/ April 1972 Bureau of Business Research • The University of Texas at Austin TEXAS BUSINESS REVIEW VOL. XL VI, No. 4, APRIL 1972 Editor, Stanley A. Arbingast; Associate Editor, Robert H. Ryan; Managing Editor, Kathleen Luft Editorial Board: Robert H. Ryan, Chairman; Stanley A. Arbingast; John R. Stockton; Francis B. May; Robert B. Williamson; Kathleen Luft. CONTENTS Articles 73 : The Business Situation in Texas, by Francis B. May 76: Texas Magnesium in the 1970's, by Robert T. Muzny, Jr. 81 : Texas Construction, by Robert M. Lockwood Tables 74: Selected Barometers of Texas Business 74: Number of Giant Texas Oil Fields by Period of Discovery 75: Texas Labor-Force Trends 79: Domestic Consumption of Primary Magnesium, by Uses 80: Magnesium Output 82: Estimated Values of Building Authorized in Texas 82: Number and Type of New Housing Units Authorized Quarterly in Texas, 1967-1971 83: Cumulative Total and Per-Capita Value of All Con­struction Authorized in Texas, by Standard Metro­politan Statistical Areas, 1967-1971 and 1970-1971 84: Local Business Conditions Barometers of Texas Business (inside back cover) Charts 73 : Estimated Personal Income, Texas 74: Crude-Oil Production, Texas 74: Industrial Electric-Power Use, Texas 75: Total Unemployment, Texas 82: Total Building Authorized, Texas Figures 77: Area Surrounding Dow Magnesium Plants, Freeport and Velasco, Texas 78: Dow Seawater Process of Magnesium Production BUREAU OF BUSINESS RESEARCH Business Research Council : James R. Bright, Abraham Chames, Lawrence L. Crum, Jared E. Hazelton, George Kozmetsky Director: Stanley A. Arbingast Assistant to the Director: Florence Escott Statistician: John R. Stockton Consulting Statistician: Francis B. May Sy stems Analyst: David L. Karney Cooperating Faculty : C. P. Blair, Charles T. Clark, Law­rence L. Crum, Clark C. Gill, William T. Hold, Gary L. Holstrom, Robert K. Holz, Jerry Todd, Ernest W. Walker, Robert B. Williamson Administrative Assistant: Margaret Robb Research Associates: Earlene Call, Ida M. Lambeth, Robert M. Lockwood, Kathleen Luft, Carroll Mohn, Robert H. Ryan, Barbara Terrell, Charles P. Zlatkovich Research Assistants: Alfonso Bedoya, Nicanor Gutierrez, Ed­ward Hildebrandt Computer Programmer: Marilyn C. Smith Statistical Associate: Mildred Anderson Statistical Assistant: Constance Cooledge Statistical Technician: Kay Davis Cartographer: Charles W. Montfort Librarian: Merle Danz Administrative Secretary : Mary Ann Gready Administrative Clerk: Margaret Eriksen Senior Secretary: Linda Brenner Senior Clerk Typists: Deborah Gozali, Nancy Jean Inch Senior Clerks: Robert Jenkins, Salvador B. Macias Clerk: Robert Deane Offset Press Operators: Robert Dorsett, Daniel P. Rosas Published monthly by the Bureau of Business Research, Graduate School of Business, The University of Texaa at Austin, Austin, TeXll 78712. Second-class postage paid at Austin, Texas. Content of tbil publication is not copyrighted and may be reproduced freely, but acknowledgment of source will be appreciated. The views expreued by authors are not necessarily those of the Bureau of Busin• Research. Subscription, $4.00 a year; individual copies 35 cents. Reprints of feature articles are available from the Bureau at ten cents each. The Bureau of Business Research is a member of the Association for University Business and Economic Research. THE BUSINESS SITUATION IN TEXAS Francis B. May February saw a continuation of the slow rise in estimated personal income in Texas. The 1-percent increase in the index matched the January increase, and the January-February average value of the index was 11 percent above the same period of 1971. A comparison of the January-February average values of the consumer-price index for 1971 and 1972 shows an increase from 119.3 percent to 123.5 percent, a 3.5-percent rise in the two-month average. That increase means that the purchasing power of personal income rose approximately 7 percent during the one-year period. Not all consumers enjoyed this increase: only those whose bargaining posi­tions enabled them to advance their incomes at a rate better than 3.5 percent were better off economically. Retired persons and others on relatively fixed incomes saw a further erosion of their standards of living, even though the rate of deterioration slowed. Protection of the economic position of these persons depends on the success of Phase II and whatever comes when Phase II ends: Phase III of continuing price controls or a return to the essentially unregulated condition of prices before Phase I began. The history of those nations which have resorted to price controls for periods of many years is not encouraging. Price controls maintained for long periods of time induce stresses and strains which produce misallocation of re­sources. They also produce black markets which impair the effectiveness of normal channels of trade. Widespread evasion of controls can result, with the concomitant massive enforcement problems requmng an army of price inspectors, review panels, and other special enforcement machinery. All these stratagems represent an effort to control the symptoms rather than, by elimination of those economic conditions which make for downward flexibility of prices, remove the institutional arrangements which produced the galloping price rises. During the post-World­War-II years the periods of decline of the consumer-price index have been few, while the periods of rising prices have been many. The fruits of increased productivity have not been passed on often enough to consumers in the form of lower prices. We must begin to find ways to ensure that the consumer benefits more often. The index of business activity rose to 160.3 percent of its 1967 base value. This 3-percent increase over January placed the index at a level slightly below its November 1971 peak of 161. 7 percent. Total activity, as measured by this index, was 12 percent above the January-February 1971 period. The index is broadly based : it is computed from total charges to checking accounts, adjusted for price changes and seasonal variation, and it takes into account all transactions settled by check payments, such as retail and wholesale sales, real-estate sales, and securities sales. Crude-petroleum production increased 6 percent in February. At 111.6 percent of its 1967 base value, the index was at its second-highest February value in more than a decade. The February 1971 index-112.9 percent-was the highest February value for the period which began in ESTIMATED PERSONAL INCOME, TEXAS Index A.djualed for Seaaonal JIariation -1967=100 - SOURCE: Quarterly measures of Texas per.onal income made by the Office of Business Economics, U.S. Department of Commerce. Monthly allocations of quarterly measures, and estimates of most recent months, made by the Bureau of Business Research with regression relationships of time, bank debits, and insured unemployment. APRIL 1972 CRUDE OIL PRODUCTION, TEXAS IHI "" 1960 lffl 1ft2 lftJ 1'6' lfH ltH 1'67 IHI 1'70 lt71 1972 It.. 19 5 7. In response to increased demand for oil of Texas origin, the Texas Railroad Commission has set April production at 100 percent of allowable. This is the first time since 1948 that the allowable has been set at 100 percent. Since that time the highest allowable set has been 87 .3 percent in November 1970. The chairman of the Railroad Commission estimated that production at full 100-percent allowable will be common in the future because of increasing demand and the declining levels of oil reservoirs. Most of Texas' large oil fields were discovered many years ago, and not enough new reservoirs are being found in the state to make up the deficit. Of the ninety-seven giant oil fields which have been discovered in Texas, the most recent is the Fairway field, discovered in 1960. The oldest is the Spindletop, discovered in 1901. The largest is the East Texas field, discovered in 1930. Numbers of fields by discovery periods are shown in the following table: NUMBER OF GIANT1 TEXAS OIL FIELDS BY PERIOD OF DISCOVERY, 1900-1972 Period Number of fields 1900-1904 2 1905-1909 2 1910-1914 1 1915-1919 4 1920-1924 6 192 5-1929 18 1930-1934 17 1935-1939 21 1940-1944 9 1945-1949 10 1950-1954 5 1955-1959 1 1960-1964 1 1965-1972 Total 97 A giant field is one estimated to contain approximately 100 million or more barrels of recoverable oil. Source: Oil and Gas Journal, various issues. During the period of large numbers of discoveries of giant fields, a period which lasted from 1925 to .1949, seventy-five giants were discovered. Only two have been discovered since 195 5. The last of these giants, Fairway, SELECTED BAROMETERS OF TEXAS BUSINESS Ondexes-Adjusted for seasonal variation-1967=100) Percent change Year-to­ date Index Feb 1972 Jan 1972 Year-to­date average 1972 Feb 1972 from Jan 1972 average 1972 from 1971 Estimated personal income 150.1P 148.lP 149.1 1 11 Business activity 160.3 155.8 158.1 3 12 Crude-petroleum production Crude-oil runs to stills 111.6p 105.4p 112.5 115.4 108.5 114.0 6 3 -5 •• Total electric-power use 165.5P 154.oP 159.8 7 20 Industrial electric- power use 149.8P 140.4P 145.1 7 15 Bank debits 188.1 181.2 184.7 4 17 Urban building permits issued 212.4 159.9r 186.2 33 40 New residential 236.7 183.9r 210.3 29 37 New nonresidential (unadjusted) 205.4 140.9r 173.2 46 48 Total industrial production 126.5p 125.9p 126.2 •• 5 Total nonfarm em­ployment 11 5.3P 115.3P 115.3 •• 2 Manufacturing em­ ployment 108.2P 105.9P 108.6 1 1 Total unemployment 158.1 169.9p 164.0 7 9 Insured unemployment 154.0 167.4 160.7 8 -19 Average weekly earn- ings-manufacturing 126.7p 127.4p 127.1 5 Average weekly hours-manufacturing 98.3p 99.2p 98.8 •• P Preliminary. r Revised. • • Change is less than one half of 1 percent. was discovered in 1960, more than a decade ago. Eighty of these fields, discovered prior to and during World War II, were called upon to produce very heavily during the war in order to supply oil for the war effort of this country and its allies. Unless exploration revives to the point of discovering new giants, no possibility of large production exists for the future. Crude-oil runs to stills declined 3 percent in February. At 112.5 percent of its 1967 average value, the index was 1.3 percent above February 1971. The February decline held this index at the January-February 1971 average level. Total electric-power use in Texas rose 7 percent in February. Industrial power use rose by the same percent- INDUSTRIAL ELECTRIC-POWER USE, TEXAS '-"u AtlJ••••tl /•• .!eaH••I Yut••l•a-lt•7•1t• 2••c---r--irmmr---r--r-r-.--.-.-.,.--r-"'Tl!mm-..,--..200 ~ l§lj~ 1'0fl.:l"'. ---t--t-i:ffii!