Commerce Department reports 3.5 percent growth in fourth quarter…Grubb & Ellis expects increase in office rent, but not by as much as last year…Sofitel Hotel acquired by joint venture…
The economy was buzzing along as 2006 drew to a close. The Commerce Department says fourth-quarter growth expanded at an annual rate of three and a-half percent. That’s stronger than expected and suggests the slowdown in the housing market wasn’t dragging down the broader economy. It is also well improved from the sluggish two percent pace seen in the third quarter of last year. For all of 2006, the Gross Domestic Product increased by 3.4 percent. That’s just above the pace seen in 2005.
The Labor Department says employers’ costs to hire and keep workers moderated in the fourth quarter. Wages and benefits rose eight-tenths of one percent in the October-to-December period. That’s down from a one-percent gain in the third quarter. Economists were expecting the employment cost index to rise one percent in the fourth quarter. Labor costs are watched closely for any signs of rising inflation pressures.
Hourly wages for highly-skilled technology professionals were higher by the end of the year compared to the same period in 2005, according to the latest Yoh Index of Technology Wages. The quarterly compensation index is used by Fortune 500 companies to determine salary. Technology wages experienced a 1.2 percent increase by mid-quarter, and ended in December with a 3.1 percent increase.
Grubb & Ellis expects that office rent will increase this year, but not by as much as increases in 2006. Rents could jump by as much as six to eight percent for Class A office space. Houston posted the third-largest increase nationwide in office rents last year, increasing an average of 16.5 percent.
Governor Rick Perry says Texans deserve a budget that makes sense. Perry offered budget reform proposals that he says are meant to promote fiscal responsibility and transparency in state government. The list includes: a truth in spending initiative that ends accounting “gimmicks” such as delayed payments. Dedicated funds would have to be used as intended, or refunded to taxpayers; imposing a stronger spending limit on state government; having detailed budget line items, instead of lump sum line items; requiring all Texas agencies to publish expenditures online in a clear and consistent format. Perry says Texas has a record budget surplus, so it’s time to make one-time payments to reconcile past accounting maneuvers and accurately balance the budget. The governor also says expenditures made by his office are available to view online.
The Houston Sofitel Hotel on North Houston Parkway East has been acquired by a joint venture between The Carlyle Group and Davidson Hotel. The 334-room hotel was sold by Paris-based Accor Worldwide. A $12 million renovation is planned, including exteriors, room refurbishment and renovation of public areas.
A 250-room Westin hotel is being built near Memorial City Mall—the first of three new Starwood hotels planned for west Houston, according to the Houston Business Journal. The upscale Westin will include 65 condominiums. It will be part of a 200-acre development of office, retail, residential and hospitality properties. MetroNational is converting the 170-room Radisson Suite Hotel Houston West at I-10 and Beltway 8 in The Four Points by Sheraton Houston.
The Greater Houston Convention and Visitors Bureau is welcoming 27 conventions, trade shows, events and other meetings to the city in February. More than 9,780 attendees will spend an estimated $9.5 million in Houston. The Whataburger National Convention & WhataGames Finals will be held February 12th through the 19th at the Hilton Americas-Downtown. The Environmental Systems Research Institute’s Petroleum User Group 2007 is slated for February 25th through the 27th at the Houston Marriott Westchase. And Pennwell has its Subsea Tieback Conference & Exhibition at the Moody Gardens Hotel February 21st through March 1st.
Foreigners are apparently deciding to vacation in places other than the U.S. New Commerce Department figures show fewer overseas visitors are coming to America since 9-11. And that’s despite a government initiative announced a year ago, as well as a cheaper dollar. Tourism is big business. The Travel Industry Association figures international visitors contribute more than $1 trillion to America’s economy, and keep more than 7 million people working. Senator Byron Dorgan, who chairs a panel investigating the issue, says a big problem is getting a U.S. visa. People have to apply in person at a consular office, and in many countries, that’s a big trip. The wait for an appointment can also run more than a month.
Norway has joined the U.S. and five other nations in signing up for the production and support phase of building the F-35 stealth fighter jet. The plane’s main contractor–Lockheed Martin–is assembling and testing the jet in Fort Worth. Great Britain, Canada, the Netherlands, Australia and Turkey are the others moving past the development and demonstration phase of the F-35.
