Tuesday AM March 11th, 2008
by: Ed Mayberry, March 11, 2008 12:03:00 pm
Houston employers expect to hire at a strong pace during the second quarter, according to the Manpower Employment Outlook Survey. Manpower says from April to June, 29 percent of companies interviewed plan to hire more employees. Two percent expect to reduce their payrolls. Another 54 percent expect to maintain their current staffing levels. That's weaker than predictions at the same time last year. Construction hiring is expected to be down, but job prospects appear best in energy, manufacturing, transportation and public utilities, wholesale and retail trade, education, as well as in and services and public administration.
An estimated 370,000 Texas businesses will be getting a tax cut of $90 million, according to Governor Rick Perry. He credits the state's strong economy and low unemployment. The tax cut is a one-year suspension of the 0.12 percent Unemployment Insurance Trust Fund replenishment tax. Texas created more jobs than any other state in 2007. Some businesses will remain eligible for a surplus tax credit tied to unemployment taxes. Additionally, employers will save about $270 million on taxes because bonds issued in 2003 to bolster the Texas Workforce Commission's funding were paid off early.
The Federal Reserve Bank of Dallas says the weakened housing market is beginning to show itself in Houston. The Fed says the biggest indicator is that single-family construction permits were down 27 percent from January 2007. Existing-home sales were down 14 percent and year-to-date foreclosures are up 16 percent in the first two months of 2008. The Houston Purchasing Managers Index has fallen to a more modest expansion compared to last fall. The Fed notes that oil prices are at record levels, but sales of gasoline and chemicals are weak. Retail and auto sales—other than food stores and some discounters—note disappointing sales so far in 2008. Auto sales were down 1.4 percent in January. Non-residential construction new building permits were up 27 percent in 2007.
Banco Bilbao Vizcaya Argenta has received regulatory approval from the Federal Reserve Bank of Atlanta to complete the integration of its banks under the Compass Bank name. The Spanish financial firm is merging the Laredo National Bank, State National Bank and Texas State Bank. The merger makes Alabama-based Compass Bank the fourth-largest in Texas. BBVA finalized its acquisition of Compass in September 2007. BBVA USA Bancshares is based in The Woodlands.
Media reports say federal authorities are investigating Countrywide Financial for securities fraud. The Wall Street Journal says the FBI is in the early stages of an inquiry into whether company officials misrepresented Countrywide's financial position and the quality of its mortgage loans. It cites law enforcement officials and finance executives with knowledge of the development. One source told the Journal that investigators are looking into whether company executives knew their mortgage securities would see many more defaults than predicted in public documents. The New York Times, citing anonymous sources, says the Justice Department is also involved in the investigation into the nation's largest mortgage lender. A Countrywide spokeswoman told the times the company is "not aware of any such investigation.'' Countrywide's CEO was one of three mortgage industry executives brought before a Congressional committee Friday to defend their exorbitant pay at a time the industry was reeling.
The University of Houston has received an $8.8 million state grant to test diesel emission reduction technologies, according to the Houston Business Journal. The grant provide funding through August 2009. The UH Texas Diesel Testing and Research Center will use the grant from the Texas Commission on Environmental Quality to purchase a portable emission testing system and dynamometer.
A San Antonio publisher says newspapers can still be relevant in a changing environment with quality content and advertising delivered over multiple platforms. Thomas Stephenson is publisher and president of the San Antonio Express-News. He says "all media are learning as we go'' as new technology revolutionizes the mass media. His comment came in an address to the Texas Daily Newspaper Association's annual convention meeting in San Antonio. Stephenson delivered prepared remarks that had been planned for Hearst Newspapers President George Irish, who was unable to attend. The newspaper business has struggled with shrinking revenue and layoffs in many major newsrooms. Stephenson says newspapers will have to accelerate its move to digital platforms and ensure that advertising is sold the same way. He acknowledged that it is difficult to face newsrooms who have been repeatedly asked to do more with less, but he believes that news organizations will have to stay lean.
Dubai investors jostling with the Liverpool Soccer Club's American owners for a stake in the club say negotiations are progressing. Dubai International Capital said that it's in "advanced discussions'' with Liverpool Football Club co-owners Tom Hicks of Dallas and George Gillett, Jr., of Vail, Colorado. Dubai says no agreement's been reached on price or shareholding percentage. The statement came despite Hicks' denouncement of DIC's conduct in trying to acquire 49 percent of the club from Gillett. Hicks has insisted that other parties could be preferred to buy most of Gillett's stock. The Texan was furious with DIC's lead negotiator Amanda Staveley for leaking private correspondence to the media. Hicks threatened to block a deal worth $342 million for most of Gillett's stake. Last week, Hicks rebuffed DIC's $993 million bid for complete control of the club. That would have included paying off the refinancing package that Hicks and Gillett negotiated in January for the loan used to purchase the Reds.
Pittsburg-based Pilgrim's Pride announced that it's getting out of the turkey business. Chief Executive Clint Rivers said the small size of Pilgrim's Pride's turkey operations made it hard to earn acceptable profits. He said the sale would let the east Texas poultry giant focus on its core chicken business. The nation's biggest chicken processor says it has sold its new Oxford, Pennsylvania, turkey-production plant to a subsidiary of Hain Pure Protein Corporation. Financial terms weren't disclosed. Pilgrim's Pride said the sale didn't result in a material gain or loss. The plant and distribution center process 175,000 turkeys a week and employ about 530 workers. Pilgrim's Pride's entered the turkey business in 2001 with the purchase of WLR Foods. In its last fiscal year, Pilgrim's Pride reported U.S. turkey sales of $122 million.