• -t--,-ti!i[lilfilif--~-!r--IUO Af !---t---t--t--t-----t-----t--+...-l@fil _§!iiol 100 ~ ~---100 H~~. ,___ !--!---t-i!\ll~~-:::::;;:b--t_,,'F--+-t--l--1-­ ··~@~· Ji!l~1:f ~:'.'.':'f:_+---1---1--+-i--+ -i-,__ ~~~~ ­ .. 0 ~ ~ i , w. 19U 1'59 1960 1'61 1962 1963 1'6• 196' 19H 1967 1961 1969 1970 1971 1972 O TEXAS LABOR-FORCE TRENDS (Annual averages-shown in thousands) Percent change Category 1960 1965 1970 1971 1960-1971 1970-1971 Civilian labor fo rce 3,60 1.2 3 ,987.6 4,690.0 4,752.3 32.0 1.3 Unemployment 190.0 168.4 167.8 198.8 4.6 18.5 Percent unemployed 5.3 4.2 3.6 4.2 - 20.8 16. 7 Involved in work st oppages 0.7 3.6 3.2 3.0 328.6 6 .3 Total employment 3,410.5 3,81 5.6 4,519.0 4 ,550.5 33.4 0.7 Employed in agriculture 343.0 330. 1 294.8 288.5 -15.9 2.1 Employed in nonagriculture 3,067.5 3,485.5 4 ,224 .2 4,262.0 38.9 0.9 *Self-e mployed 53 5.8 560.2 587.9 59 1.0 10.3 0.5 Wage and salary employment 2,5 3 1.7 2,92 5.3 3 ,636.3 3,6 7 1.0 45.0 1.0 Manufacturing 4 89.5 574 .2 740.9 71 2.7 4 5.6 3.8 Nonmanufac turing 2 ,04 2.2 2,35 1. l 2,89 5.4 2,9 5 8.3 44.9 2.2 • Includes proprietors, members of unincorporated firms, self-employed, unpaid family, and private household workers. Source: Texas Employment Commission. age. Total power use and industrial power use both rose sharply during the last half of 1971. These rises, added to the February gain, lifted the two indexes substantially above their January-February 1971 average values. Total power use was 20 percent higher. Industrial power use was 15 percent higher. Part of this total power use increase is due to the rapid growth of the residential market for electricity. Home consumption of electricity has trebled since 1955. Per capita use in the home has grown at three times the average rate for either disposable personal income or population in general. As our supplies of oil and natural gas diminish, industrial use of electricity will increase, as a substitute for energy from mineral fuels which are no longer available. Atomic energy will generate the electricity. The construction industry continues to be the brightest part of our lethargic economic recovery. Boosted by a 29-percent rise in residential permits and a 46-percent rise in nonresidential, the index of total building permits in Texas rose 33 percent in February. This jump placed the January-February average value of the index 40 percent above the corresponding 1971 period. During the recovery from the brief 1969-1970 recession, residential building has risen strongly because of pent-up demand which accumu­ lated during the 1969-1970 period of greatly reduced housing starts. A more abundant supply of mortgage money has made this increase in the supply of new homes possible. Forecasted home construction in the nation this year is approximately 2.2 to 2.4 million units, provided the necessary financing continues to be available. Total nonfarm employment in Texas in February was unchanged from the January level. The average value of the index for the first two months of the year was 2 percent above the first two months of 197 l . Manufacturing employment was off l percent in February, the decline leaving the two-month average value of the index only 1 percent above January-February of last year. The slow increase in the level of employment has been one of the less satisfactory aspects of the recovery from the 1969-1970 recession. Examination of the chart of total nonagricultural employment in the state shows that the index has been on a\ virtual plateau since the last quarter of 1969. While the nature of the problem varies from region to region of the APRIL 1972 nation, the problem in Texas is due in large part to heavy cutbacks in employment in the aircraft and parts industry. Employment in that industry in February was down to 39, 700 workers, 12,800 below the February 1971 figure. Increases in employment in other industries have been large enough to produce a small increase in total employment, but nothing more. Total unemployment and insured unemployment both declined substantially in February. These declines reduced the average values of these indexes considerably below their year-ago levels. These large declines in unemployment produced no corresponding increase in employment be­cause total unemployment in the state is numerically small, in comparison with total employment. Of a total labor force of 4,739,500 workers in Texas, only 3.7 percent, or 175,000, were unemployed. This small percentage rate is no comfort to the unemployed, but it does explain why substantial percentage declines in unemployment produce small increases in the percentage employed. The outlook in Texas and the nation is for a continued slow rate of recovery. Any effort to speed the rate by an easier money policy or by increasing the present enormous federal deficit carries a threat of aggravation of our persistent inflation problem. TOTAL UNEMPLOYMENT, TEXAS h 4u A4J••l•4 /•r 5••••••1 J'arlariea-lf61•Jlf SOURCE. TnHEmpkly.,.•11Commiaion. D111adju11edror•-.l•arl.lio11by•hclwnuor1--ae.wdl. NOTE S!Yded attH ondicatc puiodt o( dcduoc of IOUI blow11c:n 1C1iQy M llM: Unlll'd St11ei. Spring crop prospects are good for most areas of Texas. Ample subsurface moisture has sustained the wheat crop through early spring. Surface moisture, adequate for present needs, is being depleted rapidly by warm , dry weather. 75 TEXAS MAGNESIUM IN THE 1970'S Robert T. Muzny, Jr. The Texas magnesium industry, in the thirty-two years since its origin in 1940-in response to Hitler's advancing armies in Europe-has developed rapidly, expanding pro­duction to meet the increased demands for magnesium for industrial, consumer, and defense needs. Texas plants now produce more than 50 percent of the total output of magnesium in the world. Historical Perspective on the Texas Magnesium Industry The Dow Chemical Company had produced magnesium in Midland, Michigan, since 1916; but the demand for primary magnesium for use in airplane production by the British Government during the conflict with Hitler's Luft­waffe, the demand for magnesium by the United States Government because of an increase in airplane production, and the inability of the plant in Michigan to produce the necessary amount of magnesium influenced Dow to con­struct a Texas Gulf Coast plant that would produce basic chemicals, particularly magnesium. The availability of power, raw materials, an adequate labor supply, inexpensive construction costs, and a deep-water harbor location caused Dow in 1940 to choose Freeport, Texas, as the site for the plant. This magnesium and basic-chemical plant, completed in January 1941, was designed to produce 1000 pounds of magnesium per cell per day, or a total of approximately 50,000 pounds per day. In March 1941 the Defense Plant Corporation contracted with Dow to build a 72,000,000-pound plant for the government at Velasco, Texas, only a short distance from Freeport. During the war years Dow produced a large proportion of the magnesium output in the United States. In 1942, for example, a critical year of magnesium production, Dow provided 84.2 percent 1 of all magnesium output in the country . From 1945 to 1947 the market demand for magnesium was reduced, but Dow continued to stockpile magnesium ingots. This situation was relieved when Dow magnesium plants began to produce magnesium for parts in long-range bombers and incendiaries for the U.S. Department of Defense in the Korean War. In the period 1950-1970 the demand for magnesium for industrial and consumer uses, in addition to defense uses, resulted in the growth of Dow's magnesium operations. 2 *Mr. Robert Muzny is a graduate student in the Department of Geological Sciences at The University of Texas at Austin. The author wishes to thank Dr. Stanley A. Arbingast, Mr. K.M. Tolleson, Mr. W.A. Rollwage, and Mr. Chives W. Evans for their assistance in the preparation of this article. 1 Don Whitehead, The History of the Dow Chemical Company (New York: McGraw-Hill Company, 1968), p. 1 79. 2Jbid., pp. 156-180. A small percentage of Texas magnesium was produced by the American Magnesium Company of Tulsa, Oklahoma. The plant is located near Snyder, in an area which has an abundance of underground brine, available power, and a labor supply. American Magnesium first produced primary magnesium in early 1969, 3 and the plant was shut down in April 1971. Location and Raw-Material Base of Dow and American Magnesium The Dow Chemical Company selected the Freeport area as the site for its two magnesium plants because of the Brazos River harbor location and the availability of seawater as a basic source of magnesium, natural gas for power, oyster shells for the manufacture of lime used in producing magnesium, brine for the manufacture of chlor­ine and acid, and fresh water for cooling purposes.4 The first magnesium plant was located on a horseshoe­shaped tract of land adjoining the old Brazos River ship channel, a thirty-two-foot-deep harbor with turning basins, created in 1929 by United States Government engineers when the turbulent Brazos River was diverted above its mouth. The second plant-at VelascoTexas-is connected 5 to the harbor by a man-made channel. The basic raw material in the production of magnesium is warm, highly saline seawater from the Gulf of Mexico. The obtainability of magnesium from seawater, which is readily available in great supply, is a significant economic advantage to Texas. About 6 million tons of magnesium are present in each cubic mile of seawater, and approximately 320 million cubic miles of seawater exist on the earth.6 Chemical analysis shows that magnesium ion in undiluted seawater consists of 1272 ppm, the equivalent of approxi­mately 12 billion lb/cu mile. Natural gas, brought through pipelines from gas fields and recycling plants within a radius of thirty miles, is the source of energy from which Dow magnesium plants derive enormous quantities of electrical power for releasing magnesium and chlorine in electrolytic cells. Oyster shells converted to lime and mixed with seawater to produce magnesium hydroxide are brought by barge from Galveston Bay, approximately forty miles from the plant. During periods of oyster-shell shortages, Dow purchases lime from Texas lime producers. Brine, used for 3 F.F. Netzeband and Roselle M. Girard, "The Mineral Industry of Texas in 1967," Minerals Yearbook 1967 (Washington, D.C.: U.S. Government Printing Office, 1967), p. 43. 4wmiam H. Gross, "Magnesium Alloys, Encyclopedia of Chemical Technology, 12 (New York: John Wiley and Sons, 196.7): 668-669. 5Robert MeKellar, ed., "Salt Marsh to Chemical Center-The Texas Division," Dow Diamond, 18, no. 3 (Midland, Texas: Dow Public Relations Department, October 1955): 1-14. 