The slowing economy is starting to show up in central Texas as the region's major attractions, dining, shopping, and general tourism is showing signs of slowing.

Our monthly junion tennis trek took us to Austin, the capital of Texas this weekend, a place we visited twice last year, in January and July. Both times were similar. Highway traffic on I-35 on Friday was brutal, with rush hour conditions prevailing all the way from Dallas to Austin. We recall on one of the trips that we did taped an interview with Jim Puplava (www.financialsense.com) and that during the conversation we were wondering how drivers were ignoring the high gasoline prices that were prevailing at the time. This time the drive was easy as traffic was mild to moderate the whole way.

Along the drive, both ways, several things stood out that were worth noting:

• Gasoline prices were at least ten cents higher than in some areas of Dallas, with regular anywhere from 1.69 to 1.75 per gallon. This was strange given the low price of oil and the decreased demand that was evident in the low flow of traffic.
  
  
• There were a significant number of empty billboards both driving north and south, confirming the reports from media companies about the slowing in advertising.
  
  
• There was lots of farmland for sale, as there were lots of shuttered antique shops and other small businesses along the way. Some of these were open for business six months ago. The weakness was more evident south of Waco, which is essentially the halfway point between Dallas and Austin, although there were some of the same things evident on the drive to Waco.
  
  
• Waco, where we penned this column from in December (http://www.joe-duarte.com/saved_newsletters/2008_12/2008_1208_market_IQ.html) seemed just a bit slower as we drove through, but not to the degree that Austin had slowed.
  
  
• Hotel parking lots, often a good indicator of highway traffic was also telling. While some of the well known names, such as Holiday Inn, La Quinta, and Marriott, especially in the areas where populations were larger, had clear occupants, hotels along the road, especially Best Western and some of the locally owned ones, mostly sported empty parking lots. Several Motel Six, ultra bargain stops, were also less full than we've seen in other trips.
  
  
• Our favorite sign of the state of the economy, casual dining, went right along with the rest of the indicators. A TGI Friday's that we visited in December and walked away from because of a thiry minute wait, took us to our table with no wait. There was one other person in the lobby, waiting for the rest of her party. There were patrons throughout the restaurant, but there were also lots of open tables. The same thing was evident at a Chili's we visited on Saturday. And the geographical areas made no difference. The TGI Friday's was in North Austin, an upscale area of town, while the Chili's was in the University of Texas area, a more modest section of town.
  
  
• We spent some time with an upscale restaurant owner from Houston, who told us that his business is fine because he is well established, has a loyal clientele, and is located in an upscale part of Houston. But even he's noticed some changes. Among the most notable, he told us, is the fact that his catering jobs are more modest, and seem to have gotten fewer. He's also had to throw in some incentives, such as adding a bartender for no extra charge in order to entice the clients.

A quick scan of the employment news in Austin shows that there are some concerns, as elsewhere in the country. According to the Statesman.com, applicants are flocking to Kyle, TX, a small town south of Austin, for part time work at a new Kohl's department store that is opening there. Many of the applicants have recently lost their jobs and are willing to take part-time jobs in the meantime. The report noted that "The Kohl's job fair is targeting applicants for part-time positions that include sales, record-keeping, unloading and stocking inventory, and custodial work. Wages range from $7.50 to $13 an hour."

Here are two examples of people's situations with regard to the job market and their application for a job at the Kyle Kohl's: "Yvette Lopez, 35, who has three children, said the store's proximity to her home would make getting to work easy if she gets the sales clerk position she hopes for. It would be her second job." Her other job is in home health care. Robert Pedraza, 40, of Kyle, who works for an industrial supply company, said he, too, applied for the security he thinks holding down two jobs will give him and his family."

On the other side of the coin is the government, which depends on tax receipts for its income. According to The Statesman: "Austin and other area governments may be forced to deepen spending cuts, based on the latest report of sales tax revenue from the state comptroller's office. The report, which analyzes November sales tax receipts, shows that the state is slightly up overall in the face of declining national spending. But cities such as Austin and Round Rock, which have anxiously watched their declining revenue, saw a deepening slide during the last fiscal year."

Conclusion

The slowing economy is increasingly evident in the state of Texas, which as recently as December was showing signs, at least in some areas, of weathering the storm fairly well.

While Dallas seems to be holding up fairly well, Austin, which is more dependent on tourism and services beyond health care, is starting to feel the pinch. The fact that Dell Inc. is one of the major employers in the area, and that technology is weakening, is clearly an influence. Yet, Austin has The University of Texas, which is a major employer, and a bringer of revenue, in the form of grants and tuition to the city, so it may weather the storm a bit better than other cities.

Perhaps the most worrisome of signs for us, is the speed with which the vibrant I-35 corridor between Dallas and Austin, especially south of Waco, is starting to deteriorate, with empty billboards and acres of farmland up for sale. We'll be headed this way again in July. Next Tales from the Road is scheduled for mid February. Stay tuned.

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