TEXAS BUSINESS REVIEW VOL. XLIV, NO. 1, JANUARY 1970 Editor, Stanley A. Arbingast; Associate Editor, Robert H. Ryan; Managing Editor, Graham Blackstock Editorial Board: Stanley A. Arbingast, Chairman; John R. Stockton; Francis B. May; Robert H. Ryan; Robert B. Williamson; Joe H . Jones; Graham Blackstock. CONTENTS BUREAU OF BUSINESS RESEARCH ARTICLES Director: Stanley A. Arbingast Special Research Associate: Joe H. Jones 1: THE BUSINESS SITUATION IN TEXAS, by Joe H. Jones 3: THE INTERSTATE HIGHWAY SYSTEM IN TEXAS, by Assistant to the Director: Florence Escott Charles P. Zlatkovich Statistician: John R. Stockton 8: TEXAS CONSTRUCTION, NOVEMBER 1969, by William Consulting Statistician: Francis B. May Gruben Systems Analysts: Dennis W. Cooper, Richard Scamell TABLES Cooperating Faculty: Charles T. Clark, Lawrence L. Crum, William T. Hold, Jerry Todd, Ernest W. Walker, 2: SELECTED BAROMETERS OF TEXAS BUSINESS Robert B. Williamson 2: BUSINESS-ACTIVITY INDEXES FOR 20 SELECTED TEXAS Administrative Assistant: Margaret Robb CITIES Research Associates: James Blackburn, Graham Black­ 2: NONAGRICULTURAL EMPLOYMENT IN TEXAS: SELECTED stock, Willetta Dement, Margaret Fielder, William LABOR-MARKET AREAS Gruben, Gay Horak, Ida M. Lambeth, Robert M. Lock­ 5: URBAN INTERSTATE HIGHWAYS OF TEXAS wood, Ben McAndrew, Robert H. Ryan, Richard Wads­ 6: TEXAS INTERSTATE HIGHWAYS: ROUTE MILES AND POP­ worth, Charles P. Zlatkovich ULATION SERVED 7: TEXAS INTERSTATE HIGHWAYS: 1968 AVERAGE DAILY Research Assistant: Charlotte Hage TRAFFIC ON RURAL MILEAGE Statistical Assistants: Mildred Anderson, Constance Cool­ 8: AVERAGE ANNUAL RATE OF CHANGE IN NUMBER OF edge, Glenda Riley DWELLING UNITS CONSTRUCTED IN TEXAS INCORPO­ Statistical Technicians: Doris Dismuke, Mary Gorham RATED AREAS, 1961-1968 Computer Assistant.~: James Barry, Michael Coneway, 8: ESTIMATED VALUES OF BUILDING AUTHORIZED IN TEXAS Lawrence Dorr, Terry Throckmorton 10: LOCAL BUSINESS CONDITIONS Cartographers : P enelope Lewis, Jam es Weiler BAROMETERS OF TEXAS BUSINESS (inside back cover) Librarian: Merle Danz CHARTS Administrative Secretary: Jeanette Pryor 1 : TEXAS BUSINESS ACTIVITY Administrative Clerk : Nita Teeters 9: INDUSTRIAL PRODUCTION: DURABLE MANUFACTURES, Senior Secretaries: Susan Murphy, Elizabeth Vickers TEXAS Senior Clerk Typist: Sandra Jones, Martha Murray 9: INDUSTRIAL PRODUCTION: NONDURABLE MANUFACTURES, Clerk Typist : Susan Wood TEXAS Senior Clerk: Salvador B. Macias PHOTOGRAPHS Clerks: Edward Hildebrandt, Karen Schmidt, Patrosky Thomas 3: HEAVY TRAFFIC ON INTERSTATE HIGHWAYS Offset Press Operators: Robert Dorsett, Daniel P. Rosas 5: A REST AREA ON A TEXAS INTERSTATE HIGHWAY 6: MILEPOST ON A TEXAS INTERSTATE HIGHWAY COVER DESIGN BY CHARLOTTE HAGE 7: SOME SAFETY FEATURES OF A DIVIDED INTERSTATE HIGH­ Published monthly by the Bureau of Business Research, Graduate WAY School of Business, The University of Texas at Austin, Austin, Texas 7: FRONTAGE ROADS ON TEXAS INTERSTATE HIGHWAYS 78712. Second-class postage paid at Austin, Texas. Content of this pub­ lication is not copyrighted and may be reproduced freely, but acknowl­ MAP edgment of source will be appreciated. The views expressed by authors are not n ecessaril y those of the Bureau of Business Research. Subscrip­ 4: THE INTERSTATE HIGHWAY SYSTEM IN TEXAS tion, $4.00 a :rear: individual copies 25 cents. The Bureau of Business Research is a member of the Associated University Bureaus of Business and Economic Research. THE BUSINESS SITUATION IN TEXAS Joe H. Jones The soaring sixties are subsiding gingerly into the sev­ interest series as late as the 1967 downturn. Interest enties with an approach not unlike that of the unlavened rates continue to climb in the current period. With the to a steaming bath. The presumed therapeutic benefits of current continued weakening of employment and output the impending dip are viewed with a questioning ambiv­ in an economy with increasing consumer, wholesale, and alence reflected in the hesitant entry. capital prices, the economy is displaying an unprecedent­ Nationally, the partial returns for the fourth quarter ed conflict of demands. The conflict is no less evident in of 1969 show a slackening in man-hours worked in man­ questions of economic policy. A generalized easing of ufacturing, declines in industrial production, and lower­ monetary restraints undertaken with a goal of stimu­ than-usual increases in personal income. These indica­ lating employment and output would work in opposition tions of an economic turning point are being manifest to a generalized policy of inflationary control. A quandary without significant decreases in demand for investment is posed by economic problems for which the obvious cures capital or any evidence that price stability in consumer