With Oil and Mining Strong, No Business Drought in TexasBy Whit Perryman
Article Date: 01-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
AED At-Large Director
Vermeer Equipment of Texas, Inc.
Most equipment dealers in Texas found 2007 to be a fairly successful one, comparatively speaking. With the major issues going on in other parts of the country where the lack of housing starts or an economic downturn may have hit their markets, the Texas economic climate appears to be one of the better ones at this time.
It is a challenge to try and forecast a 2008 business model when every time you turn on a television, radio, computer, or you look at a newspaper, you find someone predicting the latest probability for a U.S. recession. Sometimes it seems these folks do a great job of talking us into a downturn. However, if you have been watching the stock market lately, you will find more "ups and downs" than the latest ride at Six Flags.
Most people feel the Texas economy in 2008 should continue to grow at least at the same pace it did during 2007. The industries that are impacted by the oil and gas markets are finding their businesses to be fairly strong. With oil prices approaching $100 a barrel, many companies in this sector are making record profits. With these record profits, more jobs are being created. It is not surprising (with the strong oil and gas markets) that the Houston market has been consistently strong over the past several years. The Dallas/Fort Worth market overall is performing well, with a lot of the success resulting from the natural gas drilling in the Barnett Shale area surrounding Fort Worth. Overall, unemployment levels are down significantly as compared to national levels.
Commercial real estate development remains steady in most of the state, despite a drop-off in residential home construction. Dealers overall should find their rental businesses strong, with most of the national rental stores and smaller local rental stores experiencing utilization at high levels. Dealers who are involved in the mining business continue to see this industry outperforming most other markets that they are involved with. And the ongoing need for new development and improvement in our highways and roads should be a positive factor for the dealers that service this market.
Record rainfall levels occurred in 2007 throughout most areas of the state as compared to the droughts that were experienced in 2006 - this excess rain delayed many construction projects during the year. With many areas of Texas experiencing weather extremes from one year to the next, we hope that 2008 will bring a more moderate level of rain that is closer to historic averages instead of the rainfall that some Texas markets experienced, which amounted to an average annual rainfall hitting over a mere two-day period.
With the coming year being a presidential election year, hopefully we will find an overall economy that stabilizes as the 2008 year progresses.
Best wishes for a successful year in 2008!
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