By Dave Moore, Staff Writer
Look for the economy in Dallas-Fort Worth – and the United States – to rebound strongly over the coming years, as long as the COVID-19 virus fades and supply chain issues and other factors fall in the region’s favor.
Also, offices will remain a valuable part of the economy for their collaborative potential, despite the hit they took during the pandemic.
Those are a few takeaways from the Dallas Regional Chamber’s annual Year Ahead event, held Thursday, Nov. 11 and presented by Amazon and Truist.
Economist Ray Perryman spoke at the event, as did BlackRock’s Chief Investment Officer of Global Fixed Income, Rick Rieder, and Jacobs Engineering’s COO and President, Bob Pragada. Rieder and Pragada were interviewed by Mike Allen, the co-founder and Executive Editor of Axios.
“I have a very weird projection to make – and I’ll probably be wrong,” said Perryman, who has delivered his predictions at DRC events for three decades. “But we’re looking over the next five years at Dallas growing at a much faster rate than the state in terms of employment – averaging over 1,000 jobs a week.”
Perryman said it’s remarkable that one region could average adding 1,000 jobs per week, yet that was DFW’s pre-COVID job growth rate as well. Along with Phoenix, the region is unique in metropolitan areas in the United States in seeing a net positive job growth rate over the past three years.
Perryman added that the region’s gross domestic product will grow slightly slower than Texas’, but only because oil’s rebound will be even stronger. His other predictions called for both retail and commercial real estate to evolve, but still remain important elements of the DFW economy.
Two potential clouds Perryman sees in the future: Leaders failing to rein in the pandemic and state legislation that drives away knowledge workers – and by extension, corporate relocations.
“I don’t need to tell the people here how important knowledge workers are,” he said. “Eighty-six percent of knowledge workers in a recent poll said, ‘We kind of don’t want to be in a place that does that stuff.’ And they can dictate where a company locates.”
Another concern for Perryman: If Texas doesn’t step up its education game, its economy won’t remain competitive, even though its population is growing.
“If Texas’ educational quality remains exactly the same as it is today…in 15 years…that will lead us to a workforce that is not competitive, and with a lot of social service needs to be filled by the public sector,” he said. “That’s not the kind of place Texas wants to be.”
BlackRock exec: Pent-up capital will lift economies
Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, was equally bullish on the DFW and national economies, saying that pent-up capital – to the tune of $3 trillion – will help buoy consumer markets.
“For two years, people have been locked up in their houses,” Rieder said. “For two years, people couldn’t go to restaurants. So what happens is, you have this accumulated underspend that took place…2% of savings, or unspent dollars.”
“That works out to…$670 billion, and if you marry that to the over $2 trillion of a one-time fiscal spend (by Congress) that went to consumers, you’re talking about $3 trillion.”
Rieder – who cautioned that inflation, a COVID setback, and other factors could impact the economy – said that consumers’ accumulated cash, coupled with the current hot jobs market and an almost 0% unemployment, could lead to a durable, “spectacular” economy.
While Rieder predicted oil might reach $100 per barrel, he thinks that still won’t impact consumers significantly; he also added that while inflation might be a worry over the next six months, those concerns are expected to recede in the spring.
Jacobs exec: Diversity key in regional, corporate competitiveness and connectedness
In his discussion with Axios’ Mike Allen, the COO and President of Jacobs Engineering, Bob Pragada, said companies looking for a competitive advantage going into the next year need to concentrate on diversity, equity, and inclusion in their business plans, if they haven’t already.
“It is on the forefront of our agenda here in the Dallas business community,” Pragada said. “And I can speak specifically for Jacobs, it is our number one priority. We are a people business at Jacobs. You can make an argument that the community of Dallas is a people business.”
In order to get the best of all of their people, companies and communities need to be inclusive, he said.
“We also need to have an environment where people can honestly and sincerely be their authentic self, and that’s the environment that we have strived to create here,” he said.
Along those lines, Pragada said that companies will increasingly see the value in caring about mental health, including that of supervisors and executives.
“I think leaders maybe underappreciate the importance of taking care of themselves first,” he said. “There’s no way we can be all we can for our people if we’re not we’re taking care of ourselves first. I think the pandemic after the pandemic is the crisis around mental health.”
Pragada said Jacobs’ competitive advantage has been built on its connection with its employees in 26 offices across the world.
“We bring global talent to deliver solutions locally,” Pragada said. “I think the pandemic has really put a magnifying glass on that.”
Pragada also said that the Dallas Region is evolving into an international destination through its growth.
“Where we are as a (region), in our striving to be an ‘international’ region – if you look at the intake of population coming into Dallas today, that is a very diverse population that’s coming in.”
Pragada added that this diversity spans from religious and ethnic diversity, to food and the arts, too.
“It’s really turning into an international platform,” he said. “I grew up in Chicago, so I was probably a little spoiled on the international aspects of a metropolitan area like Chicago; I can see Dallas on the same trajectory.”
And when asked about the future of the workplace, Pragada said he sees more flexibility in allowing workers to complete their tasks at home or in the office.
“I think the nature of the workplace is changing,” he said. “To see the workplace as someplace where people come together to congregate, rather than, ‘I’m going to sit at my cubicle for eight hours, then drive home.'”
Click to the 54:30 mark in the video below to watch the entire Year Ahead event.