Crane counting is an economic indicator that works anywhereAt the height of the 2005-06 boom you could see 11 of them from the windows of the Federal Reserve Bank of Dallas. In the recession that followed, they all vanished.
Look out at downtown Dallas today and you will count six cranes. There is a recovery under way in this city at the heart of Texas, at the heart of America.
William Noakes is a partner in Ockleshaw, Noakes & Stares, a Dallas-based consultancy that helps big retailers to design their shops. After three years in the doldrums, he says, the mood of the US retail market has changed. “I think people are now willing to open the purse strings and retailers are saying, ‘We have to reinvest’,” says Mr Noakes.
Yet the sunnier mood in Dallas does not chime with recent economic data for the US as a whole. Almost two years after the end of the recession, it is as if Texas is in a normal recovery while the overall economy has a speed limit built in: every time growth starts to accelerate, some hidden force reaches out and drags it back down.
In the fourth quarter of 2009, growth was 5 per cent at an annualised pace and all looked sunny – but then it slowed to below 2 per cent by the middle of last year. In the final three months of 2010, growth had picked up again, the Fed was buying another $600bn in “quantitative easing” assets to provide a stimulus, relief on payroll tax was planned for 2011 to help hard-pressed employers and encourage job creation, and all looked rosy. Yet growth in the first quarter was only an annualised 1.8 per cent.
The crucial question is how long the speed limit will remain. A good way to answer that is to compare Texas with America at large and look at where and how they are different, and where and how they are pretty much the same. A look at Dallas shows what is holding the rest of the country back – but it also offers hope for the long-term future of the US economy.
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