A chlorine manufacturer in St. Gabriel, Louisiana, says it will eliminate its use of mercury-based technology as part of an expansion, according to the Houston Chronicle. Houston-based Pioneer Companies will stop using mercury-membrane technology by the end of 2008.
Don’t forget to claim the telephone tax refund when filing federal tax returns this year. The IRS says more than a third of those filing early have missed the one-time refund of at least $30. The government stopped collecting the long-distance excise tax in August, and has authorized a refund of taxes collected on bills from March of 2003 to July of last year. Those who claim a standard refund, which requires no documentation, will receive between $30 and $60. Those who choose to make claims on the actual amount they paid need to have documents in case the IRS asks questions, but the documents do not have to be sent with the return. The notice follows a warning from the IRS last week that it would take action against taxpayers who claim too much.
A federal court in Raleigh, North Carolina, has ordered a satellite television company to pay up. It’s ordering Arlington-based TNT DBS marketing to pay $676,000 for tying up a hospital’s phone lines with pre-recorded telemarketing calls. Word of the payment comes from North Carolina Attorney General Roy Cooper. The federal judge agreed this week with Cooper’s request for the judgment and a permanent injunction. It bars the marketer from making illegal telemarketing calls to North Carolina consumers. TNT must pay $275,000 in damages to Davie County Hospital in Mocksville, North Carolina, for 400 calls it made to the hospital during two days in early 2004. Part of the money also goes to a Morganton, North Carolina, auto parts maker for tying up its 150 phone lines in December 2003. The court also orders TNT to pay $401,500 for illegal prerecorded telemarketing calls it made to more than 80 North Carolinians. That money goes to public schools in the state.
Tulsa, Oklahoma-based Dollar Thrifty Automotive Group has expanded its Rent A Toll Pass24 prepaid toll service to Houston. Five Dollar Rent A Car and nine Thrifty Car Rental locations in the Houston area will sell the pass for $8.95 per day, allowing use of toll road express lanes without having to have exact change on hand.
A Houston-based regional airline says it’s adding non-stop regional airline service at airports in Tulsa and Oklahoma City and 22 other cities. ExpressJet says it will announce later which destinations to which it’ll be offering the non-stop flights. But it intends to fly to cities that don’t currently have non-stop flights. The flights will be from Tulsa International Airport and Will Rogers World Airport in Oklahoma City. ExpressJet is an affiliate of Houston-based Continental Airlines and currently flies to 152 destinations in the U.S., Canada, Latin America and the Caribbean and uses 50-passenger regional jets.
Houston-based ConocoPhillips has reorganized its technology and major projects organization into separate groups. The technology group is responsible for creating strategies and finding business development opportunities. The project development group will retain oversight of the engineering, construction and procurement activities related to ConocoPhillips projects.
Irving-based Exxon Mobil will explore for gas in the Barnett Shale by forming a joint venture with Harding in an eight-county area of north Texas. Details were announced by Exxon subsidiary Metroplex Barnett Shale and Harding’s Cinco County Barnett Shale. They formed D.D. Jet Limited on December 20th. The companies say the joint venture will produce and sell Barnett Shale gas through an existing pipeline network. The joint venture will explore in Tarrant, Johnson, Ellis, Dallas, Denton, Collin, Navarro and Hill Counties. The subsidiary of Exxon Mobil will be general partner and operator of the gas venture. Dallas-based Harding will handle lease acquisition and permitting. Harding operated an earlier venture that gained permits for the first gas wells in several cities including Arlington, Grand Prairie, North Richland Hills and Midlothian.
The White House is looking to cut $18 billion in farm payments over the next five years. Officials say they’re not trying to make major changes to the farm subsidy program. But the administration would like to do away with payments to wealthy producers. It also proposes capping subsidies to those making under $200,000 a year in adjusted gross income. The current farm bill expires at the end of the year. The plan being proposed would cost roughly $18 billion less.
It was only two years ago that Panhandle farmer Dee Vaughan started planting cotton. But high prices from demand for ethanol will have him and other west Texas producers of the fluffy fiber growing more corn this year. Vaughn–a former president of the National Corn Growers Association–says that in the past two years, corn prices have risen about 40 percent, or as much as $1.50 a bushel. He says U.S. corn growers were expected to plant as many as 90 million acres this year, up as much as 12 million from last year. Demand for ethanol, a biofuel made from corn starch, is surging as the country looks for alternatives to oil and ethanol plants pop up across rural landscapes.