-family houses, while the number of permits for condominiums and town houses fell slightly. An increasing number of single-family houses under construction further indicates an economic revival fueled by the broad-based middle class.

With the exception of office building construction, this industry looks optimistic across the board. In January 1983, building permits for new shopping centers came to a dollar figure almost 100 percent higher than the peak month of 1982.

MINING



Most Texans assume you’re speaking of oil when you mention extraction or mining. But even though several large oil companies are headquartered in the Dallas area, only 2 percent of our population is employed in the mining industry.

It may be just as well that so few people are employed in the oil industry because the news in this area is not bright. Although many of us celebrate sinking petroleum prices, the industry does not. The price of a barrel of Mid East oil was down to $29 in March from $34 the previous year. Speculators believe prices will con-tinue to drop.

Gasoline prices dropped almost 13 cents per gallon during the eight-month period that ended in February; prices are expected to continue the downward spiral.

It might be better to look at the brighter side of the bad news: Although this is a poor time to be sinking drills, it’s an excellent time to acquire leases for the future, says one independent oilman.

An interesting company in this category is the Dallas-based National Mint, which will soon become the first American company to market a gold piece nationwide. The gold piece will be available through private banks and will compete with South Africa’s Krugerrand and Canada’s Maple Leaf. National Mint president Tom Taylor expects his enterprise to provide new employment in refining, marketing, minting, shipping and accounting.