Waco, Texas, Real-Estate Center Economist Predicts Job Growth in 2004. - Knight Ridder/Tribune Business News

By Mike Copeland, Waco Tribune-Herald, Texas Knight Ridder/Tribune Business News

Jan. 22--The nation's economic recovery, which so far has not generated many jobs, will begin putting more people to work in 2004, says the chief economist for the Real Estate Center at Texas A&M University.

Economist Mark Dotzour, who spoke Wednesday to the Waco Association of Realtors, said he also believes home building will remain strong in Texas' metropolitan areas, including Waco, with interest rates slowly rising but only by half a percent to 1 percent.

New home sales and starts nationally were up almost 10 percent in 2003 from 2002, with 1.5 million single-family homes built nationwide, according to information on the Real Estate Center's Web site.

Turning to employment trends, Dotzour said he expects the continued economic recovery will create jobs. He said recovery typically goes through three phases in regards to jobs: Employers pay their workers overtime, not wanting to hire additional help when business first picks up; employers hire temporary workers as business picks up even more; and, finally, 'employers have enough confidence to hire more full-time people.'

Dotzour said he believes the nation is approaching that last phase, if it's not already there.

Managers of temporary employment agencies noted that they are seeing an increase in demand, which is in-line with Dotzour's assessment. Mark Elliott, who operates Express Personnel Services in Waco, said in a phone interview he experienced a 20 percent increase in revenues in 2003 over 2002 as a result of increased demand for temporary and full-time employees.

Tony Hernandez, who has managed the Kelly Services temporary employment office in Waco for six weeks, said Wednesday that 'the impression I'm getting from people who work here is that we're busier now than at the same time last year, unseasonably busy.'

Dotzour said he believes many employers have questions about how long the recovery will last beyond this election year. After all, he said, the government prodded the economy by cutting taxes and issuing $400-per-child tax rebates to families.

'That's something we can't afford to do every year,' said Dotzour.

He added that the economy also has been fueled by increased government spending, which has created a $350 billion budget deficit, and by the dollar's falling in value versus other currencies. A falling dollar boosts the United States' manufacturing sector, he said, because it makes goods produced in the United States less expensive to foreign buyers.

This year, said Dotzour, he expects employers to get over their jitters and to ratchet up the hiring of new employees. He said he believes that step is inevitable in light of climbing corporate profits and a generally robust economy.

Dotzour said Waco's central location within the state gives it advantages in pursuing jobs.

'Every year, the population of this state grows by 350,000 people. We get a new Corpus Christi every year,' said Dotzour. 'New retailers moving into the state (because of this growth) want warehouses, and Waco could get its share.'

Dotzour said he also believes Waco will become a health-care hub as baby boomers in small communities within a 50-mile radius grow older and travel to Waco for health care, or even move to Waco to get closer to health-care facilities.

Asked about Waco's high-tech potential, Dotzour said, 'The high-tech potential is in India. Technology, particularly information technology, is moving to India and possibly China. That's not just theoretical; that's happening.'

Discussing investments, Dotzour said the stock market has seen a run-up in recent months, and stocks are highly valued. He's not sure how much longer they can retain their value, he said, and he thinks investors will have similar concerns.

He said he thinks investors will give more consideration to buying land or second houses as investments.

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(c) 2004, Waco Tribune-Herald, Texas. Distributed by Knight Ridder/Tribune Business News.