The Texas economy continues to outperform that of the nation, according to Waco-based economist Ray Perryman.
But Perryman warns problems could occur if state leaders fail to adequately invest in education, water, highways “and other key requirements for long-term success.”
He also offered his viewpoint about the national economic situation.
“There are many positive signs in the economy at the present time, and the rise in the stock market suggests a lot of long-term optimism,” said Perryman, president and CEO of The Perryman Group, which is involved in economic research and analysis
“However, the unstable nature of the government budgeting process and other avoidable conditions, such as default threats, continue to stifle short-term momentum.”
Perryman will be one of the speakers Tuesday at the 2014 Economic Forecast Luncheon, sponsored by Baylor University and the Greater Waco Chamber of Commerce.
He will join Tom Kelly, director of the Baylor Center for Business and Economic Research, in discussing local, state and national trends.
James Shelton, chief investment officer at Kanaly Trust in Houston with about 20 years experience in the investment industry, will focus on the markets.
“Locally, we’re in better shape than we were a year ago,” said Kelly, who has prepared economic forecasts for the Central Texas economy since the early 1980s.
He said construction of Baylor’s new $260 million football stadium on Lake Brazos continues to create economic ripples, as does conversion of 340,000 square feet in the old General Tire plant at Highway 77 and Orchard Lane into the Baylor Research and Innovation Collaborative.
BRIC will create the opportunity for researchers and representatives of business and industry to work together on job-generating projects.
Meanwhile, work begins this month on Baylor’s $100 million Foster Campus for Business and Innovation complex on Bagby Avenue, between Third and Fourth streets.
Kelly said he will discuss factors that could impact the area economy going forward.
“And I don’t see too many negatives,” he said.
He noted that sales tax rebates from the Texas Comptroller’s Office to Waco and other communities have steadily increased during the calendar year, reflecting greater spending.
He said that is due, in part, to pent-up demand created when consumers paid off their credit card debt in the midst of lean economic times.
He said he expects retail sales to continue growing at a healthy 4 to 4.5 percent in 2014.
Improvements in the housing market nationwide should well serve the Greater Waco area, Kelly said, as retirees eyeing Central Texas can more easily find buyers for their homes.
Executives who have relocated to Waco but need to sell their houses back home also could see relief, Kelly said.
The troubled rollout of the Affordable Care Act’s enrollment phase has created uncertainty that needs to be addressed, Perryman said.
“The lack of clarity impacts the willingness of investors to take risks and employers to hire,” he said.
Shelton said the Federal Reserve, which controls the nation’s money supply, “seems committed to maintaining a stimulative policy.”
That means low interest rates will remain in force — “with that portion the Fed controls remaining at close to zero well into 2015,” he said.
The wild card, Shelton said, is how quickly the Fed will pull back on the purchase of Treasuries, which it buys to spur the economy by acquiring government debt.
He said the ACA could dampen spending and investing “if consumers see their (health insurance) premiums rise.”