Business Roundtable executives back off a bit on growth predictions…Purchasing managers say white-collar sector of economy expanding at faster rate…ExxonMobil and Enbridge consider new pipeline to bring Canadian crude to Gulf Coast…
This year won’t be as good for business as the nation’s top corporate execs had expected. In a survey by the Business Roundtable, the CEOs backed off on their growth projection for 2007. They now expect the Gross Domestic Product will expand by 2.6 percent–not the 2.9 percent they forecast in March. At the same time, though, most executives surveyed expect sales, capital investment and hiring to remain at current levels or be boosted in the coming months. Business Roundtable Chairman Harold McGraw, who also heads the McGraw-Hill Companies, says the survey suggests that “as long as consumers keep spending, the economy can continue to move ahead.”
Purchasing managers and executives say that the white-collar sector of the economy has been expanding at a faster rate. The Institute for Supply Management says its May index rose to 59.7 percent, rising nearly four points from April. Any number above 50 indicates growth. The report is stronger than expected. Employment in the services sector was also growing at a faster rate. Industries covered by the report represent about 80 percent of economic activity and span diverse industries including banking, construction, retailing, mining, agriculture and travel. May represents the 50th consecutive month of growth in the sector, marking a rebound from March when the index slipped to a four-year low.
Newly-released sales figures from R.L. Polk reveal a record number of alternative fuel automobiles being sold in the first quarter of 2007. More than 434,000 were sold nationwide in the three months—an increase of 27 percent over the same period last year. Sales of E-85 capable vehicles are up 40 percent; hybrid sales are up 31 percent; sales of clean diesel vehicles fell slightly. There are some 11 million alternative fuel vehicles on the nation’s roads. Sixty models of AFAs are on sale now, and more are in development.
Sugar Land-based Noble Corporation says it is conducting an internal investigation of its Nigerian operations and possible kickbacks given to customs agents by its Nigerian unit. Noble says it decided to investigate after New Orleans-based offshore oil services provider Tidewater began an investigation of similar payouts to customs agents in Nigeria.
Austin-based natural and organic food seller Whole Foods Market is challenging a Federal Trade Commission decision to block its pending acquisition of smaller rival Wild Oats Markets. Colorado-based Wild Oats says it’ll cooperate with Whole Foods’ challenge. The FTC plans to seek a temporary restraining order to prohibit the acquisition from proceeding. The FTC said previously that it was considering challenging the $565 million acquisition on anticompetitive grounds. But Wild Oats Chairman Greg Mays says his company and Austin-based Whole Foods will challenge any lawsuit–because they believe the merger will benefit the marketplace. FTC spokesman Mitch Katz says the agency has no comment. Whole Foods offered in February to acquire Wild Oats for about $565 million. It would also assume about $106 million in debt as part of the deal. Wild Oats has natural and organic food markets in the United States and Canada. Whole Foods has stores in the United States, Canada and the United Kingdom.
A joint study with a Ukrainian firm and Houston-based Marathon International Petroleum could lead to exploration and production in the Ukraine, according to the Houston Business Journal. National Joint Stock Company Naftogaz Ukrainy and Marathon will study north central Ukraine over the next three years. Ukraine is believed to have significant gas reserves of its own, but it lacks modern drilling equipment to develop new sources. Marathon is opening an office in Kiev in the ex-Soviet republic.
ExxonMobil and Canada-based Enbridge announced they’re looking at building a new pipeline. The line would provide another avenue for growing Canadian crude supplies to reach the U.S. Gulf Coast refining region. The pipeline would transport crude from a storage hub in Patoka, Illinois, to Beaumont and onward to Houston. The companies have been in discussions with potential shippers of Canadian crude about the scope, timing and value of the project. The line is targeted to be in service by the end of 2010. Irving-based ExxonMobil last year began pumping Canadian crude directly to the Gulf of Mexico through a reconfigured 2,300-mile pipeline network. The line created an alternative to long tanker trips. To reconfigure the pipeline, ExxonMobil reversed the flow of an inactive pipeline segment from Corsicana to Patoka.
Houston-based LipidLabs will distribute the SpectraCell Lipid Analysis test in Wal-Mart mini-clinics operated by Intrepid, according to the Houston Business Journal. The test determines the need for treatment due to high cholesterol in the blood. LipidLabs developed and sold the test to Houston-based SpectraCell Laboratories last year.
Ezilon.com has expanded its localized directory service to China, according to the EM>Houston Business Journal. The Houston-based search engine said the new director is an effort to expand its services to China’s rapidly-growing population of Internet users. The new site provides business, residential and other information for China and other countries where the Chinese language is widely spoken. Ezilon.com is a subsidiary of Houston-based Web directory and search engine company Mbrasilla Telecommunications.
Asarco has bankruptcy court approval to pay up to $11.3 million in extra wages and bonuses to keep salaried workers. The Arizona copper-mining company is trying to keep employees from heading for competitors. U.S. Bankruptcy Court Judge Richard Schmidt in Corpus Christi this week ruled the company can adjust worker salaries and increase its bonus pool. Asarco says–since January of 2006–it has lost more than 120 skilled employees. Those workers have been drawn to competitors offering salary raises of up to 30 percent. Asarco, which weathered a 2005 strike, said a bonus plan approved by the bankruptcy court in April of 2006 hasn’t kept pace with record high copper prices and the tighter job market. Asarco has been operating in Chapter 11 protection since August of 2005. Asarco is a unit of Grupo Mexico.
The state plans to study the possibility of closing the century-old Central Unit prison near Sugar Land. The Sugar Land Regional Airport next door is considering an expansion and residential development is encroaching on the prison. The study of the Central Unit is included in a bill passed this legislative session dealing with continued operations of the Texas Department of Criminal Justice. The bill is awaiting Governor Rick Perry’s signature. The Central Unit is an all-male maximum security prison opened in 1909 on the Imperial Farm Sugar Plantation. It’s been whittled down over the years to 336 acres, including the fields tended by inmates. The bill calls for a feasibility study of closing the Sugar Land prison and moving its operations to a different location. State Senator John Whitmire of Houston say a prison isn’t the best use of the desirable property.
Drilling rigs are rising over Fort Worth golf courses, churchyards–even tree-lined neighborhoods. But the Associated Press reports not everyone is celebrating the natural gas bonanza, despite the 55,000 new jobs for the north Texas economy. Residents are worried about the drilling and extraction noise, truck traffic, decreased property values and possible explosions. Don Young founded Fort Worth Citizens Against Neighborhood Drilling Ordinance. Young says if people weren’t getting money, nobody would want this. Fort Worth initially allowed gas wells within 300 feet of homes but recently extended the boundary to up to 1,000 feet–after getting noise complaints. Fort Worth Mayor Mike Moncrief says the ordinance aims to protect the safety of residents and quality of life during what he calls a “once-in-a-lifetime” opportunity. Larry Dale is head of Fort Worth-based Dale Resources, which has secured about 35,000 leases for Chesapeake Energy. Dale says that once the process is explained to homeowners, they figure, “it won’t affect me and I’ll make some money. Why wouldn’t I do it?”
Houston-based Caldwell Watson is changing its name to Caldwell Companies. Caldwell began in 1990 as a commercial brokerage focused on industrial and land transactions, then entered the office, property management, development and investment services business. It’s first residential community—Wincrest Falls in northwest Houston—was started in 1996. It’s now involved with Towne Lake and Rock Creek in northwest Houston and Remington Square on Beltway 8 and Highways 290 and 249. Caldwell is also involved in Roundup Business Park near Remington Square.