Wednesday, May 20, 2009

The Emerging Economy of Southern Texas

Southern Texas will offer some of the better opportunities in the United States for developers and private investors over the next generation.

In many respects, it is still largely undeveloped, and has some things in common with emerging economies for that reason. Emerging markets have seen faster growth than developed economies since the 2001 recession, largely because capitalism seems to be 'tapped out' in the G7 countries. More growth potential, and cheaper wages, are offered in less developed markets.

While the speculative bubble of oil and natural gas collapsed during this recession, it is a fact that the long-term price trend of energy resources is upwards. This also means the long-term trend in transportation costs is higher.

Texas still produces significant quantities of oil and natural gas, which will help its economic stability as prices increase.

More importantly, its likely that future transportation costs related to Asian sources of production will be more expensive than any offsetting labor or infrastructure cost benefits. Because of this, there will be the further growth of industrial production in Northern Mexico, from which Texas has historically benefited.

Southern Texas is one of the few places in the country that has added jobs over the past year.

1 "Punta Colonet and West Coast Port Wars"

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