ECONOMIC OUTLOOK HOUSTON REGION - ECONOMIC OUTLOOK
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HOUSTON REGION
ECONOMIC
OUTLOOK
H
E
DECEMBER 2022
OPublication Underwritten by: Greater Houston Partnership Research December 2022
INTRODUCTION
There’s a growing consensus among As a result, the housing market The law of supply and demand has
economists that the U.S. will slip into grew very tight. Homes which sat already kicked in. In September,
recession in ’23. If the U.S. stumbles on the market for weeks prior to single-family starts were down 18.5
down that path, Houston will follow. the pandemic sold in a few days, percent nationwide compared to
There’s some hope that the U.S. many for well above their list prices. the prior year. Existing home sales
may avoid a downturn, but the odds The inventory of available homes were down 23.8 percent. And
grow slimmer each day. An October fell to record lows. Prices climbed. loan applications were down 29.2
survey of economists by The Wall In May ’20, the median price for a percent (Q2/22 v Q3/22). As interest
Street Journal placed the probability single-family home in Houston was rates continue rising, demand
of a recession within the next 12 $298,439. By May ’22, the price had will fall further.
months at 63 percent, that’s up from jumped to $350,000.
49 percent in the July survey and The housing market provides a
16 percent in October ’21. A similar Mortgage rates were already ticking glimpse of what can be expected
survey by Bloomberg places the up late in ’21. The Fed accelerated the in other sectors of the economy,
odds at 60 percent. pace. As the Partnership prepared especially those sensitive to
this forecast, the 30-year fixed-rate interest rates.
The recession may have several hit 7.08 percent, the highest level in • Orders for consumer durables (e.g.,
causes, but the main trigger will be nearly two decades. appliances, electronics, furniture)
the U.S. Federal Reserve raising
The best time to buy a house in are already flat, have been that way
interest rates to combat inflation. As
Houston was January ’21. The interest since June, and are likely to decline
of October, inflation tracked at a 7.7
on a 30-year fixed-rate mortgage in coming months.
percent annual rate, well above what
the Fed considers ideal for price hovered at 2.60 percent, the median • The construction industry has
stability. So, the Fed must act. price of a single-family home was seen projects canceled that won’t
$263,000, and the monthly principal generate sufficient cash flow to
When the Fed raises rates, any and interest were $842. By October service debt issued at higher rates.
purchase that’s financed—homes, ’22, the mortgage rate had more than
• Valuations for existing office,
vehicles, inventories, machinery, doubled, the price of that home was
industrial, and retail properties
construction materials, real estate— $330,000, and the monthly principal
have fallen in several markets.
becomes more expensive. As costs and interest climbed to $1,773. That
rise, businesses and households doesn’t include taxes, insurance, or • Banks have begun setting aside
consume less. Supply catches up with homeowners’ association fees. reserves to cover losses on
demand and prices stabilize. The Fed expected loan defaults.
has raised interest rates at six of the
first seven meetings of the Federal
Open Market Committee in ’22 and
will likely continue raising them in
’23. Those hikes have already hit the INTEREST ON AVERAGE 30-YEAR FIXED RATE MORTGAGE
housing market.
12
Demand for housing soared as the
U.S. emerged from the lockdowns 10
imposed in the early stages of the
pandemic. The Millennial Generation 8
was in its prime home-buying years
Percentage
(and still is). Renters in high-cost
6
metros of the Northeast and West
Coast relocated to the low-cost
4
suburbs of the South and Southwest.
Americans wanted more space
2
when working remotely, so they
bought larger houses. The ultra-low
mortgage rates at the time made 0
’90 ’92 ’94 ’96 ’98 ’00 ’02 ’04 ’06 ’08 ’10 ’12 ’14 ’16 ’18 ’20 ’22 ’24
buying that home more affordable.
Source: Freddie Mac
Greater Houston Partnership Research December 2022 | 1In a recent survey by the National
Association for Business Economics, RECENT U.S. RECESSIONS
roughly one-third (31 percent) of Recession Date Causes
respondents indicated higher interest
rates posed the greatest risk to their 1980 Interest rate hikes
firms in ’23. Only 16 percent replied
1981-1982 Oil price hike, interest rate hikes
that inflation/cost pressures were
the greatest risk. Oil price hike, elevated debt, consumer
Early 1990s pessimism, interest rate hikes
Economists worry that the Fed will Dot-com bubble collapse,
raise rates too high and hold them Early 2000s drop in business investments, 9/11
there for too long, extending the pain
Great Recession, 2008-2010 Subprime mortgage crisis
longer than necessary. They note that
rate hikes have contributed to three COVID Recession, 2020 Global pandemic
of the past six U.S. recessions.
