Jim Gaines talks Texas, U.S. economies at ICSC retail forecast

​​DALLAS – The Tax Cuts and Jobs Act of 2017 might be a mixed bag, Real Estate Center Chief Economist Dr. Jim Gaines told the International Council of Shopping Centers’ 7th Annual Texas Retail Forecast on Friday.​

​​​“The corporate tax rate is getting the most attention, especially from small businesses,” he said. Pass-through provisions could also impact real estate entities. However, Gaines acknowledged, “that will take six months to a year to figure out. Right now, everyone is figuring out how to game the system.”

Meanwhile, the housing industry was, in Gaines’ words “sort of recovered.” A decade after the start of the Great Recession, housing still isn’t all the way back, he said.

“Theoretically, housing is around 75 to​​ 85 percent of where it should be,” he said. He thought the Fed would likely continue raising interest rates in 2018 “despite the fact that GDP and inflation aren’t where they need to be.”

​Meanwhile, the Texas economy fared well in 2017. Gaines explained that, from 2010-2014, Texas was “blowing and going, due to oil and energy.” 

Though the state’s economy took a hit from the oil price drop, that issue is in the past, thanks to demand for energy from abroad. 

“The energy sector downturn for Texas is over,” Gaines stated. “It took a hit in 2016, recovered in 2017, and will continue in 2018.” ​

​​Gaines said the Texas forecast is for 4.1 percent ​growth in 2018, versus the 2.9 percent growth forecast for the United States.