Bright skies for region’s economy
Published 4:07 pm Monday, January 21, 2019
By Ken Stickney
BEAUMONT — Southeast Texas’ economy should fare well in 2019, with no indications of doom for the state or region.
That’s what Patrick Jankowski, senior vice president for the Greater Houston Partnership, suggested to the Regional Economic Development Initiative’s economic forecast breakfast. He even suggested, in so many words, that that the only fear is fear itself.
“I’m worried about all the talk about imminent recession becoming a self-fulfilling prophecy,” he said. “People may sit on their hands, spark a downturn.”
But there’s no apparent need for that, not in these parts.
Jankowski said all indicators suggest success and more success, both for Texas and for Southeast Texas. No event has occurred to “trigger” a recession: No interest rate hikes, no stock market crashes, no stresses on financial institutions.
“Right now, business is expanding and people are getting hired,” he said. Unemployment is falling — nationally, it’s 3.9 percent — and “it has gotten a lot easier to find work out there,” he said.
People are paying their debts, credit card payments are “OK” and delinquencies on business loans are low, he said.
Jankowski said he’s been through five economic downturns. This doesn’t look like one of them.
He said people fear recession after long stretches of prosperity. They are looking for a down cycle after long periods of expansion. He said the “tech boom” of the 1990s lasted 120 months; the current economic expansion has lasted 114.
He also quoted Janet Yellen, former chairwoman of the Federal Reserve System’s board, who said, “Expansions don’t die of old age.”
In fact, Jankowski said, the industrial expansion hasn’t been going on for long — slightly more than a year. And ours is an industrial region.
The Texas economy remains robust, he said. The business climate is good, with steady increases in employment — Texas and California lead the nation in job creation — and a demand for employees. Crude oil prices slipped below $50 a barrel — a benchmark for profitability — but are rebounding and West Texas drillers are committed to remain for several years.
Manufacturing is steady; statewide, retail remains a plus and should be prosperous in 2019, Jankowski said.
Here in Southeast Texas, Gross Domestic Product slipped due to a recovery period from Hurricane and Tropical Storm Harvey. But the promise of two more liquefied natural gas plants coming on line is a boon for the area.
So are expansion projects at Total — they broke ground on an ethane cracker this year — Valero and Motiva.
How important is that?
“When you invest $1.7 billion in a plant, you’re unlikely to pick it up and move to Mexico,” Jankowski said. Investments made now may half impacts that last a half-century, he said.
“I see nothing but good things, nothing but growth,” for the U.S., Texas and Beaumont, he said of this year.
