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Economic Trends – July 2010
Beaumont / Port Arthur / Orange MSA
INDUSTRIAL PROJECTS
Commissioning of Total Petrochemicals Deep Conversion Project has begun. Commissioning is a
rigorous process which monitors, tests, evaluates, and documents the operation and function of the
facilities' critical systems. The process highlights issues and helps ensures a safe start up of the new
operation.
The Motiva refinery expansion, which will make it the largest in the world, currently has more than
5,000 workers on site. Most of these workers are fitters, welders, electricians, and instrument
technicians. Construction should peak at the end of the third quarter and the peak should last longer
than three months. The last of the fabricated modular assemblies for the Motiva expansion project
arrived by barge at the Port of Port Arthur in early July.
There were no acceptable offers for the Eastman Chemical engineering plans for the $1.6 billion
project cancelled in December 2009. Expectations are that the property will be on the market soon.
OTHER DEVELOPMENTS
Federal regulations state that millions of dollars in royalty payments from gas drilling at the Beaumont
Municipal Airport must be spent to benefit the airport. Beaumont City officials think that because the
airport does not offer commercial service, it is possible that regulation can be eased allowing only a
small portion of the money to spent for the airport and allowing the remainder to be spent for other
priorities determined by the City.
The Port of Beaumont’s revenue is running 18% ahead of last year and tonnage is nearly 60% ahead.
Expectations are for this to be the port’s second best year ever. The port supports as many as 2,000
jobs, both directly and indirectly.
The City Of Orange is moving forward with downtown and riverfront development plans for a
multimillion-dollar downtown expansion project. The first stages of the plan call for an outdoor
pavilion, a senior center and retail development along Front Street and 5th Street near the riverfront. A
proposed new boardwalk is planned along the riverfront from Ochiltree Park to the former Jack Tar
Hotel property at the Sabine River.
More than 100,000 square feet of new retail space was leased at Parkdale Mall in Beaumont and
Central Mall in Port Arthur in the last year -- a testament to the recovering local economy.
PURCHASING MANAGERS INDEX (PMI)
After 14 consecutive months of gains, the Houston Purchasing Managers Index (PMI) slipped slightly
from 59.0 in May to 55.6 in June. This mirrors PMI trends nationwide. The moratorium on drilling is
evident in the region's pullback. (Source: Greater Houston Partnership) Note: Houston's PMI is the
best proxy indicator for short-term regional production in the Beaumont MSA.
SALES TAX
Nederland showed a whopping 20% increase in sales tax over the May of 2009, thanks to the success
of its small businesses. Beaumont had a 2% increase - the first time this year that Beaumont showed an
increase as compared to corresponding month a year ago. All of the other cities showed a decrease for
May. The combined percentage change for all the cities in the region was -1% for May.
REAL ESTATE
May’s home sales numbers are still reflecting the
stimulus tax credit for first-time home buyers.
Although the home had to be under contract by April 30,
the buyers did not have to close on the home until June
30. That closing date has since been extended until
August 30. |
 | UNEMPLOYMENT CLAIMS
After a slight drop in the previous month, initial unemployment claims in the Beaumont MSA
increased slightly from May to June, but were 10% less than June of 2009. Continued claims increased
again over the month, but were 24% less than June of 2009.
EMPLOYMENT
The region added 600 in jobs in June, less than the 1,000 jobs added in May. The biggest increases
were in construction and professional and business services. Though the number of jobs increased, the
unemployment rate also increased from 10.7% in May to 11.2% in June. This is mainly due to the
cyclical increase in number of people seeking summer jobs. Port Arthur still has the highest rate among
the three cities, however, it showed the smallest increase in unemployment rate this month.
HURRICANE IKE FUNDING
The U.S. Department of Housing and Urban Development (HUD) recently approved the State of Texas
revised plan for $1.7 billion in Round II Hurricane Community Development Block Grant (CDBG)
Disaster Recovery funding. The plan allocates $317,492,059 to the Southeast Texas region for nonhousing
and housing projects. The region’s plan is due to the State of Texas on August 31.
State of Texas
The EPA has overturned Texas’ 16-year old air permitting program saying that it violates the Clean Air
Act. The EPA is working directly with industry leaders to find a way to efficiently and effectively
issue new air permits to the impacted plants.
In early July, Gov. Rick Perry announced the formation of the Gulf Project, a coalition of energy and
environmental scientists, policy experts, academic researchers, private sector research scientists and
state officials who will work in developing the next generation in offshore oil exploration safety and
response. Texas’ energy industry supplies 20% of the nation’s oil production, 25% of the nation’s
natural gas production, 25% of the nation’s refining capacity, and nearly 60% of the nation’s chemical
manufacturing. Additionally, Texas’ energy industry employs 200,000 to 300,000 Texans, with $35
billion in total wages.
According to the Texas Real Estate Center, Texas is poised for a 21st century boom for the following
reasons: population and economic growth; low cost, available labor; pro-growth attitude; migration into
State from elsewhere; attractive retirement areas; and most affordable state for land, housing and
overall cost of living. The Houston MSA is expected to grow between 2 and 5 million more people
between 2005 and 2030.
Most of the information in this report was prepared from publicly available sources.
Prepared by Karen Bourdier – Entergy Texas economic development group
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