Commentary by Bruce Kellison
The lead above-the-fold story in today’s Wall Street Journal heralds the possible end to our recession with the release of Q3 ’09 GDP figures. The 3.5% annual rate of expansion in the third quarter halts four straight quarters of decline during a recession that officially began in December 2007. But what factors drove the Q3 expansion? From the article,
Without stimulus programs such as “cash for clunkers” and a first-time homebuyer’s credit, “real GDP would have risen little, if at all, this past quarter,” Christina Romer, president of the White House Council of Economic Advisers, said in a statement.
But the accompanying graphic included in the story identifies EXPORTS as being the single leading contributor to the expansion, worth 1.5 percentage points of the 3.5 percent jump. And Texas is the leading export state in the U.S., having surpassed California in 2002. Chemicals, computers and electronics, and machinery dominate Texas’ export product mix, and all are high value-added product categories. The real story behind the jump in GNP, then, might not be the dependency of consumers on government programs like “Cash for Clunkers” and the first-time home buyers’ tax credit, but the resiliency of firms to remain innovative, nimble, and competitive in a still-globalized economy. Texas was among the last states to feel the effects of the current recession, and many economists believe it will lag in recovery. But exports might mean Texas will lead, not lag, coming out of the recession.