Source: Greater Houston Partnership Research
HISTORY WON’T REPEAT ITSELF
This time should be different, Third, the quality, timeliness, and would range between 2.4 and 2.9
however. First, the current bout of availability of economic data have percent for the quarter. When BEA
inflation hasn’t been around long. greatly improved, helping the bank released its official estimate, the rate
When the Fed aggressively raised follow trends, recognize inflection was 2.6 percent.
rates in the late ‘70s, inflation had points sooner, and act more quickly
averaged 6.0 percent or higher for than in the past. And the Federal Reserve Bank
nearly a decade. By comparison, of Dallas (www.dallasfed.org) has
the current spate of inflation has The Federal Reserve Bank of St. developed what many consider to be
tracked above 6.0 percent only since Louis (www.stlouisfed.org) maintains a more accurate measure of inflation
October of ’21. a database of over 810,000 U.S. and than the Consumer Price Index (CPI).
international economic indicators. The Dallas Fed’s “Trimmed Mean
Second, inflation isn’t as high as it PCE Inflation Rate” excludes price
was back then. The rate touched The Federal Reserve Bank of Atlanta changes at both ends of the spectrum
14.6 percent in March ’80, forcing (www.frbatlanta.org) produces a to eliminate the influence any outliers
the Fed to hike rates to 19.1 percent “nowcast” of Gross Domestic Product have on the inflation calculation. The
before inflation began to fall. By (GDP). Referred to as “GDPNow,” it Trimmed Mean PCE also accounts for
comparison, inflation peaked at 9.0 provides economists with a weekly changes in consumer behavior due
percent in June ’22 and has declined forecast of GDP prior to the official to changes in prices. For instance, if
since. It slipped to 7.7 percent in measure that the Bureau of Economic the price of beef goes up, consumers
October ’22, but that’s still too high Analysis (BEA) releases each quarter. might shift to eating pork. In August,
for the Fed’s liking. In the weeks leading up to BEA’s the annualized Trimmed Mean rate
Q3/22 estimate, the Atlanta Fed was 4.7 percent.
forecasted that real U.S. GDP growth
DIFFERENT CAUSES, DIFFERENT OUTCOMES
Interest rate recessions tend to GDP shrunk by 4.0 percent. Since financial system as it nearly did in the
be milder than those caused by then, institutions have adopted Great Recession.
economic events or pandemics. Take stricter lending standards, banks are
two recent examples. The bursting more carefully regulated, and they Fear of contagion shut down the
of the U.S. housing bubble and the have healthier balance sheets. And economy in the early stages of
collapse of U.S. financial institutions unlike 15 years ago, today’s housing the pandemic. Over two months,
precipitated the Great Recession. market is not overbuilt. A surge in more than 22.0 million Americans
The nation shed 8.7 million jobs and loan defaults won’t collapse the U.S. lost their jobs. U.S. GDP shrank by
over 10 percent.
2 | Greater Houston Partnership Research December 2022If there’s another serious outbreak,
policy makers won’t take such RECENT U.S. RECESSIONS
draconian measures. They fear the Duration Drop in GDP Job Losses Unemployment
political backlash. Vaccinations have Dates (months) (%) (millions) Peak (%)
made the virus less lethal. And the
nation has learned how to live with Jan ’80 – Jul ’80 6 2.2 1.2 7.8
and work around the virus.
Jul ’81 – Nov ’82 16 2.6 2.7 10.8
By contrast, recessions caused by
Jul ’90 – Mar ’91 8 1.4 1.6 7.8
rate hikes tend to be less severe and
end more quickly, as shown in the Mar ’01 – Nov ’01 8 0.4 2.6 6.3
first three rows in the table on the
Dec ’07 – Jun ’09 18 4.0 8.7 10.0
right. Hopefully, that will be the case
with the next recession. Feb ’20 – Apr ’20 2 10.1 22.0 14.7
Source: Greater Houston Partnership Research
BETTER PREPARED
Houston has developed considerable Next year’s downturn will likely be job openings in September. Prior to
muscle mass since the last downturn. a glancing blow for Houston, not the pandemic, job openings averaged
Employment in September hit a a head-on collision. Jobs will be 6.5 million a month.
record high. The region created lost in a few sectors while others
more jobs in the first nine months expand. During the Fracking In a recent CEO survey, The
of ’22 (108,600) than it creates in a Bust (’15-’16), Houston shed over Conference Board found that 98
normal year. And initial claims for 100,000 energy-related jobs. Other percent of respondents expect
unemployment benefits, a proxy sectors of the economy expanded a recession in 12-18 months, yet
for layoffs, remain well below as energy contracted. Despite the 86 percent plan to maintain or
pre-pandemic levels. hemorrhaging, total job losses increase their capital budgets and
amounted to fewer than 5,000 over 44 percent plan to continue hiring
By comparison, only 34 of the nation’s the two years. A similar situation will during the downturn.
