US and Texas Population Projected to Experience Significant Expansion
Reports posted this week by the US Census Bureau indicate that the population of our nation is projected to hit the 300 million milestone sometime this fall. When you view US growth over the next quarter century, it appears that we will add more than 70 million people, which represents a gain of almost 25% by 2030 to reach some 370.5 million.
Most of that growth is predicted to be in the southern and western areas of the US, with California, Texas, and Florida contributing almost half. By 2030, the south and west will likely have about 65% of the total US population. Texas, forecast to be among the top five fastest-growing states, is expected to add nearly 12 million residents over the 2005-2030 period.
This expansion will enable Texas to remain the second most populous state in the Union, behind California. Florida, which currently ranks fourth in population, will likely replace New York for the third-place spot by 2011.
The Census Bureau also noted that Texas has four of the 25 fastest growing cities (Fort Worth, Denton, Killeen, and Grand Prairie) along with four of the top 25 cities with the largest numerical increase from July 2004 to July 2005 (San Antonio, Fort Worth, Austin, and El Paso). In addition, three Texas cities rank among the largest in the nation: Houston (4th), San Antonio (7th), and Dallas (9th). In fact, San Antonio leaped past San Diego to claim the 7th slot.
According to the Perryman Long-Term Economic Forecast, which was completed and released last week, the state’s six major metropolitan statistical areas (MSA) will account for approximately 70% of the total population expansion over the years from 2005 to 2030. The smaller MSAs are predicted to generate about 20% of the increase. In 2030, the six major metros are expected to account for about 67.27% of the overall state population, with the smaller MSAs contributing some 20.52%.
Five of Texas’ larger metro areas are predicted to have compound annual growth rates (CAGR) for this timeframe beyond the 1.70% per annum climb of the state as a whole. They include: Austin-Round Rock MSA, 1.82%; Dallas-Plano-Irving Metropolitan Division (MD), 1.82%; San Antonio MSA, 1.81%; Houston-Baytown-Sugar Land MSA, 1.78%; and Fort Worth-Arlington MD, 1.75%.
Of the 20 smaller metro areas, three are anticipated to achieve yearly population gains exceeding that of the state. They are: McAllen-Edinburg-Pharr MSA, 2.25%; Laredo MSA, 2.16%; and Brownsville-Harlingen MSA, 1.86%. All are located along the Texas-Mexico border, and Hispanics are projected to be a major factor in the population expansion.
With the exception of the El Paso MSA, all the major metros are likely to have a larger percentage of the overall state population in 2030 compared to 2005. The metros and the forecast percentages of the state’s total residents in 2030 are: Houston-Baytown-Sugar Land, 23.47%; Dallas-Plano-Irving, 17.48%; Fort Worth-Arlington, 8.48%; San Antonio, 8.34%; Austin-Round Rock, 6.42%; and El Paso, 3.07%.
Only three of the 20 smaller metros are expected to experience a percentage hike from 2005 to 2030. The MSAs and the projected percentages of the aggregate state population in 2030 are: McAllen-Edinburg-Pharr, 3.33%; Brownsville-Harlingen, 1.71%; and Laredo, 1.09%.
Currently across the US, about one out of nearly every seven persons is ethnically Hispanic. In Texas, the ratio is approximately one out of every three people. Nearly two-thirds of Hispanic-origin people in the US are of Mexican background.
As Texas and the United States look toward the future, it is evident that the projected expansion of the Hispanic population will have significant economic, political, and cultural impacts.
posted @ 07:58 AM CST [link]
Friday, June 23, 2006
A Step in the “Wright” Direction
There’s an old adage that says “the wheels of progress grind slowly.” With regard to the recent decision related to Love Field operations, it is easy to recognize that changing the Wright Amendment has certainly been a slow process and, of course, it’s not finished yet.
Hopefully, should Congress approve, over the next eight years, as suggested by the agreement signed last week by representatives from Fort Worth-based American Airlines, Dallas’ Southwest Airlines, DFW International Airport, and the cities of Fort Worth and Dallas, the headaches and inconveniences that so many travelers have faced for almost three decades will gradually fade into forgotten memories.
