Fort Worth is best performing metro area in Texas

The U.S. recovery from the worst economic crisis since the Great Depression will be long and slow, but the recovery has begun and Fort Worth may be the best place in the country to ride it out, according to Nathaniel Karp, the chief U.S. economist for BBVA Compass.

Karp made a presentation to Fort Worth Rotary Club members on Sept. 10 about the overall state of global, domestic and local economic conditions.

“This is not going to be your average recovery,” Karp said. “If you thought this was going to be something very similar to past recoveries, you were wrong. There is going to be a very long adjustment process.”

Karp said the booming economy of the 1990s and early 2000s was leveraged on the housing sector, where easy credit and unchecked accumulation of debt made the good times fiscally unsustainable. “Now we are paying the price for that,” he said.

Karp said government efforts to stimulate the economy have worked to get the economy growing again – albeit slower than anticipated and much slower than recoveries past – but he discouraged a new round of government spending, saying now is the time to let the markets work.

“We don’t need a second stimulus,” he said. “We needed the first stimulus because we were facing a catastrophe. Now the economy is growing again and the markets need to be allowed time to adjust. Just be patient.”

Karp said Texas has weathered the crisis better than most states thanks to lessons learned after the state’s financial meltdown in the 1980s. Prudent economic policies, a diversified economic base, an energy sector that has remained stable and stricter lending laws all contributed to Texas’s capacity to endure economic curveballs.

Fort Worth in particular has managed the crisis extremely well, Karp said, and currently ranks as best performing metro area in the state, from an economic standpoint.

“Fort Worth is doing better than Dallas, Austin and Houston,” Karp said, assigning much of the credit to the continued stability of the energy sector, upon which much of Fort Worth’s economic fortunes still depend.

“If you were to forecast the kind of recession we had, where would you have forecast energy prices?” he said. “It would have been really bad. But no one was expecting the demand from the emerging markets to absorb the decline in demand from the developed world. That helped avoid a sharp decline in energy prices.”



~Rob Robertson-Ft Worth Biz Press