6Gross, "Magnesium," p. 663. Area Surrounding Dow Magnesium Plants, Freeport and Velasco, Texas SOURCE: Adapted from Dow Diamond, Dow Chemical Company Public Relations Department. chlorine and hydrochloric acid in the process, is derived from local salt domes. 7 Seawater and Brazos River water are used for cooling purposes. The river serves as a means of disposal of processed seawater, with little danger of recycling.8 The American Magnesium Company selected a site twelve miles west of Snyder, Texas, in Scurry County, for a primary magnesium plant. Underground brine water, lo­cated near Gail, in Borden County, supplies magnesium chloride, a raw-material source for magnesium.9 Other major factors significant in the choice of the plant location were the abundance of natural gas as an energy source, the availability of a labor supply, and railroad transportation. The combination of accessible raw materials and a favorable location enabled Dow and American Magnesium to produce magnesium by the electrolysis of magnesium chloride. Magnesium Process at Dow and American Magnesium Magnesium, widespread through nature, occurs in sea­water, underground natural brines, salt deposits, dolomite, magnesite, and carnallite. Dow produces magnesium from seawater in the following chemical process: The mixture of seawater and lime precipitates magnesium hydroxide. After being treated with hydrochloric acid, the hydroxide forms magnesium chloride. After the evaporation of the residual I. Intakes of seawater provide in excess of 50,000 gallons a minute for the Freeport plant. A seven­mile canal provides seawater for the Velasco magnesium plant. 2. Oyster shells are made into milk of lime in five huge lime kilns, which use approximately 2,500 tons of shells per day. 3. In the next process, settling, seawater is mixed with milk of lime, yielding Mg(OH)2, or milk of magnesia, which settles to the bottom of open tanks and is continuously drawn off for filtering. 4. Filtering, the next step, dewaters the magnesium hydroxide. Hydrochloric acid and sulfuric acid are added to form 15-percent magnesium chloride. 5. In the evaporation process, a direct-fired evaporator concentrates l 5-percent magnesium chloride into a 34-percent solution by passing it through hot air. The 34-percent solution is further concentrated to 48 percent in steam kettles and results in 74-per­cent magnesium chloride. 6. Drying produces granulated 74-percent magnesium chloride in 13 drying shelves. 7. Electrolysis uses electric current passing through molten salts containing the 74-percent magnesium chloride to separate magnesium from chlorine. Magnesium ingots are dipped from electrolyzing 10 pots. water, magnesium and chlorine are formed by electrolysis, To combat pollution in the magnesium-producing process, the electrochemical decomposition of magnesium chloride Dow has no injection wells for processed seawater and by direct electrical current. The Dow electrolytic process in utilizes electrostatic precipitators for the collection of the magnesium production includes the following steps: residual lime from the kilns. The American Magnesium Company produces magne­sium metal and chlorine from subsurface brine. The brine Ibid., pp. 669-670. 8/bid., pp. 668-669. 9w.G. Nixon, American Magnesium Company, Snyder, Texas, 10H.L. O'Connell, photograph (Freeport, Texas: Dow Chemical letter, February 9, 1971. Company, Texas Division, Public Relations Department). APRIL 1972 DOW SEAWATER PROCESS OF MAGNESIUM PRODUCTIO Magnesium Oyster shells Hydroxide Co C03 Co!OHl2 Mg(OHl2 Sludge SOURCE: Adapted from Magnesium and Magnesium Compounds, U.S. Bureau of Mines. because of their light weight and weldability. In the graphic arts, newspaper publishers have used magnesium alloys in printing plates since 1946. In material handling, magnesium alloys are used in ramps for loading and unloading freight, extension ladders, shovels, buckets, and pulleys. Consumer items containing magnesium alloys include small tools, ladders, portable luggage, chain saws, sewing machines, lawnmowers, typewriters, calculating machines, snowmo­biles, and bow handles. The nonstructural applications of magnesium include use in powder, in aluminum and other alloying, and in cathodic protection, Magnesium is used as a scavenger and deoxidiz­er, as a chemical, and as a reducing agent in the production of titanium, zirconium, hafnium, uranium, and beryllium.13 Amount of Magnesium Production in Texas contains approximately I I-percent magnesium chloride compared with about 4,500-parts-per-million magnesium chloride in seawater. Magnesium chloride is separated from other salts in brine by a dehydration process, and magne­sium metal is recovered from the magnesium chloride crystals by electrolysis. At both American Magnesium and Dow, chlorine is a byproduct of the electrolysis process.11 Structural and Nonstructural Applications of Magnesium Magnesium is the lightest of man's structural materials. Aluminum is one and a half times heavier, iron and steel four times heavier, and copper and nickel alloys five times heavier. Magnesium in its pure state does not possess sufficient strength for many structural uses; it must be combined with aluminum, zinc, or manganese to produce an efficient structural alloy. Other favorable characteristics of magnesium include machinability, suitability for fabrica­tion, low electrical resistivity, hif1 thermal conductivity, nontoxicity, and non-magnetism.1 Magnesium produced in Texas has structural and non­structural applications. Magnesium first gained importance during World War II as a structural metal in military and civilian aircraft. Magnesium alloys now are used in aircraft engines, airframe structures, wings, wheels, jet engines, and guided missiles. Magnesium-alloy die castings and mold castings are used in passenger cars by General Motors and Chrysler Corporations. In 1960 the German Volkswagen had thirty-six pounds of magnesium per car in the form of crank cases, transmission housings, and a few smaller parts. Manufactures have used magnesium alloys in such elec­tronic and electrical equipment as radar sets, high-speed teleprinters, and form panels for major units; magnesium was included in parts for the world's first nuclear-power plant. Industrial drills, cutting tools, textile machines, and impact hammers and sanders employ magnesium alloys Netzeband and Girard, "Mineral Industry," p. 34. l2Wi1Jiam H. Gross, The Story of Magnesium {Cleveland: American Society for Metals, 1949), p. 233. Dow Chemical and American Magnesium are the two major U.S. primary producers of magnesium. Of the 231,000 tons of world production in 1970, approximately 120,000 tons were produced in Texas.14 Dow Chemical produced nearly all the primary magnesium in 1970-an estimated 112,000 tons, up 12 p~rcent from 1969. Dow added an extra 15 ,000-ton capacity per year to its Freeport facility in late 1969 and an additional 10,000-ton capacity per year was started in March 1970. Dow's total primary capacity is approximately 120,000 tons per year. In its first year of operation, 1969, American Magnesium produced less than its planned capacity of 10,000 tons per year because of difficulty with the spray-drying equipment for the magnesium chloride. In 1970 the company was still behind its planned 10,000-tpy goal. The ultimate expansion of the facility is proposed at 30,000 tpy. American Magnesium, however, was temporarily shut down in July 1971 for ecological reasons. Markets of the Texas Magnesium Industry The basis of magnesium-market growth may be inter­preted as profitability. Profits are related to production amounts and to the production process, and the electrolytic process has a larger profit capability than the ferrosilicon process. The electrolytic process produces 80 to 90 percent of the total world magnesium, and the thermal reduction of magnesium chloride by use of ferrosilicon supplies the remainder. 15 Dow magnesium profits declined in 1969 because of the magnesium shortage that developed in the spring of 1968 and continued into 1970. The poor magnesium profits in 1969 were a result of purchases of stockpile metal in order to supply customers during the shortage. As a result 13 Hazel B. Comstock, Magnesium and Magnesium Compounds {Washington, D.C.: U.S. Government Printing Office, 1963), pp. &-14. 14Robert H. Lesemann, ed., Metals Week, 42, no. 8 {New York: McGraw-Hill Company, February 23, 1971): 11-12. lSchives w. Evans, Dow Chemical Company, interview, Free­port, Texas, December 14, 1971. DOMESTIC CONSUMPTION OF PRIMARY MAGNESIUM (INGOT EQUIVALENT AND MAGNESIUM CONTENT OF MAGNESIUM-BASE ALLOYS), BY USES (Short tons) 1951-55 Use (average) 1956 1957 1958 1959 1960 For structural products Castings Sand 11,083 6,478 6,076 5,698 4,770 2,561 Die 2,107 1,875 1,649 1,553 • 1, 772 • 1,528 Permanent mold 905 1,034 571 889 981 745 Wrought products Sheet and plate 5,008 5,496 4 ,916 4,061 6,128 4,112 Extrusions (structural shapes, t ubing) 3,617 6,223 5,081 2,624 3,074 2,580 Forgings 238 473 7 141 1,913 893 Total structural 22,958 21,579 18,300 14,966 18,638 12,419 For distributive or sacrificial purposes Powder 903 918 386 352 456 430 Aluminum alloys 8,821 13,323 11,236 10,746 14,780 12, 511 Other alloys 449 98 587 446 840 421 Scavenger and deoxidizer 743 865 867 708 292 788 Chemical 313 63 325 148 351 276 Cathodic protection (anodes) 3,285 3,036 2,997 2,028 3,005 3,264 Reducing agent for titanium, zirconium, hafnium, uranium, and beryllium ••2,888 13,303 9,695 5,953 3,175 6,978 Other••• 1,373 425 49 5 14 13 Total nonstructural 18,775 32,031 26,142 20,386 22,913 24,681 Grand total 41,733 53,610 44,442 35 ,352 41,551 37,100 • Includes primary metal to produce small quantities of investment castings. ** Before 1954, included with "other". 1954, 6,386 tons; 1955, 8,056 tons. *** Includes primary metal consumed for experimental purposes, debismuthizing lead, and producing nodular iron and secondary magnesium alloys. magnesium-market development and capacity increases were delayed in 1969. 16 In 1970 Dow had a diversity of markets for magnesium sales. Nalco Chemical Company, in Freeport, purchased magnesium ingots for chemical applications in tetraethyl­lead production. This market has an uncertain future because of pending restrictions against leaded gasoline. 