For immediate release: October 26, 2007
Dallas Fed Report Examines Texas Metro Economies, Banking Industry, Economy of Las Cruces, N.M., and 'Globalized Texas'
DALLAS—The latest issue of the Federal Reserve Bank of Dallas' Southwest Economy features articles on industry clusters in Texas cities, the status of Texas banks, Las Cruces' economy and globalization in Texas.
Industry clusters in Texas metropolitan areas can have significant effects on average earnings and earnings growth as well as provide a key to understanding their economic fortunes, according to assistant economist Laila Assanie and vice president and senior economist Mine Yücel in "Industry Clusters Shape Texas Economy."
Industry clusters are geographically concentrated groups of companies related by technologies used, markets served, goods and services produced, and labor skills required.
High-tech services in Austin and oil and gas exploration in Dallas–Fort Worth are just two examples of industry clusters in metro areas. The oil industry in Houston, the healthcare industry in San Antonio, and cross-border trade in Laredo and El Paso shape the economy in these cities.
"Industry clusters could be a factor in higher earnings because they help companies achieve higher productivity from knowledge spillovers and lower costs," Assanie and Yücel write.
In "Taking Stock of the District Banking Industry," senior vice president Bob Hankins says that Texas banks have not been affected significantly by the housing slump since the state's real estate market hasn't seen the kinds of difficulties other regions have.
He points out that only a half percent of mortgages held by Texas banks aren't being paid on schedule, compared with more that 1 percent nationally.
However, Hankins notes that "if we have a major economic downturn, banks' exposure to commercial real estate could have a significant impact on the overall condition of the industry."
In "Las Cruces, N.M.: Well-Balanced Economy Delivers Solid Growth," vice president Robert W. Gilmer finds the local economy has cooled but is poised to revive quickly once the national and regional economies pick up steam.
"Las Cruces has built a well-balanced, service-oriented economy based on education, defense, agriculture, tourism and construction. This mix has kept the area's economy humming," he writes.
The Texas economy is more globalized than the United States' as a whole, but the state's export markets are not as diversified, according to senior economist Anil Kumar in "Globalizing Texas: Exports and High-Tech Jobs.
"Compared with the nation, Texas exports a larger share of its output, depends on exports for more of its jobs, sends more sophisticated products overseas and employs higher-skilled workers in export-related jobs," he writes.
The quality of high-tech workers in Texas helps put the state ahead of the nation in exporting technologically sophisticated goods, Kumar notes.
However, he points out that Texas export markets continue to rely considerably on Mexico.
"Texas trade with emerging economies remains solid, although the state depends heavily on the Mexican market," he says. Texas lags the U.S. in tapping into fast-growing Brazil, Russia, India and China.
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