seem as unacceptable as the ills. and capital markets is approaching. In a late November report issued by the Subcommittee The postwar recession of 1948-1949 was "classical" in on Fiscal Policy of the Joint Economic Committee of the the sense that significant reductions were made in con­ Congress, recognition was gi\·en to the reductions in sumer and wholesale prices. The 1953-1954 recession was output and employment shown by leading indicators and not accompanied by reductions in the general level of the continued upward price pressures in consumer, whole­ either consumer or wholesale prices but price stability sale, labor, and capital markets. Disturbed by the dif­ was achieved. The 1957-1958 and 1960--1961 periods devi­ ferences of the current slide from previous economic ated from the preceding recessions in that neither price downturns, the Subcommittee expressed concern that "we reductions nor stability was effected, but price advances seem to face 'the far from pleasant prospect of continued slowed and significant reductions were made in the rate price-wage inflation at the same time as an inadequate of price increases for the period. rate of growth." Prices in capital markets, as measured by treasury­ In the period following the Second World War general bill rates and bank rates on short-term business loans, price adjustments downward were accompanied by in­ showed rather decisive declines in the recessionary peri­ creases in unemployment. No evidence suggests that price ods beginning in 1953, 1957, and 1960. Sensitivity to the stabilization can be achieved now without unemployment changing economic climate was registered by these two in the current period. l:ndesirable as employment de- TEXAS BUSINESS ACTIVITY Index Adjusted for Seasonal Variation-1957-1959=100 350 350 300 300 250 250 200 200 150 150 ~ kJ ·WW"" • - a.1 .... 1• .. • ·= w ::::.:: "' 100 100 50 50 0 0 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 NOTE: Shaded areas indicate periods of decline of total business activity in the United States. SOURCE: Based on bank debits reported by the Federal Reserve Bank of Dallas and adjusted for seasonal variation and changes in the price level by the Bureau of Business Research. JANUARY 1970 clines can be, and marked as they typically are by the financing plans based on bonded indebtedness of public disproportionate impact on marginally skilled labor in and quasi-public agencies operating under legislated in­ lower-income groups, the palliative effects of further em­ terest limits. The restraints of stringent monetary policy ployment declines will be doubly questionable if accom­ are being felt unevenly, however, as private commercial panying deflationary pressures are not generated. and industrial borrowing continues to climb in the face The soaring interest rates have imposed severe re­ of rates which are increasingly losing any prime qualities. straints on residential construction and on long-term In this context of divergent trends and divergent policy impulses recent state economic developments must be as­ SELECTED BAROMETERS OF TEXAS BUSINESS sessed. In this context fiscal and monetary policy moves (Indexes-Adjusted for seasonal variation 1957-1959= 100) can be expected to affect the future course of economic developments in the nation and in the state. Percent change A cyclical downturn in Texas is evident in nonagri­ Year-to- cultural wage and salary employment; and unemployment date Year-to- average covered under terms of state unemployment insurance has date Nov 1969 1969 shown an average cyclical increase throughout 1969. New Nov Oct average from from Index 1969 1969 1969 Oct 1969 1968 placements of manufacturing production workers de­ Texas business activity . 234.2• 278.7' 250.9 - 16 15 clined throughout 1969 to reach a plateau in the fourth Crude-oil production ... 114.5° 115.o• 113.6 f;f; 1 quarter of this year. Crude-oil runs to stills . 134.7 136.2 138.3 - I Contrasted with these declines in the employment indi­ Total electric-power use. 255.9• 249.9• 251.1 2 13 cators, have been continuing increases in the long-term Industrial electric-power use .. 22.8.3• 222.4• 220.9 3 11 trends of industrial use of electric power and in debits Bank debits ............ 268.2 317.7 283.0 -16 20 to demand deposits in Texas banks. The increases in in­ Urban building permits dustrial consumption of electric power can be interpreted issued .. 160.6 182.2 186.7 -12 5 as a continuing demand for efficient industrial inputs. Residential .... 149.9 122.6 148.8 22. -6 Nonresidential .. 169.8 269.7 247.4 -37 21 The upward trend in bank debits can be interpreted as Total nonfarm increasing demand for funds and transactions, and the employment .. 146.2• 145.4• 144.2 increasing pressure of price