17 The Beryllium Corporation of America, Titanium Metals, and Oregon Metallurgical obtained magnesium as a reducing agent in the production of such metals as uranium and titanium. This market is considered small. Magnesium was sold to consumers for cathodic protection of heaters. Union Carbide and International Nickel added magnesium to nodular-cast iron. The increasing market for magnesium for use in cast iron has a yearly growth rate of about 20 percent. The automotive industries of the United States and of foreign nations, which use magnesium in die castings, constituted another important market in 1970. Dow claims that 20 million pounds of magnesium are used each year in die castings. Doehler-Jarvis, a National Lead subsidiary, purchased magnesium for automotive-die casting. Chrysler and General Motors were major American automotive purchasers of magnesium from Dow. Volkswagen of West Germany and Brazil was the leading foreign automotive consumer of magnesium die castings. Automotive concerns in Italy, France, and England also purchased large amounts of magnesium for die castings. 16Robert H. Lesemann, ed., Metals Week, 41, no. 46 (New York: McGraw-Hill Company, November 16, 1970): 16-20. 11/bid. Aluminum alloying, the major market of primary magne­sium for Dow in 1970, accounted for 30 to 40 percent of the magnesium market. Alcoa, Kaiser, and Reynolds Alumi­num were the main consumers, and the growth in this market came iii. response to increased demand for the aluminum-alloy can-2.S percent magnesium. Sand-and permanent-mold magnesium castings in the aircraft market are dependent on federal defense and aerospace usage. The drastic reductions in defense and aerospace orders and the decreased use of magnesium castings in aircraft were responsible for a decline in 1970 sales. A small market existed for magnesium powder for use by defense-related industries that produce magnesium flares for the war in Southeast Asia. Dow has a magnesium fabrication plant in Denver, Colorado, which contains a large extrusion press and produces magnesium extrusions for Samsonite luggage. This pla-nt is part of an attempt by Dow to promote the growth of the market for fabricated magnesium. The market for magnesium for use in batteries is expanding. Sales are expected to grow as a result of magnesium-battery usage by military and commercial concerns. Finally, Phelps Dodge of Illinois was producing material-handling tool~ hand tools, and photoengraving plates from magnesium. 1 Information on the magnesium markets of the American Magnesium Company of Snyder, Texas, is based on a reply from W.G. Nixon, Industrial Relations Superintendent. The aluminum companies are the largest markets for magnesium for alloying purposes. The aircraft industry, the space 18 w.A. Rollwage, Dow Chemical Company, interview, Lake Jackson, Texas, February 19, 1971. APRIL 1972 industry, and the automotive industry, especially Volks­wagen, are other important markets of the American Magnesium Company. Competition Dow Chemical and American Magnesium produce vir­tually the entire amount of noncaptive magnesium in the United States. Dow assumes leadership in market sales. Other magnesium producers in the United States competing with Dow and American Magnesium are National Lead, Titanium Metals, Oregon Metallurgical, and Alamet. Na­tional Lead will complete its new magnesium plant in late 1971 on Great Salt Lake with a 45 ,000-ton-per-year capacity. Titanium Metals presently produces approxi­mately 15,000 tons per year for titanium-sponge usage in aircraft. Oregon Metallurgical of Albany, Oregon, produces approximately 10,000 tons per year for its own consump­tion. The use of magnesium in captive operations by both of these companies fulfills most of the demand that otherwise would be met by such primary producers as Dow or American Magnesium. All those companies produce magnesium by the electrolytic process. Alamet of Selma, Alabama, produced approximately 9,000 tons of magne­sium per year by the ferrosilicon process before the plant closed in January, 1970. Foreign competition is not an important concern to Dow and American Magnesium in American magnesium sales, but it is a concern in international markets. The high American tariff duty on foreign magnesium limits the sale of European magnesium in America, according to Arve Johnson, sales manager of Norsk-Hydro Elektrisk of Nor­ way. Norway; France, and Italy are the principal magne­ sium producers in Western Europe. France and Italy, Common Market nations, are partially protected by a tariff wall and profit by selling magnesium to Western European countries and to other developed nations. In early 1970 Magnetherm of France had an output of 5 ,850 tons and Cromodora of Italy had an output of 8,500 tons. Norsk-Hydro Elektrisk of Norway, the leading primary producer of Western Europe, has been producing magne­ sium since 1951 , and total sales in Western Europe have been increasing by about 6 percent a year. In a joint venture with Salzdetfurth of West Germany, Norsk-Hydro announced in late 1970 an expansion program at its existing magnesium facilities in Heroya, Norway , which will increase capacity from 44,000 tpy to 52,000 tpy by late 1972. 19 Volkswagen of West Germany accounts for 95 percent of the Norsk-Hydro magnesium that reaches the market.20 In early 1970 Dominion Magnesium of Canada had a magnesium output of 11,300 tons, and Furakawa Magnesium of Japan produced 6,600 tons. The Soviet Union is also a magnesium producer, and Russian-produced 19 Etwood Meschter, "Magnesium Faces Moment of Truth," Modern Metals, 26, no. 6 (Chicago: Modern Metals Publishing, July 1970): 72. 20Lesemann, Metals Week, 42, no. 8: 12. 21 Lesemann, Metals Week, 41, no. 46: 17. 80 MAGNESIUM OlITPUT (Tons of annual capacity) Late Late 19 69­ 1971 - June earl y earl y Compan y 1969 1970 1972 Dow Chemical Freeport, Texas Dallesport, Washington Nat ional Lead Great Salt Lake American Magnesium Snyder, Texas Nalco Chemical (unannounced) Tita nium Metals Corporation of America He nderson, Nevada Oregon Metallurgical Albany, Oregon Alamet Selma, Alabama Total US Norsk-Hydro Elektrisk Norway West Germany (joint venture with Salzdetfurth) Dominion Magnesium Canada Magnetherm (Pechiney­Ugine Kuhlmann) France Cromodora Italy Furakawa Magnesium J a pan To tal foreign Grand to tals 95,000 12 5,000 125,000 4 8,000 4 5,000 10,000 30,000 30,000 10,000 15,000 15 ,000 15 ,000 10,000 10,000 9, 000 9,000 9,000 139,000 189,000 292,000 40,000 44,000 48,000 26,500 11,300 11,300 11,300 5,850 5,850 7,700 7,700 8,500 9,000 6,600 6,600 6,600 71,450 76,250 109,100 210,450 265,250 401,100 Source: Metals Week. magnesium has been sold in European, Canadian, and Australian markets. 21 Dow Chemical and Norsk-Hydro are the only two magnesium producers in the world which can be considered international competitors. If tariff walls against magnesium in the United States and in the Common Market were dissolved, the world's magnesium market would increase sizably, according to Arve Johnson.22 Future of Texas Magnesium Texas magnesium operations in the future will require a convenient supply of raw materials and power. Dow has an abundance of seawater, brine, and fresh water, but possible natural-gas shortages and the limitation of access to oyster shells by governmental regulation may occur. Dolomite reserves and lime producers in Central Texas could provide Dow with lime. American Magnesium has a vast supply of magnesium chloride in underground brine, but the com­pany is faced with a potential future shortage of natural gas for power. The structural and nonstructural applications of magne­sium in the future depend on the comparative economics of magnesium and its competitive materials. In structural 22Meschter, "Magnesium," p. 74. TEXAS BUSINESS REVIEW markets magnesium must compete with aluminum. Magne­sium is not used successfully in many of aluminum's structural applications because of its undecorative appear­ance and because of corrosion and combustibility problems. In 1964 the structural-magnesium volume was about 1 percent of the structural-aluminum volume. In the future magnesium must compete with sodium, calcium, zinc, aluminum, and other elements that have nonstructural applications in the chemical, metallurgical, and electro­chemical industries. 23 Texas magnesium consumption in the l 970's will be influenced by the amount of available metal and by market growth. Dow magnesium operations will experience growth in production, but overall consumption may be a problem. Future consumption will depend on the continued success­ful use of magnesium, aluminum alloying, die casting, and fabrication, as well as on the continued need for magnesium for electrochemical and sacrificial uses in other nonstruc­tural markets. The ability to discover and enter new structural markets through research and development is a critical factor in the future success of magnesium sales. For the next few years Dow will have a shortage of magnesium for its markets, but the firm expects a supply-demand balance eventually. American Magnesium must solve the environmental problems that caused a shutdown of the plant, if the company is to achieve its 30,000-tpy goal and to improve its market growth. Competition with the Tex.as magnesium industry on the national and international scene may be based on produc­ tion amounts. NL Industries, Inc. (formerly National Lead) will be the major American competitor of Dow and American Magnesium if it completes a 45,000-ton-per-year magnesium complex at Rowley, Utah, on the Great Salt Lake, during 1972. Norsk-Hydro of Norway is expected to remain the largest international competitor. The price of Texas magnesium will be dependent upon production costs and the market strategy of competitors. The high costs of capital, raw materials, labor, and power now make it difficult to sell magnesium at reduced prices. Despite increased-capacity announcements by NL Indus­ tries, Dow does not predict an oversupply situation in the United States because of delays in projects and the possibility of continuing inflation. If magnesium is to become competitive with aluminum and other metals in the structural market, the price may have to equal that of aluminum-about $.28 to $.29 per pound. Presently the price is approximately $.35 per pound. The future success of magnesium will be determined by the quality of the metal and by the effectiveness of the effort to call attention to its many structural and nonstruc­ tural applications. Improvement of the surface appearance of the metal and increased promotion of the product may 24 . d d f . increase the eman or magnesium. 23J.D. Hanawalt, "Present Status and Future Trends in the Production of Magnesium," Journal of Metals, 16, no. 7 (New York: American Institute of Mining, Metallurgical, and Petroleum Engin­ eering, July (1964): 562. 