El Paso's economy will perform well in the next two years -- growing faster than the national economy -- thanks in part to continued expansion at Fort Bliss.
That's the assessment of Tom Fullerton, a UTEP economist and co-author of the recently released "Borderplex Economic Outlook: 2006-2008."
"El Paso is doing well relative to the nation as a whole, even though lagging a little bit behind the Texas economy as a whole," Fullerton said. That trend is expected to continue for the next two years, he said.
"Fort Bliss is providing a shot in the arm to the El Paso economy," and military employment is "one of the most, if not the most, rapidly expanding segments of the El Paso economy," Fullerton said.
Steven Sambrano, president of SamCorp, one of El Paso's largest general contractors, said he agrees with Fullerton's assessment.
"I expect strong growth" for the construction industry in coming years due to Fort Bliss expansion, with demand increasing for schools, stores and other development to handle the population increase, Sambrano said.
The Fort Bliss troop population is projected to grow more than 4 percent a year in the next two years, reaching more than 15,000 in 2008, the UTEP forecast shows. That's the largest post population since 1994, Fullerton reported.
But the UTEP troop forecast, which, Fullerton said, came from data reported by the Department of Defense, is below Fort Bliss' numbers. The post reports a current troop population of more than 16,000. Army officials have said more than 19,000 troops are expected to arrive at Fort Bliss in the next five years.
El Paso's job growth rate, which has been lagging the state's rate this year, is expected to be slightly ahead of the statewide rate in 2007 and 2008, the UTEP forecast shows.
But El Paso is expected to be behind the state in two other key economic measures: economic output and total personal income growth.
El Paso's economy, as measured by total personal income, is expected to expand from an estimated $17.5 billion this year, to a projected $19.7 billion in 2008, the UTEP forecast shows.
El Paso's per capita income will continue to lag well behind the state and nation incomes, reaching $26,220 a person in 2008, the forecast shows.
Per capita income in Texas is expected to reach $37,873 in 2008 and $39,806 in the United States, according to a forecast from Global Insight, a Boston economic forecast firm, and reported by Fullerton.
El Paso's economic output is projected to grow at 3.1 percent and 3.2 percent in the next two years -- about the same pace as in the last two years -- the UTEP forecast shows.
Statewide economic growth is projected to be 3.2 percent and 3.5 percent in the next two years, and national growth at 2.4 percent and 3.1 percent, according to Global Insight's forecast.
Despite Fort Bliss' boost, Fullerton is projecting a slight decline in housing starts in the next two years, but, he said, El Paso won't see the sluggish housing markets now being seen in some areas of the country.
Slightly higher mortgage interest rates and higher housing prices will reduce the number of buyers, he said. However, Fullerton foresees a slowdown in the rapid increase in housing prices experienced in El Paso in the past two years.
Mike Santamaria, vice president of Mountain Vista Builders and incoming president of the El Paso Association of Builders, a home builders group, said he doesn't foresee housing starts decreasing in the next two years.
"With the influx of troops and people coming with them, I can't see how we won't increase," Santamaria said.
A shortage of home lots held back housing construction this year, but more land is being developed and more lots are "going to come on line in 2007 and 2008," Santamaria said. "If we have the lots, we'll have more starts."
Retail sales are expected to grow more than 3 percent next year and more than 4 percent in 2008 -- reaching a projected $8.8 billion in 2008. Retail sales were $7.9 billion in 2005, the UTEP data show.
Restaurants and bars are expected to lead retail growth in the next two years, benefiting from increased household spending on eating out, Fullerton said.
Dining establishment sales are expected to reach almost $887 million in 2008, up from almost $743 million in 2005.
Jim Gore, president of the companies that own and operate eight Applebee's and 10 Village Inns in El Paso and Las Cruces, said some of the growth in El Paso's restaurant industry will come from new restaurants entering the market.
"Overall, sales will be strong" in the El Paso restaurant industry, Gore said. Fort Bliss expansion should help the industry, he said.
Gore expects his restaurants to increase sales more than 5 percent a year in the next two years. His companies may add one or two new restaurants on the far East Side next year, he said.
"The only thing that can impact us and other (existing) restaurants is if a large influx of competitive restaurants" entered the market, Gore said. "If too many new restaurants open, it will impact existing restaurants."