"Overall, the slowing of the economy will not hurt Texas as much as it will in the rest of the country," surmised James Haughey, chief economist for Reed Construction Data. Texas is not overstocked with first-class office space as are the northeastern cities in the heart of the financial, insurance and consulting markets.

The residential market cannot be ignored. With residential development comes infrastructure installation, light commercial and school construction.

While the bubble has burst in other states, Houston has become the largest housing market in the United States, according to the U.S. Census Bureau. The Greater Houston area led the nation with 44,118 single-family permits issued (almost 10,000 more than Atlanta, Georgia) during the 12 months from October 2006 through 2007. Dallas ranked third with 29,064; Austin and San Antonio were also in the top 20.

Texas is also leading the nation in the number of people relocating here. The U.S. Census Bureau also shows that during the 12 months from July 2005 to July 2006, 345,000 people moved to Texas, more than any other state. Of course, this number includes the Hurricane Katrina evacuees who remained in Texas, but these people along with immigrants have created a great need for infrastructure in metropolitan areas of Texas. Immigrants coming into Texas bring a younger population, meaning we will need more schools, Haughey pointed out.

After a few quiet years following September 11, 2001, the hospitality market has rebounded strongly. The past two years have seen upscale hotel/condominium projects rising by the multitude in urban areas and Texas is seeing new themed resorts in areas that are established vacation destinations.

"The growth of population in Texas is dynamic," said Joe Champ, owner and president of Champ Hospitality LP. "The economy is strong and people have the leisure dollars.

"The development of upscale hotels in urban areas is going to remain strong, particularly those with hotel and condominium components combined," he continued. "Hotels have become much more expensive to build on a per-key basis, so combining hotel and condo components justifies the feasibility of the project."

Developers and architects are also looking for more efficiency in design, according to Champ — features like smaller room size; smaller but thoughtfully designed closet space; oversized showers instead of full bath tubs; and flat-screen televisions mounted on the wall instead of bulky 22-inch models stored in a huge armoires.

Unless the price of gasoline impacts the economy much more severely, Champ sees development in the upscale hospitality market continuing in 2008.

Champ also expects the construction of limited service hotels to remain steady over the next one to two years for travelers who are primarily interested in economical sleeping quarters without in-hotel food and other service amenities.

Champ Hospitality is developing the new Starwood aloft brand in Texas and has developed Westin Stonebriar Resort, Westin Riverwalk and Westin La Cantera Resort, plus Westin, Regal and other properties nationwide.

Texas' advantage in the shipping market is our lower costs, according to Haughey. "The west coast ports are crowded and expensive." With the opening of the Bayport Container Terminal expansion in January 2007, shipping activity at the Port of Houston has begun to increase.

As for collateral construction, "We're definitely seeing an uptick," said Billy Gold, senior vice-president of CB Richard Ellis in Houston. "The expanded capacity at Bayport and Barbours Cut have fueled a lot of speculative construction in that vicinity. Local developers are putting up industrial products primarily for the petrochemical, agricultural, cotton, feedstock, and building materials markets. And, we are now starting to see national developers coming in to get a toe-hold in this market."

With addition of a third set of locks along the Panama Canal, which are expected to be completed in 2014 or 2015, the shipping through Texas ports is expected to rise even more. The forward looking Port of Corpus Christi has embarked upon an expansion of its own, and should be poised to take advantage of this growth. The recently completed Joe Fulton International Trade Corridor at the Port of Corpus Christi opened up 4.5 miles of ship channel frontage for industrial development.

The additional traffic that has already materialized and that will continue to grow on Texas's north/south interstate arteries from ports of entry into the Midwest is the driving factor in the development of multiple Trans-Texas corridors: TTC-35, I-69/TTC and the Ports-To-Plains.

Former cotton and milo fields south of Dallas are being leveled for distribution and warehousing along Interstate 45 (Houston-Dallas route) near the Union Pacific (UP) Intermodal facility that was completed in 2005. The same scenario is taking place along Interstate 35E (Laredo-San Antonio-Austin-DFW Metroplex) near the future Burlington Northern Santa Fe (BNSF) Intermodal facility in what is becoming known as the Dallas Southern Gateway.