24Meschter, "Magnesium," pp. 66-76. TEXAS CONSTRUCTION* Robert M. Lockwood Vigorous planning of office-bank buildings and apart­ments shouldered the indexes of Texas construction to previously unachieved heights in February. The indexes, which are based on reported building-permit issues in urban places, gained in comparison with the figures for January 1972 and for February 197 l. After adjustment for seasonal fluctuation, the index of total construction authorized moved ahead about 33 percent to a February level of 212.4 percent of the 196 7 base-period. The index gained 52 percent on the figure recorded in February 197 l. At 236.7 percent of the base-level, the seasonally adjusted index of residential construction authorized in February amounted to 29 percent more than the level of January and approximately 33 percent more than the level of February 1971. Because the index of nonresidential construction cannot be adjusted feasibly for seasonal variations, the fluctuations of this index are difficult to assess. Nonetheless, February 1972 must be accounted a highly successful month, the unadjusted index of nonresi­dential construction having moved 46 percent ahead of January 1972 and 87 percent ahead of February a year ago. Of the unadjusted dollar gain in February of some $89.3 million, apartments and other multifamily dwellings ac­counted for $31 million, 34 percent of the entire net gain. Another $47.4 million-equivalent to 53 percent of the net gain-was attributable to office-bank buildings. These two components total more than 100 percent because they and others had to offset some significant losses in individual sectors. Commercial garages, for example, fell off $12.3 million in unadjusted authorizations, and stores and mer­cantile buildings lagged $8.2 million behind the pace of January 1972. Hotels, motels, and tourist courts ($10.3 million), one-family houses ($10.1 million), and industrial buildings ($9.5 million) accounted for other significant gains. An examination of the table showing the number and types of new housing units authorized quarterly in Texas during the last five years is inconclusive. One-family permits may not have peaked in mid-1971, as they appear to have done from the evidence of the table. Authorizations for January and February 1972 are about 16 percent ahead of the same two months last year. As a proportion of total housing units authorized, one-family homes have not fallen below 30 percent since the third quarter of 1969. During January-February 1972, one-family dwelling units authorized amounted to 44.5 percent of all housing units permitted. The last table accompanying this article sets forth cumulative total and per-capita values of all construction authorized in the state during 1967-1971 and 1970-1971 * Data used in this article come only from building-permit-issuing places. APRIL 1972 and offers a comparison of the twenty-five standard NUMBER AND TYPE OF NEW HOUSING UNITS AUTHORIZED* metropolitan statistical areas (SMSA's) in terms of constant QUARTERLY IN TEX.AS, 1967-1971 1967 dollars. Although the table offers no real surprises, a Year and few striking facts emerge. With only 2.6 percent of the total quarter One-family Two-family Apartment Total population of Texas and Miller County, Arkansas (a part of the Texarkana SMSA), the Austin SMSA authorized 6.4 1967 1st 8,762 447 6,240 1 S,449 2nd 9,832 604 8,426 18,862 percent of the reported permit values during 1967-1971 3rd 8,929 428 8,120 17,477 and 6.2 percent during the last two calendar years. The 4th 7,911 587 11,913 20,411 disproportionate share of Austin is reflected in the city's 1968 1st 8,997 sso 1 S,036 24,583 position among the SMSA's in terms of per-capita value 2nd 9,657 596 14,254 24,507 during each of those two periods. During the five years 3rd 8,724 394 14,733 23,851 4th 8,051 540 16,096 24,687 ending with 1971, per-capita values authorized in Austin amounted to $2,205, more than 69 percent greater than the 1969 1st 8,592 680 18,835 28,107 figure for Dallas, which ranked second to Austin in this 2nd 8,336 404 13,314 22,054 3rd 6,956 296 16,263 23,515 category. 4th 6,182 240 10,027 16,449Besides Austin and Dallas, three other SMSA's surpassed the average per-capita value for all twenty-five SMSA's 1970 1st 7,320 250 10,216 17,786 2nd 9,563 386 15,800 25,749 during 1967-1971-Houston, Fort Worth, and Bryan­ 3rd 8,713 734 12,816 22,263 College Station. The first four of those cities-Austin, 4th 8,169 462 15,976 24,607 1971 1st 11,949 834 17,133 29,916 ESTIMATED VALUES OF BUILDING AUTHORIZED IN TEX.AS* 2nd 13,176 856 16,655 30,687 3rd 13,023 950 15,493 29,466 4th 10,619 826 16,999 28,444 Percent change * In urban places reporting building permits. Jan-Feb 1972 Feb Jan-Feb Feb 1972 from Dallas, Houston, and Fort Worth-ranked in the same 1972 1972 from Jan-Feb sequence in per-capita value during 1970-1971, and all four Classification (thousands of dollars) Jan 1972 1971 again surpassed the SMSA average. Bryan-College Station ALL PERMITS 342,247 595,187 35 41 fell to seventh place, slightly below the average, during New construction 317,663 547,799 38 43 Residential 1970-1971, and El Paso and Lubbock moved up slightly, (housekeeping) 168,036 295,483 32 36 from just below the average during 1967-1971 to just above One-family dwellings 96,477 182,896 12 44 it during 1970-1971. Multiple-family dwellings 71 ,559 112,587 74 26 Killeen~Temple, the newest SMSA, and San Angelo Nonresidential buildings 149,627 252,316 46 so exhibited considerable improvement according to this Hotels, motels, and tourist courts 11,485 12,669 870 -23 yardstick. Killeen-Temple moved from sixteenth place in Amusement buildings 2,657 S,772 -15 -48 1967-1971 to eleventh place in 1970-1971, from a per­Churches 4,662 6,917 107 4 capita value amounting to 56.8 percent of the average Industrial buildings 12,430 1 S,374 322 16 Garages (commercial SMSA value to a 1970-1971 per-capita value amounting to and private) 3,926 20,006 -76 254 65.5 percent of the twenty-five-area average. San Angelo Service stations 1,099 2,480 -20 -25 moved from seventeenth to thirteenth place. Hospitals and institutions 2,535 9,352 -63 17 The most severe decline among the SMSA's was suffered Office-bank buildings 59,196 71,023 401 157 by Galveston-Texas City, which slid from thirteenth to Works and utilities 653 S,024 -85 -30 Educational buildings 20,448 35,192 39 24 twenty-third place. Stores and mercantile Questions are often asked concerning the extent and the buildings 27,616 63,391 -23 95 validity of the coverage of construction activity in Texas as Other buildings and structures 2,920 S,116 33 -33 Additions, alterations, TOTAL BUILDING AUTHORIZED, TEXAS* and repairs 24,584 47,388 8 23 SMSA vs. NON-SMSA Total SMSAt 320,247 547,564 41 42 Central Cities 222,020 378,488 42 41 Outside central cities 98,227 169,076 39 44 Total non-SMSA 21,999 47,622 -14 28 10,000 to 50,000 population 14,014 27,081 7 48 Less than 10,000 population 7,985 20,541 -36 8 * Only building for which permits were issued within the incorporated area of a city is included. Federal contracts and 1951 1962 1963 Ifft' 1965 1'66 1967 1961 19&9 1970 1971 lt72 public housing are not included. • AA _,..... .ijvsled fOf a--.! ..,.tllOfl •itll IM u.e>ep1:iolri of ~I.al t As defined in 1970 Census. .,...... tor W'llocll tlrirn it "° apedfk _ .. 1.....s. lndudn lldd1lionl, .mm-. and ......,,_ NOn· SfMoMd -. lftdicace perioch d duh of total bW-9Cftrilr 111 1br. United ~ Source: Bureau of Business Research in cooperation with the Bureau of the Census, U.S. Department of Commerce. TEXAS BUSINESS REVIEW CUMULATIVE TOTAL AND PER-CAPITA VALUE OF ALL CONSTRUCTION AUTHORIZED! IN TEXAS, BY STANDARD METROPOLITAN STATISTICAL AREA, 1967-1971AND1970-1971 (Values in constant (1967) dollars2) Cumulative value authorized, 1967-1971 Cumulative value authorized, 1970-1971 Rank in per-capita value Standard metropolitan statistical area Total (millions of dollars) Per capita3 (dollars) Total (millions of dollars) Per capita3 (dollars) 1967­1971 1970­1971 Abilene 4S,847 402 16,3S6 144 23 24 Amarillo 137,998 9S6 S6,2S9 397 8 8 Austin 6Sl,SOO 2,20S 264,777 896 1 1 Beaumont-Port Arthur-Orange 136,667 433 S2,787 167 19 21 Brownsville-Harlingen-San Benito S8,699 418 2S,120 179 2 0 19 Bryan-College Station 6S,093 1,123 24,332 420 s 7 Corpus Christi 224,370 7 88 100,433 3S3 9 9 Dallas 2,382,7S7 l,S31 994,777 639 2 2 El Paso 369,S21 1,028 171,SlO 477 6 s Fort Worth 928,6S6 1,219 373,19S 490 4 4 Galveston-Texas City 104,74S 617 27,432 162 13 23 Houston 2,4S4,1 S9 1,236 1,044,093 S26 3 3 Killeen-Temple 96,089 601 46,198 289 16 11 Laredo 23,6S2 32S 12,089 166 2S 22 Lubbock 183,604 1,024 8S,249 47S 7 6 McAllen-Pharr-Edinburg 74,S Sl 411 32,226 178 21 20 Midland 4S,289 692 14,2S 1 218 11 17 Odessa 37,37S 407 17,169 187 22 18 San Angelo 42,38S S97 18,070 2S4 17 13 San Antonio S20,041 602 197,2S6 228 lS lS Sherman-Denison 63,1 SS 7S9 22,198 267 10 12 Texarkana4 36,9S8 36S 13,991 138 24 2S Tyler S3,946 SS6 21,689 223 18 16 Waco 99,S 18 674 49,3S3 334 12 10 Wichita Falls 78,49S 61S 31,012 243 14 14 Subtotal SMSA's4 8,91 S,070 1,0S8 3,712,822 441 Outside SMSA's 1,2S 1,034 446 S26,79S 188 Total state4 10,166,104 90S 4,239,617 378 Reported in permit-issuing places. 2 Annual current-dollar estimates deflated according to U.S. Department of Commerce composite construction cost index, as published in Construction Review, 18 (January 1972), p. S1. 1971 figure partly estimated. 3 Based on 1970 Census of Population. 