As you may recall, in the 1960s, the Federal Aviation Administration judged that the two major airports in the Dallas-Fort Worth area, i.e. Dallas’ Love Field and the Greater Southwest International Airport in Fort Worth, were unsuitable for the expectations of the future. The result was the creation of the Dallas/Fort Worth International Airport (DFW International), which opened for commercial air traffic in 1974.
In order to ensure the viability of DFW operations, officials of Fort Worth and Dallas had earlier agreed to restrict commercial operations from their local airports. Southwest Airlines, however, which was founded in 1971, was not a party to this agreement, and in 1973, the US Supreme Court granted permission for the airline to operate from Love Field.
Following the deregulation of the airline industry in 1978, Southwest entered the larger passenger market with plans to promote interstate service the following year.
Concerned that such operations might negatively impact DFW, Texas congressman Jim Wright sponsored a bill to place certain restrictions on passenger service from Love Field. Passed in 1979 and named the Wright Amendment (as it was an amendment to an unrelated law), it limited operations from Love Field to most parts of the country. The primary beneficiary of the law, as intended, was the DFW Airport.
The bill originally restricted passenger service from Love Field to the adjoining states on regular mid-sized or large aircraft. (Subsequent changes enabled the service to be expanded to a few additional states.) The Amendment did authorize long-haul service to other states, but only on aircraft that carried less than 56 passengers. This restriction was a considerable deterrent to most major airlines which normally operated aircraft with capacity well beyond that number.
In spite of the limitations, Southwest Airlines persevered over the years by using multiple short-haul flights to strengthen its Love Field operations. An abbreviated attempt to by-pass the Amendment was made by Legend Airlines in 1996 with reconfigured airplanes. This effort failed with the folding of the company in 2000.
In 2004, serious efforts got underway to repeal the Wight Amendment. Opponents and proponents engaged in a variety of tactics to promote their views. In the end, common sense—swayed by the fact that competition usually proves beneficial and that needs change as times change—won out. The fact that DFW has become one of the busiest airports in the nation was also a consideration.
In all the marathon sessions and extensive deliberations that led to the recent agreement eventually allowing direct flights from Love Field to numerous locations throughout the nation, a key element should not be overlooked: representatives from the various parties involved, each with a separate mission and agenda, compromised for the sake of progress.
Though no particular side got everything it wanted, the willingness to work together to accomplish what all participants considered to be in the best public interest was the guiding influence and the final determinant.
If Congress concurs with the agreement and repeals the Wright Amendment, then we will undoubtedly witness economic advancement for Texas, particularly the air industry and the travelers for which it provides services. If Congress delays and fails to approve the plan by the end of 2006, then, for all practical purposes, the unprecedented compromise will have been for naught.
Hopefully, our elected representatives will recognize the value of cooperative decision-making and realize the benefits this change can bring. If so, their positive votes will clearly be a significant step in the “Wright” direction for the Lone Star State.
posted @ 08:15 AM CST [link]
Friday, June 16, 2006
Long-term Economic Outlook is Positive
Every year about this time for the past 25 years, my colleagues and I at The Perryman Group have developed a long-term economic forecast for the US and Texas, as well as the state’s metropolitan areas and economic regions. The forecast recently completed provides pertinent information and data related to projected economic growth and development for the years 2005 to 2030.
Looking forward over the next 25 years, I anticipate that the nation’s real gross domestic product (inflation adjusted) will expand at 3.49% per annum. The yearly gain of the Lone Star State’s real gross product (RGP or output) will likely be 3.81%. The expansion rate for Texas represents output valued at nearly $2.15 trillion in 2030 (measured in constant 2000 dollars), which is some $1.3 trillion more than the 2005 RGP total of $842.2 billion.
Of the entire amount of RGP generated in Texas from 2005 to 2030, the state’s largest metropolitan statistical areas (MSAs) are predicted to account for about 82.39% of the increase. The smaller metros are expected to provide approximately 12.50% of the total output gain, with the balance in the rural segments of the state. In the year 2030, the larger metros are anticipated to provide 81.20% of the state’s total output, while the smaller MSAs are expected to produce 12.73%. In 2005, the percentages of the state’s aggregate output represented by the larger and smaller MSAs were 79.36% and 13.08%, respectively.
