Monday, September 25, 2023 Sep 25, 2023
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Life isn’t getting any cheaper-or easier. But with this economic rundown, at least it can be less confusing.
By Robert Schwaller |

Costs are going up on every thing in the Metroplex, and Business Review ’85 tells you how much, on what and where. We rank the top 100 public companies and take a look at a real estate broker you know from another role. We also profile entrepreneurs and new bankers, and rank developers and employers.

Economists like to conjure up wild-card occurrences that could throw the best predictions out the window. Scary things, like a revolution in Mexico that would send waves of refugees across the Rio Grande. Big things like an announcement that Ross Perot will win the Satum Project to design GM’s space-age cars. But barring any of that, we’ve peeked into the economic future of Dallas/Fort Worth and here’s how it lines up.

First let’s take a look at where we are; what things cost in Dallas compared with the rest of the U.S. The local consumer price index tracks the increase in prices in the Metroplex, and compares it to national trends. The index shows how prices have increased from winter ’84 to ’85. Over that 12 months, inflation cooled across the country, and slightly more so here. In Dallas/Fort Worth, groceries are a somewhat better deal, but eating out is still no bargain. The average dinner tab in the Metroplex is up 5 percent, compared to 4 percent across the rest of the country.

The computers told us another item we already suspected. Entertainment has gone up 9 percent in the Metroplex, compared to 4 percent elsewhere.

Apartment rental costs are going up slowly, too. The average Dallas apartment now goes for $429 a month, not including electricity. Fort Worth apartment costs $377. Buying a house here is cheaper, too. Prices are up only half as far as the rest of the country.

The biggest factor in our economy is the influx of new residents. The estimates vary, but even the most modest predictions are daunting. In 1984 we absorbed 62,000 newcomers. That’s the size of Carrollton. And we’ll do it again this year, with 5,000 souls left over. Next year, if the trend continues, 76,000 outsiders will call Dallas/Fort Worth home. That’s like building another Hurst/Euless/Bedford.

Where will they live? Actually everywhere, but the most significant growth should be in the Mid-Cities: Grand Prairie, Arlington, north in H-E-B and south in Cedar Hill, De Soto and Duncanville. They’ll continue to settle in Far North Dallas along Interstate 45.

Fort Worth has fewer options. Land to the east is almost fully developed and the flight paths around Carswell Air Force Base to the west prevent any large number of new housing there. So builders are looking to the southwest, laying out houses as far out as Crowley.

This kind of population growth tends to generate its own employment. Companies hire people to feed, shelter and clothe the new residents. But that’s not enough to give them all work. Statistics indicate that, in 1984, the Metroplex added about 70,000 new jobs. But the growth this year will be more like 50,000 new jobs, with even fewer openings in ’86.

Most of the slowdown comes from manufacturers. The percent of workers on assembly lines, in machine shops and in bottling plants has already dropped from a quarter of the total work force in the early Seventies to a fifth. Manufacturing, with about 351,000 jobs, is the third largest part of the job market pie.

The service sector-the people that fly you around, fix your air conditioner, your car and your teeth, draw up your will and draw down your checking account-is the second largest segment. It accounts for 370,000 jobs (another fifth of total employment). But the dominant chunk of jobs is trade-nearly 500,000.

One factor that affects the rest of Texas, but not us to any great extent, is the price of a barrel of oil. While employment, construction and the general level of euphoria in Houston is directly related to this vital statistic, the Dallas area tends to rise above the economics of the oil patch. Only a moderate number of white-collar jobs in finance and administration depend indirectly on oil.

The major impact of oil is through state revenues, or rather the lack of them as the oil-related state income drops off with sliding prices. In a good year, the state rakes in almost S3 billion in oil-related revenues. In a bad year, that figure falls. Any pinching in Austin is bound to be felt locally, in the fonn of fewer dollars for schools, roads and health facilities. And there’s the pressure to come up with the money in other ways, such as an increase in the state sales tax, or the large increases in college tuition.

A more important indicator of health for the metroplex employment is the general state of the electronics and defense industries. The biggest reason for the decay in growth of manufacturing jobs is excess inventories in electronics. Texas Instruments and Apple have pared down their workforces in past months until demand for semiconductors and other electronic components makes it necessary for them to crank up production again. The technicians amount to about 8 percent of the total workforce.

In the longer term, the military spending of the United States and foreign governments shows little sign of abating. That speaks well, if not for foreign policy, for jobs at Texas Instruments, Rockwell International’s Richardson plant, Bell Helicopter and General Dynamics. So far, defense contracts awarded to Dallas have increased 23 percent over 1984. Dallas-based companies and plants were working $13.5 billion in Pentagon contracts. Though translation into job numbers is difficult, defense is a continually growing part of the Metroplex economy.

Anticipating the continual flow of newcomers, developers are overbuilding. In 1984, builders started $1.6 billion in office space, and $406.7 million worth of strip shopping centers and malls started construction last year. In 1983 the total was $257 million. Most future construction will be in the small neighborhood strip centers.

Over the next few years it will be easier to find a roof over your head, if not cheaper. At least into last winter, apartment builders showed little sign of slowing down. Bad news for landlords; good news for you. With the scales tipped in your favor, it’s time to think about a new lease. We could see some of the free rent, microwaves and other enticements that landlords in other cities have used.

And houses are likely to be a good bargain in coming years. All that hinges on interest rates, of course, which are as unpredictable as ever. Although the prime rate hovered at 10.5 percent for January through April, economists say there’s pressure for it to go up. It could be steeper by the time this ink dries. But that considered, homebuilders are still likely to be more anxious to sell you a house this summer than in months past because buying has leveled off. During the last half of ’84, the regular increases in home purchases stopped.

But the real good news is that it hasn’tslowed builders much. And the companiesthat develop lots to build houses on have onlyrecently slackened their activity. Clearly,there’ll be plenty of houses and builders evenmore willing to negotiate.

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