4 Includes Miller County, Arkansas. reflected by the statistics published by the Bureau of Business Research. Complete coverage of the statistical universe represented by those statistics would never directly cover the entire state. Because building permits are issued by incorporated municipalities, complete coverage would be achieved through the receipt of twelve monthly reports every year from every incorporated municipality. Even these reports could not avoid one notable omission, however, because federal contracts are not covered by municipal permits. No permits issued anywhere, of course, reflect construction outside incorporated communities. This writer carried out an exhaustive study of 1970 reports to the Bureau of Business Research. The extent of the coverage of reporting communities was based on the extent to which their reports were complete. A community of 12,000, for example, which filed ten monthly reports, was considered to represent a "covered" population of 10,000. The figure thus built up of the "covered" popula­tion represented about 83 percent of the entire population of Texas plus Miller County, Arkansas. Large cities fre­quently report that about 15 percent of the value of permits issued covers projects which, for one reason or another, never are built. Thus complete reporting by all permit-issuing agencies might produce a figure some 15 percent above what is actually constructed. These facts support the conviction that the construction statistics published by the Bureau of Business Research, which are intended to represent reported building permits issued by Texas urban places, probably approximate the actual volume of construction in the state. Harvest of early and midseason oranges was completed in Texas during February. Harvesting of Valencia oranges continued during March. The Texas orange crop this season is expected to total 6,000,000 boxes, slightly under the 6,200,000 boxes produced during the 1970-1971 season. Texas citrus trees are reported to be in good condition, and fruit sizes are larger than those of the 1970-1971 crop. APRIL 1972 Statistical data compiled by Mildred Anderson, statistical associate, technician. The indicators of local business conditions in Texas which are included in this section are statistics on bank debits, urban building permits, and employment. The data are reported by metropolitan areas in the first table below and by municipalities within counties in the second table. Standard metropolitan statistical areas (SMSA's) in Texas are defined by county lines; in the first table the counties included in the area are listed under each SMSA. Since the Longview-Kilgore­Gladewater area is functioning as a significant metropolitan complex in its region, although not officially designated as an SMSA by the Bureau of the Census, data for this area have been included in the table for SMSA's. In both tables the populations shown for the SMSA's and for the counties are the population counts of the 1970 Census. In the second table the population values for individual municipalities are also counts of the 1970 Census, unless otherwise indicated. Population estimates made for municipalities in noncen­sus years are commonly based on utility connections, and these estimates are subject to the errors inherent in a process dependent on base ratios derived in 1960. Constance Cooledge, statistical assistant, and Kay Davis, statistical The values of urban building permits have been collected from participating municipal authorities by the Bureau of Business Research in cooperation with the Bureau of the Census of the U.S. Department of Commerce. Inasmuch as building permits are not required by county authorities, it must be emphasized that the reported permits reflect construction intentions only in incor­porated places. Permits are reported for residential ·and nonresiden­tial building only, and do not include public-works projects such as roadways, waterways, or reservoirs; nor do they include construc­tion let under federal contracts. The values of bank debits for all SMSA's and for most central cities of the SMSA's have been collected by the Federal Reserve Bank of Dallas. Bank debits for the remaining municipalities have been collected from cooperating banks by the Bureau of Business Research. Employment estimates are compiled by the Texas Employment Commission in cooperation with the Bureau of Labor Statistics of the U.S. Department of Labor. Footnote symbols are defined on pp. 85 and 92. INDICATORS OF LOCAL BUSINESS CONDITIONS FOR STANDARD METROPOLITAN STATISTICAL AREAS February 1972 Reported area and indicator Feb 1972 Percent change from Jan Feb 1972 1971 Reported area and indicator Feb 1972 Percent change from Jan Feb 1972 1971 ABILENE SMSA Jones and Taylor Counties; population 113,959 Urban building permits (dollars) 823,433 Bank debits, seas. adj. ($1,000) 207,285 Nonfarm employment 39,400 Manufacturing employment 5,570 Unemployed (percent) 3.4 AMARILLO SMSA Potter and Randall Counties; population 144,396 Urban building permits (dollars) 1,859,775 Bank debits, seas. adj. ($1,000) 563,226 Nonfarm employment 61,900 Manufacturing employment 8,390 Unemployed (percent) 3.8 AUSTIN SMSA Travis County; population 295,516 Urban building permits (dollars) 21,791,534 Bank debits, seas. adj. ($1,000) 933,471 Nonfarm employment 143,300 Manufacturing employment 13,060 Unemployed (percent) 2.2 BEAUMONT-PORT ARTHUR-ORANGE SMSA - - - Jefferson and Orange Counties; population 315,943 Urban building permits (dollars) 2,360,153 Bank debits, seas. adj. ($1,000) 558,422 Nonfarm employment 118,900 Manufacturing employment 35,400 Unemployed (percent) 5.3 ­ BROWNSVILLE-HARLINGEN-SAN BENITO SMSA Cameron County; population 140,368 Urban building permits (dollars) 1,924,576 Bank debits, seas. adj. ($ 1,000) 199,626 Nonfarm employment 42,000 Manufacturing employment 7,060 Unemployed (percent) 6.8 ­ 29 5 1 3 18 10 30 23 1 2 4 12 7 1 6 15 80 1 BRYAN-COLLEGE STATION SMSA Brazos County; population 57,978 176 Urban building permits (dollars) 2,661,018 435 184 11 Bank debits, seas. adj. ($1,000) 98,646 2 22 -3 (Monthly employment reports are not available for the Bryan­-1 College Station SMSA). -17 CORPUS CHRISTI SMSA Nueces and San Patricio Counties; population 284,832 Urban building permits (dollars) 5,595,178 1 -32 -65 Bank debits, seas. adj. ($1,000) 593,911 2 12 13 Nonfarm employment 99,800 •• s 2 Manufacturing employment 11,090 •• 4 2 Unemployed (percent) 4.0 -7 2 3 DALLAS SMSA Collin, Dallas, Denton, Ellis, Kaufman, and Rockwall Counties; population 1,555,950 84 Urban building permits (dollars) 9 Bank debits, seas. adj. ($1,000) 7 Nonfarm employmen.t 11 Manufacturing employment 5 Unemployed (percent) EL PASO SMSA El Paso County; population 359,291 -43 Urban building permits (dollars) -3 Bank debits, seas. adj. ($1,000) •• Nonfarm employment•• Manufacturing employment -2 Unemployed (percent) FORT WORTH SMSA 94,251,644 61 110 11,713,461 •• 13 726,000 •• 3 147,225 •• 3 2.8 -7 -18 22,358,291 -7 84 730,075 -2 21 125,800 •• 8 27,200 1 12 4.3 2 -9 Johnson and Tarrant Counties; population 762,086 240 Urban building permits (dollars) 28,656,487 47 51 14 Bank debits, seas. adj. ($1,000) 2,287,258 •• 14 5 Nonfarm employment 288,600 •• -2 11 Manufacturing employment 70,750 1 -12 -4 Unemployed (percent) 4.8 -6 -4 TEXAS BUSINESS REVIEW Percent change from Feb Jan Feb Reported area and indicator 1972 1972 1971 GALVESTON-TEXAS CITY SMSA Galveston County; population 169,812 Urban building permits (dollars) 5,050,749 40 231 Bank debits, seas. adj. ($1,000) 257,743 1 5 Nonfarm employment 61,600 -1 4 Manufacturing employment 11,050 1 5 Unemployed (percent) 6.5 16 14 HOUSTON SMSA Brazoria, Fort Bend, Harris, Liberty, and Montgomery Counties; population 1,985,031 Urban building permits (dollars) 53, 179,150 2 -23 Bank debits, seas. adj. ($1,000) 10,915,542 3 23 Nonfarm employment 894,700 1 4 Manufacturing employment 147,800 •• •• Unemployed (percent) 2.9 -6 4 KILLEEN-TEMPLE SMSA Bell and Coryell Counties; population 159,794 Urban building permits (dollars) 3,301,486 13 102 Bank debits ($1,000) 120,647 -11 19 (Monthly employment reports are not available for the Killeen-Temple SMSA.) LAREDO SMSA Webb County; population 72,859 Urban building permits (dollars) 1,998,655 -21 347 Bank debits, seas. adj. ($1,000) 87,717 -12 1 Nonfarm employment 2 5,400 1 1 Manufacturing employment 1,490 1 5 Unemployed (percent) 13.5 3 12 LONGVIEW-KILGORE-GLADEWATER METROPOLITAN AREA Gregg County; population 75,929 Urban building permits (dollars) 2,056,339 16 79 Bank debits ($1,000) 125,803 -9 10 Nonfarm employment 35,450 ** ** Manufacturing employment 9,840 -1 -2 Unemployed (percent) 5.6 -10 19 (Building permits and bank debits are included for those portions of Kilgore and Gladewater in Rusk County and Upshur County.) LUBBOCK SMSA Lubbock County; population 179,295 Urban building permits (dollars) 5,671,102 85 82 Bank debits, seas. adj. ($1,000) 459,497 3 24 Nonfarm employment 69,800 - I 2 Manufacturing employment 7,720 1 4 Unemployed (percent) 2.3 - 21 -38 McALLEN-PHARR-EDINBURG SMSA Hidalgo County; population 181,535 Urban building permits (dollars) 2,327,217 50 110 Bank debits, seas. adj. ($1 ,000) 189,180 -13 23 Nonfarm employment 44,000 1 -8 Manufacturing employment 4,000 -s -14 Unemployed (percent) 6.7 -IS 2 MIDLAND SMSA Midland County; population 65,433 Urban building permits (dollars) 1,334,071 -18 96 Bank debits, seas. adj. ($1 ,000) 172,479 -3 •• Nonfarm employment 61,700 • * • • Manufacturing employment S,270 • * 3 Unemployed (percent) 3.8 * • 6 (Employment data are reported for the combined Midland and Odessa SMSA'S since employment figures for Midland and· Ector Counties, composing one labor-market area, are recorded in com­bined form by the Texas Employment Commission.) Percent change from Feb Jan Feb Reported area and indicator 1972 1972 1971 ODESSA SMSA Ector County; population 91,805 Urban building permits (dollars) 1,181,400 65 198 Bank debits, seas. adj. ($1,000) 144,281 -3 6 Nonfarm employment 61,700 * * ** Manufacturing employment 5,270 ** 3 Unemployed (percent) 3.8 * * 6 (Employment data are reported for the combined Midland and Odessa SMSA's since employment figures for Midland and Ector Counties, composing one labor-market area, are recorded in com­bined form by the Texas Employment Commission.) SAN ANGELO SMSA Tom Green County; population 71,047 Urban building permits (dollars) 552,852 - 6 -71 Bank debits, seas. adj. ($1,000) 137,761 7 14 Nonfarm employment 24,050 ** 5 Manufacturing employment 4,260 4 3 Unemployed (percent) 3.8 - 7 s SAN ANTONIO SMSA Bexar and Guadalupe Counties; population 864,01 4 Urban building permits (dollars) 19,298,360 54 122 Bank debits, seas. adj. ($1,000) 1,804,360 - 4 7 Nonfarm employment 305,500 ** s Manufacturing employment 35,600 1 2 Unemployed (percent) 3.6 - 10 -18 SHERMAN-DENISON SMSA Grayson County; population 83,225 Urban building permits (dollars) 1,298,952 44 41 Bank debits, seas. adj. ($1,000) 105,012 4 12 (Monthly employment reports are not available for the Sherman-Denison SMSA.) TEXARKANA SMSA Bowie County, Texas, and Miller County, Arkansas; population 101,198 ·urban building permits (dollars) 1,319,769 94 20 Bank debits, seas. adj. ($1,000) 144,269 -1 10 Nonfarm employment 39,750 ** ** Manufacturing employment 8,870 -1 -4 Unemployed (percent) 6.1 13 -3 (Since the Texarkana SMSA includes Bowie County in Texas and Miller County in Arkansas, all data, including population, refer to the two-county region.) TYLER SMSA Smith County; population 97,096 Urban building permits (dollars) 1,966,548 192 103 Bank debits, seas. adj. ($1,000) 218,180 4 14 Nonfarm employment 39,650 ** 2 Manufacturing employment 12,430 1 7 Unemployed (percent) 3.2 -16 -16 WACO SMSA McLennan