The U.S. economy, and Texas’ too, is likely to get a boost from the incoming Trump administration, presuming that the president-elect carries through on plans to cut taxes, reduce regulation and boost spending on infrastructure.
That’s the view of professors at SMU’s Cox School of Business in Dallas, who met with reporters on Friday to offer their thoughts on the economic outlook for 2017.
The school’s dean, Al Niemi, said he is bullish and predicted that growth of gross domestic product, which has averaged 2 percent in the slowest recovery since the Great Depression, could approach 3 percent next year.
“I think the economy will grow more in 2017 than it has since 2007,” said Niemi, who has announced he will step down as dean next year after 20 years. While Trump won the Electoral College but not the popular vote, he said, “There is a mandate in this country for creating jobs.”
Niemi views Trumponomics as classically Keynesian, combining tax cuts with government spending to create jobs. While protectionist measures on trade with Mexico and China would be a hindrance, he thinks Trump has a slimmer chance of renegotiating NAFTA than getting a stimulus bill through Congress.
In Texas, corporate relocations should continue to bring new jobs and residents to North Texas, which is a hot market for commercial real estate investment. And the oil industry should continue to rebound from its recent slump, with growing production in the Permian Basin in West Texas leading the way, said Bruce Bullock, director of the Maguire Energy Institute. However, advances in technology are allowing producers to use fewer rigs to pump oil, meaning fewer jobs added than in the past, he said.
A cautionary note was offered by Harvey Rosenblum, a finance professor and former executive vice president at the Dallas Fed. He worries about a recession being caused by a financial crisis in another country, such as a big bank failure in Europe.
Such a scenario would be preceded in the U.S. by a stock market correction, he said. And with interest rates still extremely low, the Fed would have little it could do in response. He put the likelihood of such as event at 25 percent.
Bell CEO talks up new aircraft
It hasn’t been a great year for commercial helicopter sales but that isn’t stopping Bell Helicopter from developing new helicopters, Chief Executive Mitch Snyder said.
Speaking at a Fort Worth Chamber of Commerce luncheon on Tuesday, Snyder said the company and its 4,000 employees in Fort Worth are focused on two new commercial helicopters, the 525 Relentless and the 505 Jet Ranger X, and a new tilt-rotor, the V280 Valor.
“We continue investing in new aircraft,” Snyder told the audience of about 200. “The key to our growth is to have those products ready when our customers are ready.”
But Snyder, 55, who joined Bell in 2004 and worked previously at Lockheed Martin in engineering, business development and manufacturing, acknowledged that commercial helicopter market sales have been sluggish since he became CEO in October 2015. The company laid off 1,100 workers earlier in 2015 as helicopter sales declined.
“I took the helm as CEO last year in the middle of an unprecedented world market decline impacting every rotorcraft company and supplier worldwide,” Snyder said. “Total commercial sales in our industry this year will be about 50 percent what they were in 2013.”
One of Bell’s products is the 525 Relentless, which has been grounded for test flights after a fatal crash in July that killed two pilots. Snyder said the company is working closely with government officials in the crash investigation and there is no timetable on when the Relentless may fly again.
“We’re taking this process very seriously and we’re still very committed to this program,” Snyder said. The 525 Relentless will carry between 16 to 20 people and could be used to transport workers to offshore oil rigs.
During his speech, Snyder reiterated the company’s commitment to Fort Worth as it recently celebrated 65 years at its Fort Worth headquarters.
“We are deeply involved in the community and continue to have an impact on the local economy,” Snyder said, adding that the company expects to generate $38.4 billion in economic impact over the next 10 years.
Craddick to chair Railroad Commission
it’s deja vu all over again at the Texas Railroad Commission.
The commission has voted unanimously to put Christi Craddick back into the commission’s top spot, taking over from outgoing Commissioner David Porter.
Craddick, daughter of former Texas House Speaker Tom Craddick, turned the reins of the commission over to Porter a little over a year ago. Porter did not seek re-election and will be leaving the agency, which oversees the state’s oil and gas industry, at year’s end.
“We are in a pivotal time for enormous energy growth in the United States, and particularly in Texas,” Craddick said in a statement. “I am honored to serve as chairman as we continue to drive Texas and the nation forward during this important time for American energy development.”
Craddick said she plans on holding meetings with Texas operators to outline a five-year plan on technological advancement to ensure that the agency employs the best practices in its regulatory role. She also wants to talk to staff across the state to guarantee consistent application of rules and enforcement actions.
Craddick served as her father’s chief political and legal adviser from 2002 to 2011. She also is an attorney specializing in oil and gas, water, tax issues and environmental policy.
“We will make our case [to the Legislature] for necessary consistent revenue sources for the agency as well as immediate funding so that we are able to fully carry out the agency’s important functions,” she said.
Being chairman is largely ceremonial. While the chairman presides over the agency’s meetings, each commissioner acts independently and pushes his or her own agenda. There is no set timetable for selecting a chairman or chairwoman; it can be changed at any time.
Former state Rep. Wayne Christian will join Craddick and Commissioner Ryan Sitton in January.
American flies vets to Pearl Harbor
American Airlines flew 72 Pearl Harbor survivors and World War II veterans from Los Angeles to Honolulu on a charter flight to make sure the veterans could attend last week’s ceremonies to commemorate the 75th anniversary of the attack on Pearl Harbor.
The Fort Worth-based carrier, which supports several veterans organizations with its annual Sky Ball fundraiser and military families with Snowball Express, flew the veterans for free to Hawaii.
Capt. Tim Knutson volunteered his time to pilot the flight and visited with several of the veterans about their service.
“They are the strong ones, now at 91 years and older. You’ll be visiting with them and reflecting on what they have given and sacrificed and what their friends sacrificed,” Knutson said in a post on American’s website. “You can’t help but get emotional as you realize the extent of their service and commitment.”
Andrea Ahles: 817-390-7631, @Sky_Talk
Max B. Baker: 817-390-7714, @MaxbakerBB
Steve Kaskovich: 817-390-7773, @stevekasko