Over the 25-year forecast horizon, the large metros are anticipated to achieve a combined RGP compound annual growth rate (CAGR) of 3.90% while the smaller MSAs will likely experience an aggregate yearly expansion of 3.70%.
In 2030, the Services industry is predicted to account for 21.83% the state’s total RGP, slightly less than the 21.92% that this sector generated in 2005.
With regard to employment expansion in Texas from 2005 to 2030, I anticipate the addition of about 4.73 million jobs, which represents a yearly growth rate of 1.54%. The US employment CAGR for the same timeframe is expected to be approximately 1.29%. The Services industry is forecast to have about 41.26% of the state’s workers in 2030, up from the 36.96% this sector provided in 2005.
The larger metros are projected to provide some seven out of every 10 jobs added over the long term. By 2030, 71.31% of all wage and salary jobs in the Lone Star State will be located in the larger metros. An additional 20.63% of the total number of people employed in Texas at that time will be in the smaller metros. Currently, the larger MSAs provide about 70.07% of the state’s workers with the smaller metros accounting for some 20.25%.
The 11.97 million individuals projected to be added to the state’s population roles over the 25-year period of the forecast horizon will likely push the total number of residents in the state to 34.89 million in 2030. This growth reflects an anticipated CAGR of 1.70%. For the same timeframe, the yearly expansion of the US is predicted to be 0.89%.
Long-term forecasts for other major economic indicators suggest that retail sales will likely experience a 6.31% CAGR from 2005 to 2030 with real personal income (by place of residence) expected to achieve a yearly increase of 3.66%.
Thus, even though Texas and the US face numerous challenges and uncertainties, the outlook for the years ahead is positive. The economic pattern painted for 2005 to 2030 is projected to be one of gains in output and employment in almost every industrial sector across the state.
posted @ 08:37 AM CST [link]
Friday, June 9, 2006
The Challenges and Opportunities of Retirement
Over the past few years, the attitude of many older Americans regarding retirement has changed. Although some people who reach 65—the customary age for retirement—begin to fill their days with fishing, playing golf, or traveling more frequently, a growing segment of senior citizens is demonstrating increased interest in continuing to work on a regular basis.
Reasons vary for the older generation’s decision to remain in the workforce. The desire to stay mentally alert and physically active tops the list, but concern about health insurance and the realities of reduced finances play important roles as well. They desire to “give something back” to society, either as volunteers or through consulting; teaching also ranks high.
A recent report by Putnam Investment notes that some 7 million Americans who retired in the past few years have returned to work at least part time. The majority of those who choose to “work in-retirement” claim their decision was driven by the desire to be a part of an endeavor rather than the need to work for financial reasons. Many of those who have sufficient funds in the bank to live comfortably without working still do, just because they can and because they enjoy it.
Still, quite a number of older citizens return to the labor force when they find their pension plans are not sufficient to meet their needs or when they face some financial calamity. With a longer life expectancy, many people also have to reshuffle their life plans and the finances required to meet them, and additional income is often needed. Employment can also provide senior citizens with funds to do more things they never got around to in their younger years.
Moreover, some individuals are hoping to use their later years to follow their dreams and live their lives “their own way.” They work in order to continue receiving a regular paycheck, but do not wish to be a slave to their job.
Not only are the views of many individuals who are already retired changing with regard to work habits, but an Association of Retired Persons (AARP) study of pre-retirees shows that about 43% are planning to engage in some kind of work after they reach 65. Many look forward to a change in careers to reduce stress or workloads or just for new experiences. Others intend to remain productive and useful in their current career fields.
A new study which Harris Interactive recently conducted for Merrill Lynch indicates that about 75% of “baby boomers” (those born between 1946 and 1964) hope to work well into their “retirement”—at least part time. About half of those who anticipate working in some capacity after age 65 plan to never stop working completely. For those who do foresee eventually opting out of the work force, the age at which they project doing it is well beyond 70.