County; population 147,553 Urban building permits (dollars) 2,882,320 112 171 Bank debits, seas. adj. ($1,000) 305,298 4 17 Nonfarm employment 58,800 1 2 Manufacturing employment 12,470 2 9 Unemployed (percent) 5.2 4 6 WICHITA FALLS SMSA Archer and Wichita Counties; population 127,621 Urban building permits (dollars) 2,014,193 94 139 Bank debits, seas. adj. ($1,000) 230,444 -4 9 Nonfarm employment 43,000 ** -11 Manufacturing employment 5,190 1 -4 Unemployed (percent) 2.9 4 -22 APRIL 1972 INDICATORS OF LOCAL BUSINESS CONDITIONS FOR INDIVIDUAL MUNICIPALITIES FEBRUARY 1972 Urban building permits Ban k debits COUNTY City Population Feb 1972 (dollars) Percent change from Jan Feb 1972 1971 Feb 1972 (thousands of dollars) Percent change from Jan Feb 1972 1971 ANDERSON Palestine 27,789 14,S2 s 274,82 S IS 179 2 3,194 8 21 ANDREWS Andrews 10,372 8,62S I S,6SO -40 -74 I 0, I 0 6 2 ANGELINA Lufkin 49,349 23,049 2S3,620 -42 102 ARANSAS Aransas Pass 8,902 S,813 73,600 -62 9 ,S69 -18 - 9 ATASCOSA Pleasanton 18,696 S,407 6,412 -14 6 AUSTIN Bellville 13,831 2,371 I S,000 67 838 8,983 -II 38 BAILEY Muleshoe 8,487 4,S2S I S,214 -38 10 BASTROP Smithville 17,297 2,9S9 0 2 ,341 -23 - 3 BEE Beeville 22,737 I 3,S06 119,SIS ** 399 21,081 - 6 IS BELL (In Killeen-Temple SMSA) Bartlett Belton Harker Heights Killeen Temple 124,483 1,622 8 ,696 4,216 3S,S07 33,431 162,000 286,366 l,238,92S 1,267,600 - 8 S9 82 77 27 127 111 163 1,42S 38,S 14 6S,7S4 -IS -7 -14 28 22 17 BEXAR (In San Antonio SMSA) San Antonio 830,460 6S4,I S3 18,367,SS4 S9 1S2 1,673,688 -II 12 BOWIE (In Texarkana SMSA) Texarkana 67,813 S2,179 1,284,697 108 17 llS,6S9 -IS 13 BRAZORIA (In Houston SMSA) Angleton Clute Freeport Pearland 108,312 9,770 6,023 11,997 6,444 1,000 3S,200 77,640 789,200 -98 302 218 101 -99 106 102 20,220 S,626 31 ,036 8,609 4 3 3 -13 12 12 16 14 BRAZOS (Constitutes Bryan-College Station SMSA) Bryan College Station S7,978 33,719 17,676 844,618 1,816,400 208 714 23 636 83,879 ll,IS2 -s -18 17 10 BREWSTER Alpine 7,780 S,971 2,330 -97 -97 6,883 - 3 24 BROWN Brownwood 2S,877 17,368 1,410,931 8S 1 202 BURLESON Caldwell 9,999 2,308 4 ,08S -20 16 BURNETT Marble Falls 11 ,420 2 ,209 6,737 -19 12 CALDWELL Lockhart 21 ,178 6,489 117,760 137 - 64 10,399 - 3 32 CAM ERON (Constitutes Brownsville­Harlingen-San Benito SMSA) Brownsville Harlingen La Feria Los Fresnos Port Isabel San Benito 140,368 S2 ,S22 33,S03 2 ,64 2 1,297 3,067 IS,176 l ,4 9 S,800 380,S93 10,300 37,883 137 49 -60 S27 86 296 -69 79,012 78,41 8 2,632 1,878 4,818 8,S0 8 -4 -13 -20 -IS s -9 38 II 6 16 90 19 TEXAS BUSINESS REVIEW Urban building permits Bank debits COUNTY City Population Feb 1972 (dollars) Percent change from Jan Feb 1972 1971 Feb 1972 (thousands of dollars) Percent change from Jan Feb 1972 1971 CASTRO Dimmitt 10,394 4,327 23,374 53 CHEROKEE Jacksonville 32,008 9,734 146,000 139 - 62 23,693 -13 2 COLEMAN Coleman 10,288 5,608 23,650 -87 18,931 -13 11 COLLIN (In Dallas SMSA) McKinney Plano 66,920 15,193 17,872 712,000 2,335,840 675 -15 717 24 14,574 21,728 -10 9 - 2 14 COLORADO Eagle Lake 17,638 3,587 5,601 -9 17 COMAL New Braunfels 24,165 17,859 569,700 23 70 24,902 -12 19 COOKE Gainesville Muenster 23,471 13,830 1,411 413,100 39,000 173 22,459 3,604 3 7 25 21 CORYELL (In Killeen-Temple SMSA) Copperas Cove Gatesville 35,311 10,818 4,683 346,595 -70 11 4 ,884 10,070 -2 -13 24 17 CRANE Crane 4,172 3,427 20,000 -20 2,458 -13 20 DALLAS (In Dallas SMSA) Carrollton Dallas Farmers Branch Garland Grand Praire Irving Lancaster Mesquite Richardson Seagoville 1,327,321 13,855 844,401 27,492 81,437 50,904 97,260 10,522 55,131 48,582 4,390 1,911,675 73,600,865 5,284,795 2,414,690 1,687,005 715,300 2,380,933 1,985,266 102,480 -1 151 -1 75 -59 256 101 36 -74 -55 289 6 68 20 52 150 •• 179 18,308 10,502,153 21,668 37,322 91,141 8,974 31 ,374 83,431 7 ,031 -1 -16 -4 4 1 -2 3 -15 -5 37 14 -18 7 23 4 37 72 -32 DAWSON Lamesa 16,604 11,559 6,500 -87 -92 34,687 -27 23 DEAF SMITH Hereford 18,999 13,414 497,100 379 938 DENTON (In Dallas SMSA) Denton Justin Lewisville Pilot Point 75,633 39,874 741 9,264 1,663 1,220,910 23,800 2,427,695 50,000 -32 -12 -7 21 141 317 72,478 1,367 20,059 3,043 -5 -3 11 -10 37 4 54 26 DEWITT Yoakum 18,660 5,755 12,120 -98 -79 13,638 -11 18 EASTLAND Cisco 18,092 4,160 5,115 4 21 ECTOR (Constitutes Odessa SMSA) Odessa 91,805 78,380 1,181,400 65 198 144,831 -12 12 ELLIS (In Dallas SMSA) Ennis Midlothian Waxahachie 46,638 11 ,046 2,322 13,452 328,040 385,125 28 514 410 11 ,163 2 ,529 -12 -18 27 27 EL PASO (Constitutes El Paso SMSA) El Paso 359,291 322,261 22,358,291 - 7 84 667,699 -16 19 ERATH Stephenville 18,191 9 ,277 14 774 -23 9 APRIL 1972 Urban building permits Bank debits COUNTY City Population Feb 1972 (dollars) Percent change from Jan Feb 1972 1971 Feb 1972 (thousands of dollars) Percent change from Jan Feb 1972 1971 FANNIN Bonham 22,705 7,698 52,757 -21 -44 13,058 - 3 2 FAYETTE Schulenburg 17,650 2,294 45,000 125 -76 FORT BEND (In Houston SMSA) Richmond Rosenberg 52 ,3 14 5,777 12,098 344,289 498,143 605 410 213 336 14,297 10,094 5 5 4 4 GAINES Seagraves Seminole 11,593 2,440 5,007 2,300 44,100 -81 112 59 4 ,080 11 ,248 -30 -14 33 68 GALVESTON (Constitutes Galveston-Texas City SMSA) Dickinson Galveston La Marque Texas City 169,812 10,776 61,809 16,131 38,908 3,361,899 52,650 1,636,200 -97 21 525 -67 97 16,897 153,404 15,786 44,690 3 -14 -25 21 - 8 8 12 9 GILLESPIE Fredericksburg 10,553 5,326 53,165 -23 -36 16,339 -11 8 GONZALES Nixon 16,375 1,925 250 - 92 GRAY Pampa 26,949 21,726 1,400 -98 -99 38,224 -24 17 GRAYSON (Constitutes Sherman-Denison SMSA) Denison Sherman 83,225 24,923 29,061 346,532 952,420 8 91 52 45 32,284 57,5 19 -8 -14 18 12 GREGG (Constitutes Longview-Kilgore-Gladewater Metropolitan Area) Gladewater Kilgore Longview 75,929 5,574 9 ,495 45,547 78,200 216,139 1,762,000 4 22 16 13 175 76 6,498 21,236 98,069 -10 -4 -10 10 31 7 GUADALUPE (In San Antonio SMSA) Schertz Seguin 33,554 4,061 15,934 301,719 126,233 256 -23 24 1,438 24,824 1 5 42 13 HALE Hale Center Plainview 34,137 1,964 19,096 25,500 272,200 181 286 63,122 -31 31 HARDEMAN Quanah 6,795 3,948 0 6,995 -12 14 HARDIN Silsbee 29,996 7,271 14,831 2 28 HARRIS (In Houston SMSA) Baytown Bellaire Deer Park Houston Humble La Porte Pasadena Tomball 1,741,912 43,980 19,009 12,773 1,232,802 3,278 7,149 89,277 2,734 644,156 681,250 38,131,635 263,500 69,000 9,611,187 84 -88 -7 -72 -71 575 456 111 -40 251 -47 75,120 71,128 18,590 9,568,872 11,525 4,713 129,8 14 21,191 -20 -11 -20 7 5 3 6 7 - 12 29 15 29 11 29 27 33 HARRISON Hallsville Marshall 44,841 1,038 22,937 157,073 S7 -83 1,723 30,573 6 3 SS•• HASKELL Haskell 8,S12 3,655 134,500 232 6,9S6 11 3S HAYS San Marcos 27,642 18,860 921,090 263 19 l7,S47 7 TEXAS BUSINESS REVIEW Urban building permits Bank debits COUNTY City Population Feb 1972 (dollars) Percent change from Jan Feb 1972 1971 Feb 1972 (thousands of dollars) Percent change from Jan Feb 1972 1971 HENDERSON Athens 26,466 9,582 16,970 - 9 24 HIDALGO (Constitutes McAllen-Pharr-Edinburg SMSA) Alamo Donna Edinburg Elsa McAllen Mercedes Mission Pharr San Juan Weslaco 181,535 4,291 7,365 17,163 4,400 37,636 9,355 13,043 15,829 5,070 15,313 0 21,150 380,265 700,100 340,750 79,100 145,355 31,200 629,297 -76 -15 30 513 -46 135 134 287 -77 -8 105 17 670 511 4,143 4,868 63,797 9,325 22,860 7 ,845 4,460 21,588 ----- s 39 19 2 14 s 4 6 - 2 6 14 24 19 26 32 14 HOCKLEY Levelland 20,396 11,445 69,1 so -68 - 8 32,263 - 23 31 HOOD Grandbury 6,368 2,473 3,230 4 36 HOPKINS Sulphur Springs 20,710 10,642 318,125 46 82 31,302 2 26 HOWARD Big Spring 37,796 28,735 212,917 48 67,265 - 13 29 HUNT Greenville 47,948 22,043 78,100 -62 -90 27,567 - 6 ** HUTCHINSON Borger 24,443 14,195 32,850 119 - 4 JACKSON Edna 12,975 S,332 34,840 -93 -36 9,637 - 14 - 1 JASPER Jasper Kirbyville 24,692 6,251 1,869 3,000 -90 -96 14,922 3,040 -- 24 4 - 12 15 JEFFERSON (In Beaumont-Port Arthur-Orange SMSA) Beaumont Groves Nederland Port Arthur Port Neches 244,773 115,919 18,067 16,810 57,371 10,894 1,406,324 151,635 256,395 159,696 8 93 -24 60 -47 23 -67 -24 321,142 23,526 13,100 85,562 19,343 --- 16 10 4 10 3 -- 1 62 16 12 11 JIM WELLS Alice 33,032 20,121 311,824 -17 56 48,072 - 14 22 JOHNSON (In Fort Worth SMSA) Cleburne 45,769 16,01 s 539,420 100 125 19,476 - 32 - 10 KARNES Karnes City 13,462 2,926 6,000 -62 -32 5,191 13 KAUFMAN (In Dallas SMSA) Terrell 32,392 14,182 63,800 -7 -96 KIMBLE Junction 3,904 2,654 3,054 - 13 16 KLEBERG Kingsville 33,166 28,711 243,252 -86 -42 25,031 - 14 10 LAMAR Paris 36,062 23,441 454,737 17 247 LAMB Littlefield 17,770 6,738 0 11,941 - 31 19 LAMPASAS Lampasas 9,323 5,922 104,450 -45 97 12,021 25 APRIL 1972 Urban building permits Bank debits COUNTY City Population Feb 1972 (dollars) Percent change from Jan Feb 1972 1971 Feb 1972 (thousands of dollars) Percent change from Jan Feb 1972 1971 LAVACA Hallettsville Yoakum 17,903 2,712 5,755 5,500 12,120 -96 -98 -52 -79 5,676 13,638 -7 -11 19 18 LEE Giddings 8,048 2 ,783 43,300 68 64 7 ,266 - 8 IS LIBERTY (In Houston SMSA) Dayton Liberty 33,014 3,804 5,591 25,180 96,500 -8 -35 -79 746 7,466 15,549 -22 -14 -8 3 LIMESTONE Mexia 18,100 5,943 24,200 -98 9,967 - 7 18 LLANO Kingsland Llano 6,979 1,262 2 ,608 59,935 300 92 8,962 5,974 -11 -3 77 17 LUBBOCK (Constitutes Lubbock SMSA) Lubbock Slaton 179,295 149,101 6,583 5,667,152 3,950 87 -91 82 424,691 7,673 -27 -18 19 25 LYNN Tahoka 9,107 2,956 0 8,584 -19 45 McCULLOCH Brady 8,571 5,557 83,81 s 143 104 9 ,615 -12 22 McCLENNAN (Constitutes Waco SMSA) McGregor Waco 147,553 4,365 95,326 18,500 2,774,720 -37 119 825 172 5,567 278,798 -s -10 18 25 MATAGORDA Bay City 27,913 11,733 101,400 150 69 22,747 -25 6 MAVERICK Eagle Pass 18,093 15,364 79,195 -38 7 13,913 - 7 12 MEDINA Castroville Hondo 20,249 1,893 5,487 s1,070 55,075 48 -63 -27 -58 1,414 5,638 -10 -s -10 16 MIDLAND (Constitutes Midland SMSA) Midland 65,433 59,463 1,334,071 -18 96 160,268 -20 2 MILAM Cameron Rockdale 20,028 S,546 4,655 53,800 49 101 8,127 7 ,882 -26 -14 17 -6 MILLS Goldthwaite 4 ,212 1,693 6,066 - 8 25 MITCHELL Colorado City 9,073 5,227 7,293 -13 17 MONTGOMERY (In Houston SMSA) Conroe 49,479 11,969 57,572 s so MOORE Dumas 14,060 9,771 291,725 227 NACOGDOCHES Nacogdoches 36,362 22,544 1,881,515 621 481 38,639 -12 17 NAVARRO Corsicana 31,150 19,972 324,050 187 140 33,265 -14 NOLAN Sweetwater 16,220 12,020 23,200 -49 -75 25,440 -13 26 NUECES (In Corpus Christi SMSA) Bishop Corpus Christi Port Aransas Robstown 90 237,544 3,466 204,525 1,2 18 11,217 178,400 4 ,589,010 187,845 4 74 -41 ~4 2,744 -13 8 502,085 -11 21 737 -20 -37 181201 11 3 TEXAS BUSINESS REVIEW Urban building permits Bank debits COUNTY City Population Feb 1972 (dollars) Percent change from Jan