Waco To Emerge as 'Growth Center,' Says Baylor ProfOct. 13, 2000
by Alan Hunt
Predicting a "very favorable" Central Texas economic outlook, Baylor economist Dr. Tom Kelly believes Waco will emerge as a growth center that will "outshine" the national average and will exceed all but the largest metropolitan centers in the state of Texas.
Kelly, director of Baylor's Center for Business and Economic Research, was speaking at the 2001 Economic Forecast Conference presented Thursday by Baylor's Hankamer School of Business and the Waco Chamber of Commerce.
The Baylor professor said the so-called "new economy" appears to be ushering in a new era of prosperity. "But even as the economy continues to surpass expectations, there is little agreement among economists about the nature of the economy," he said. "Is it really a new economy or merely a very strong economy."
Dr. Ray Perryman, president of the Perryman Group, also offered a few thoughts on the "new" high-tech economy. "Whether or not a truly new economic paradigm has emerged in America is open to debate," he said. "What is undeniable, however, is the presence of powerful, unprecedented economic growth with technology at its center. The very best of the good news is that no end is in sight."
Perryman said productivity gains resulting from new technology are driving this new growth. "The reason is twofold-the rapid pace of technological change, and capital spending in the form of investment by businesses in new technologies."
He said as each company changes the way it does business because of new technology, other firms that are interacting with the new technology also change. "The ripple effect is going through every sector of the economy."
Kelly, who was presenting his annual Central Texas forecast, said the local labor market will remain "tight" as reflected by unemployment rates at or below four percent of the labor force.
"The Central Texas rate of inflation will exceed the national average as demands for housing and transportation become relatively more important," he said. "The rate of inflation in 2000 will average at least 3.5 percent, but the rate will decline to below 3 percent next year as higher energy prices stabilize and move slightly downward."
Kelly said growth in population will result in an average of about 700 new McLennan County households each year over the next five years. "Single-family housing will supply about 70 percent of the demand for new housing units while multi-unit housing will supply the remainder."
Discussing retail sales, Kelly said as baby boomers-moving closer to retirement-reassess their wealth, they are likely to slow their current "excessive" rates of consumption. "Also, the higher rate of inflation will put a damper on growth in consumer real purchasing power over the remainder of the year," he added.
In his manufacturing outlook, Kelly predicted Waco is on the verge of attracting new industries linked to the high technology sector, but he said the area will continue to be dominated by traditional industries.