Nearly 85% of working Americans are planning for retirement to some degree. According to AXA Equitable, some 64% of those who plan to retire wish to spend their retirement savings on themselves rather than leave it for their heirs.
On average, those currently employed consider age 55 as the ideal age to retire, but most recognize the impracticality of this ideal. Still, nearly three out of four Americans who do retire do so before age 65. Perhaps that’s another contributing factor as to why so many return to work. Given good health, prospects for a long life, and the desire to do so many more things in life, why not?
With over 7,900 baby boomers reaching 60 years of age every day, our economy will undoubtedly benefit from such decisions.
posted @ 07:35 AM CST [link]
Friday, June 2, 2006
Communication and the Internet
The sophisticated ability to communicate is a uniquely human trait. Thanks to technology, the options (and sophistication) just keep rising. Continuing improvements through the years in both methods and techniques have significantly facilitated personal relations and business activities.
With technological advancements speeding up the process and with more and more people taking advantage of myriad opportunities available via the Internet, communication has dramatically changed. Today, messages can be sent and received almost instantaneously practically anywhere in the world.
According to a Harris Interactive poll released earlier this week, about 77% of the adults in the US (172 million) are now online at home, at work, or elsewhere. That’s considerably higher than the 57% in 2000 and phenomenal expansion beyond the 9% who were using the Internet 10 years ago. Some 52.2% of households in the US with Internet access use broadband. Within two years, that percentage will likely rise to nearly 69%.
The number of Internet users worldwide is approaching 845 million and, although the US has more Internet users than any other nation, China is quickly moving up from its second place position with over 111 million users. The current number of Internet broadband users around the world is close to 200 million or about 23% of total Internet users. Broadband use is predicted to reach 477 million by 2011.
Some 70% of adults online have access at home, compared to 66% in this category last year and 55% in the spring of 2002. Online availability at work is 35%, which is about the same as last year, but a moderate hike over the 30% in 2002. The percentage of adults who obtain access to the Internet at places other than home or work is approximately 22%, slightly above the 19% in 2002.
Caucasians dominate the usage at 76%, followed by Hispanics at 13%, and African-Americans at 10%. Approximately 51% of the users are female; close to the 52% of the total population which is female.
Nearly four out of every 10 users have only a high school diploma or less and about 30% have completed college. Some 52% of those with Internet access have an annual household income of $50,000 or more, while 14% of households make less than $25,000 per year.
About 24% of adult Internet users fall in the 18-29 age bracket. Around 30% of adults online are above 50 years of age, and 8% of users are 65 years and older.
A Pew Internet and American Life Project study recently noted that use of the Internet varies widely across the continental US and ranges from 68% of adult residents in the Pacific Northwest to 48% in the central Southern states. About 60% of the residents in the border states of Texas, New Mexico, and Arizona have online access. Rural Internet users are considerably less active than those who live in suburban or urban areas.
Some 93% of Internet sites used by employees while at work are directly related to their responsibilities, but many other sites are also accessed. The other most popular sites visited by users at work are map, news, and weather sites. Government, educational, banking, and travel follow with personal e-mail and shopping rounding out the top 10. On any given day, more than 50 million Americans get their news updates online.
A significant amount of Internet users’ time—whether at work, home, or other locations—is devoted to social enrichment and self-improvement sites. This kind of activity has enabled the top 10 social networking sites collectively to grow 47% from April 2005 to April 2006 and reach 68.8 million.
Some 30% of total Internet users in the US log on for no specific reason. They just use the technology to pass time and have fun.
The Nielson/Net Ratings indicate that of the top three Internet search engines, Google remains the most popular with nearly 50% (2.7 million) of total searches performed in April. Yahoo! had 22%, and MSN had 11%. Year-to-year growth in April was 34% for Google, compared to 27% for Yahoo! and a 10% hike for MSN.
High speed communication has seemingly shrunk the world, and the virtual shrinkage will likely be sustained as more and more people continue to accept newer advances and better ways to communicate.
posted @ 07:33 AM CST [link]