Feb 1972 1971 Feb 1972 (thousands of dollars) Percent change from Jan Feb 1972 1971 ORANGE (In Beaumont-Port Arthur-Orange SMSA} Orange 71,170 24,457 379,253 156 47 52,468 -20 8 PALO PINTO Mineral Wells 28,962 18,411 115,500 313 100 26,237 - 7 - 4 PANOLA Carthage 15,894 5,392 307,300 131 773 6,058 -10 11 PARKER Weatherford 33,888 11,750 54,200 115 - 45 27,063 8 20 PARMER Friona 10,509 3,111 176,850 112 26,659 -20 30 PECOS Fort Stockton 13,748 8,283 71,600 70 60 11,784 - 9 POTTER (In Amarillo SMSA} Amarillo 90,511 127,010 1,786,975 -21 -66 541,385 -10 23 RANDALL (In Amarillo SMSA} Amarillo (See Potter) Canyon 53,885 8,333 72,800 210 207 11,750 - 6 14 REEVES Pecos 16,526 12,682 43,500 -28 27,094 -21 26 REFUGIO Refugio 9,494 4,340 10,000 -78 4,419 -26 - 10 RUSK Henderson Kilgore 34,102 10,187 9,495 121,050 216,139 -18 22 -17 175 21,032 21,236 -16 -4 15 31 SAN PATRICIO (In Corpus Christi SMSA) Aransas Pass Sinton 47,288 5,813 5,563 73,600 208,268 -62 111 197 9,569 10,925 -18 1 - 9 19 SAN SABA San Saba 5,540 2,555 15,600 56 7,969 -20 16 SCURRY Snyder 15,760 11,171 68,270 -9 19,704 -13 6 SHACKELFORD Albany 3,323 1,978 0 3,141 -29 9 SHERMAN Stratford 3,657 2,139 146,000 158 11,484 -39 2 SMITH (Constitutes Tyler SMSA) Tyler 97,096 57,770 1,966,548 199 129 193,254 - 8 13 STEPHENS Breckenridge 8,414 5,944 8,203 9 SUTTON Sonora 3,175 2,149 4,885 -87 3,594 -12 20 TARRANT (In Fort Worth SMSA) Arlington Euless Fort Worth Grapevine North Richland Hills White Settlement 716,317 90,643 19,316 393,476 7,023 16,514 13,449 17,450,085 1,359,050 5,238,530 136,800 667,200 62,114 95 695 -16 -13 77 -11 127 -24 3 271 85 15 113,173 1,889,295 10,727 19,632 6,600 -5 -7 -13 7 5 4 22 29 24 20 TAYLOR (In Abilene SMSA} Abilene 97,853 89,653 819,108 33 178 168,576 -11 16 APRIL 1972 Urban building permits Bank debits COUNTY City Population Feb 1972 (dollars) Percent change from Jan Feb 1972 1971 Feb 1972 (thousands of dollars) Percent change from Jan Feb 1972 1971 TERRY Brownfield 14,118 9,647 9,600 -93 -86 31 ,219 -28 8 TITUS Mount Pleasant 16,702 8,877 127,850 -62 15 29,015 52 TOM GREEN (Constitutes San Angelo SMSA) San Angelo 71 ,047 63,884 552,852 - 6 -71 127,995 -10 20 TRAVIS (Constitutes Austin SMSA) Austin 295,516 251,808 21,789,534 30 84 1,014,399 -12 17 UPSHUR Gladewater 20,976 5,574 78,200 4 13 6,498 -10 10 UPTON McCamey 4,697 2,647 2,154 9 18 UVALDE Uvalde 17,348 10,764 147,158 10 74 25,009 - 8 24 VAL VERDE Del Rio 27,471 21,330 318,586 6 101 21,544 -13 17 VICTORIA Victoria 53,766 41,349 874,816 42 92 111 ,004 -12 22 WALKER Huntsville 27,680 17,610 277,706 -91 -76 27,343 7 41 WARD Monahans 13,019 8,333 475 - 83 -98 13,941 - 3 WASHINGTON Brenham 18,842 8,922 199,117 - 6 4 25,871 -17 29 WEBB (Constitutes Laredo SMSA) Laredo 72,859 69,024 1,998,655 -21 347 83,771 -16 5 WHARTON El Campo 36,729 8,563 79,698 -10 16 20,695 -25 9 WICHITA (In Wichita Falls SMSA) Burkburnett Iowa Park Wichita Falls 121,862 9,230 5,796 97,564 42,050 40,076 1,932,067 156 -72 121 104 82 142 9,049 4,112 211,057 -14 -9 -11 18 19 18 WILBARGER Vernon 15,355 11,454 61,838 -42 160 35,136 -13 57 WILLACY Raymondville 15,570 7,987 258,600 - 4 10,481 -22 -4 WILLIAMSON Bartlett Georgetown Taylor 37,305 1,622 6,395 9,616 323,846 111,525 -74 -26 500 52 1,425 11,323 14,010 -15 -19 -20 28 29 12 WINKLER Kermit 9,640 7,884 0 WISE Decatur 19,687 3,240 16,500 -37 6,352 -8 25 YOUNG Graham Olney 15,400 7,477 3,624 49,800 42,000 -35 35 357 6,661 7 19 ZAVALA Crystal City 11,370 8,104 7,143 - 5 9 ** Absolute change is less than one half of 1 percent. . .• No data, or inadequate basis for reporting. TEXAS BUSINESS REVIEW BAROMETERS OF TEXAS BUSINESS (All figures are for Texas unless otherwise indicated.) All indexes are based on the average months for 1967=100 except where other specification is made; all except annual indexes are adjusted for seasonal variation unless otherwise noted. Employment estimates are compiled by the Texas Employment Commission in cooperation with the Bureau of Labor Statistics of the U.S. Department of Labor. The symbols used below impose qualifications as indicated here: p-preliminary data subject to revision; r-revised data; *-dollar totals for the fiscal year to date; t-employment data for wage and salary workers only. Feb Jan Feb Year-to-date average 1972 1972 1971 1972 1971 GENERAL BUSINESS ACTIVITY Estimates of personal income (millions of dollars, seasonally adjusted) $ 3,747p $ 3,696p $ 3,367r $ 3,722 $ 3,361 Income payments to individuals in U.S. (billions, at seasonally adjusted annual rate) ..... . $ 896.9p $ 892.0p $ 832.4r $ 894.5 $ 831.2 Wholesale prices in U.S. (unadjusted index) 117.3 116.3 112.8 116.8 112.3 Consumer prices in Dallas (unadjusted index) 123.7 119.8 123.7 119.8 Consumer prices in U.S. (unadjusted index) 123.8 123.2 119.4 123.5 119.3 Business failures (number) ....... 69 66 64 Business failures (liabilities, thousands) $ $ 11,750 $ 14,175 $ $ 19,159 Sales of ordinary life insurance (index) 157.8 151.9 138.0 154.9 139.9 PRODUCTION Total electric-power use (index) .... 165.5p 154.0p 135.lr 159.8 133.7 Industrial electric-power use (index) Crude-oil production (index) ......... 149.8p ll1.6p 140.4p l05.4P 127.5r 112.9r 145.1 108.5 126.1 113.8 Average daily production per oil well (bbl.) 18.0 17.3 18.3 17.7 18.3 Crude-oil runs to stills (index) ......... 112.5 115.4 111.1 114.0 113.6 Industrial production in U.S. (index) . .... 109.oP 108.2p 105.7r 108.6 105.5 Texas industrial production-total (index) .. 126.5p 125.9p 121.lr 126.2 120.7 Texas industrial production-total manufactures (index) 128.2p 129.4p 121.8r 128.8 121.2 Texas industrial production-durable manufactures (index) 135.3p 137.2p l 3 l.3r 136.3 131.0 Texas industrial production-nondurable manufactures (index) 123.1 p 123.7p 114.9r 123.4 114.l Texas industrial production-mining (index) .. 117.lp 112.1 p 115.7r 114.6 116.0 Texas industrial production-utilities (index) . . . . 146.4p 146.4p 135.lr 146.4 134.6 Urban building permits issued (index) . ....... ....... 212.4 159.9r 139.6 186.2 132.6 New residential building authorized (index) ......... 236.7 183.9r 178.0 210.3 153.9 New residential units authorized (index) .. ...... ... 154.0 154.9 165.3 154.5 150.6 New nonresidential building authorized (unadjusted index) 205.4 140.9r 109.9 173.2 117.2 AGRICULTURE Prices received by farmers (unadjusted index, 1910-14=100) 340 334 299r 337 294 Prices paid by farmers in U.S. (unadjusted index, 1910-14=100) 423 420 403 422 402 Ratio of Texas farm prices received to U.S. prices paid by farmers ... 80 80 74 80 73 FINANCE Bank debits (index) .. .... . .. . Bank Commercial Loans outstanding (index) ....... 188.1 126.5 181.2 122.8 157.9 120.9 184.7 124.7 157.8 120.7 Reporting member banks, Dallas Federal Reserve District Loans (millions) .. . .. . . .. ... ........ Loans and investments (millions) .. .. .. .... A(ljusted demand deposits (millions) ........ Revenue receipts of the state comptroller (thousands) Federal Internal Revenue collections (thousands) $ 7,435 $ 10,856 $ 3,636 $383,642 $691,177 $ 7,397 $ 10,886 $ 3,656 $ 259,198 $1,071,562 $ 6,580 $ 9,561 $ 3,387 $304,436 $713,429 $ 7,416 $ 10,871 $ 3,646 $ 321,420 $5,465,924* $ 6,620 $ 9,575 $ 3,377 $ 264,329 $4,613,257* Securities registrations-original applications Mutual investment companies (thousands) $ 24,005 $ 33,786 $ 24,050 $ 142,052 * $ 77,843* All other corporate securities Texas companies (thousands) Other companies (thousands) ..... . .. ... . $ 27,015 $ 38,296 $ 22,500 $ 38,260 $ 8,199 $ 12,085 $ $ 153,849* 226,884* $ $ 62,409* 75,830* Securities registration-renewals Mutual investment companies (thousands) Other corporate securities (thousands) .. $ 42,692 $ 3,522 $ 20,857 $ 1,618 $ 34,036 $ 1,500 $ $ 223,025 . 7,246* $ $ 163,528* 3,230* LABOR Total nonagricultural employment in Texas (index)t Manufacturing employment in Texas (index)t .... Average weekly hours-manufacturing (index)t .. Average weekly earnings-manufacturing (index)t Total nonagricultural employment (thousands)t . Total manufacturing employment (thousands)t Durable-goods employment (thousands)t . . Nondurable-goods employment (thousands)t 115.3P 108.2p 98.3p 126. 7P 3,705.3p 711.5p 375.3p 336.2p 115.3p 108.9p 99.2p 127.4p 3,700.6p 712.1 p 377.oP 335.1 p 112.5r 107.5 98.5r 121.lr 3,612.9r 706.9r 375.lr 331.8r 115.3 108.6 98.8 127.1 3,703.0 711.8 376.2 335.7 112.5 107.9 98.6 121.2 3,610.1 707.4 376.1 331.3 Total civilian labor force in selected labor-market areas (thousands) . .......... . .. ... .. 3,555.2 3,552.9 3.473.6 3,5 54.1 3,475.3 Nonagricultural employment in selected labor-market areas (thousands) .. . . .... . . .. . . . .... 3,349.1 3,340.4 3,265.9 3,344.8 3,267.5 Manufacturing employment in selected labor-market areas (thousands) ...... . ............ 591.7 592.0 591.0 591.9 593.0 Total unemployment in selected labor-market areas (thousands) .... .......... . . .. 130.4 138.3 135.7 134.4 137.0 Percent of labor force unemployed in selected labor-market areas . .. . ........ ... 3.7 3.9 3.9 3.8 4.0 BUREAU OF BUSINESS RESEARCH RETURN REQUESTED THE UNIVERSITY OF TEXAS AT AUSTIN SECOND-CLASS POSTAGE PAID AT AUSTIN. TEXAS AUSTIN, TEXAS 78712 TRADE AND INDUSTRIALIZATION IN THE CENTRAL AMERICAN COMMON MARKET: THE FIRST DECADE by Karel Holbik and Philip L. Swan Studies in Latin American Business No. 13 As the decade of the 1960's opened, a quickening pace of economic change was felt in Latin America. Hopes and tensions ran high as the area turned to experiments in revolution, reform, and integration to stimulate growth, lessen external dependence, and give new strength to the Latin American voice in world affairs. In Central America five small republics galvanized themselves into a series of agreements which led to a General Treaty for Central American Economic Integration and formed what has come to be known as the Central American Common Market. Using an approach which was essentially across-the-board and surprisingly rapid, the five countries eliminated duties on trade among themselves and established uniform tariffs toward the outside world. In this study Karel Holbik, professor of economics at Boston University, and Philip L. Swan, assistant professor of economics at the same institution, neatly trace the development of the Central American Common Market and evaluate its results, from its antecedents in recent history, through its impressive achievements in trade liberalization, to its serious bottlenecks of technology and market size and its crisis of open conflict between Honduras and El Salvador. xiii+ 67 pp. (Texas residents pay $.13 sales tax.) $2.50 Bureau of Business Research The University of Texas at Austin