50 most populous metros have play out in ’23. Houston’s interest-
recouped all their pandemic losses, And a recent survey by the National
rate-sensitive industries will shed
12 of them just barely. If a recession Federation of Independent
jobs as growth in other sectors
arrives on their doorsteps, they’re not Businesses found that 46 percent
offsets those losses.
as well prepared to greet it. of respondents had job openings
The U.S. may avoid significant job they could not fill. With such difficulty
losses as well. The national labor replacing workers laid off in the last
market is tight, with over 10.7 million recession, employers will be reluctant
to let them go in the next.
A DARKER VIEW
But the downturn could also be 6.0 and 8.0 percent. Economists The European Union imposed
worse than expected. Factors the expect growth of 2.0 to 3.0 percent sanctions on Russia over its invasion
Fed has no control over could crash this year. The nation continues of Ukraine, Russia has retaliated by
the economy. These include global to lock down large swaths of its halting natural gas deliveries. Closing
food shortages, intractable supply economy during COVID outbreaks. the valves has already forced some
chain disruptions, severe energy An overbuilt real estate market may manufacturing plants in Europe
shortages, a more deadly COVID lead to widespread loan defaults to shut down. Soon, Europe will
variant, or a steep escalation of the further stifling its economy. And stop importing Russian crude and
war in Ukraine. Chinese President Xi Jinping’s recent refined products as well. Energy
consolidation of power has rattled shortages and higher prices could
China and Europe pose the biggest Asian financial markets. It wouldn’t tip the EU into a recession if it’s
threats. Fifteen years ago, China grew take much to tip the world’s second- not there already.
at double-digit rates. Over the last largest economy into recession.
five years, growth slowed to between
Greater Houston Partnership Research December 2022 | 3WHITHER THE U.S.?
The U.S. will follow one of three SHORT AN D SHALLOW greater control over the economy.
paths in ’23. The baseline scenario Investors shun the country. China
is for a short and shallow downturn, Inflation proves stubborn and the Fed slips into recession. In the U.S., labor
with growth resuming in Q3/23. The raises interest rates well into the new shortages persist and wages spiral
best-case is for slower growth but year. Interest-rate-sensitive industries upward. Inflation remains stubbornly
no recession. The worst-case is for (e.g., real estate, construction, high. The Fed continues to hike
a recession that begins in ’23, is durable goods manufacturing) suffer. rates. The recession worsens. As the
exacerbated by factors outside the The decline spills over into sectors presidential election approaches,
Fed’s control, and drags into ’24. The that support those industries (e.g., partisan politics prevent Congress
Partnership assigns a 50 percent finance, engineering). Firms reduce from enacting any relief package.
probability to a mild recession, a 30 their workforces accordingly. The Job losses mount. U.S. real GDP
percent probability to slower growth, economy contracts in Q1 and Q2. contracts more than 2.0 percent. By
and 20 percent to a prolonged The Fed halts rate hikes before the December, the unemployment rate
recession. The scenarios are damage worsens. Growth resumes exceeds 7.0 percent.
outlined below. late in ’23. The year finishes with
unemployment under 6.0 percent and Implications for Houston
A N E AR MISS real GDP growth under 1.0 percent.
Momentum carries Houston through
In the best-case, Fed rate hikes have Implications for Houston mid-year before the national
the desired effect and consumers recession begins to weigh on the
reduce their spending. Supply quickly The U.S. slump impedes Houston’s region. Businesses postpone hiring
catches up with demand and price momentum but does not stop its and investment decisions. Crude
pressures ease. Employers, facing growth. Construction leverages a consumption falls. Exports taper off.
labor shortages, avoid layoffs. Job deep backlog of projects. Energy The year ends with marginal gains in
losses occur, but only in interest-rate- benefits from higher prices and all but a handful of sectors. Gains in
sensitive industries. The Fed scales shortages overseas. The region the first half of the year are whittled
back rate hikes in Q1 and halts them continues to attract job seekers from down by job losses in the second
in Q2. Markets recognize the signal other metros. Population growth half. Most sectors manage to eke
and investment and hiring picks up. lifts the demand for health care, out gains, but just barely. Businesses
By Q3, growth resumes. The year education, and government services. and consumers look to ’24 with
finishes with unemployment under An improving U.S. economy provides cautious optimism.
5.0 percent and real GDP growth just a mid-year boost to Houston. The
under 2.0 percent. year ends with net job growth across To summarize:
all sectors of the local economy.
• The baseline forecast calls for
Implications for Houston
DEEPER AN D LONGER a short and shallow recession,
Momentum from ’22 carries Houston growth resuming in Q3, the year
into ’23 buffering the region from a Forces beyond the Fed’s control ending with a net gain of 60,800
serious downturn. Crude shortages take over. The war in Ukraine drags jobs. The long-term average for
and high prices stimulate hiring on. Food shortages worsen. High Houston is 65,000 to 70,000 jobs
and investment in the energy energy prices tip Europe into a deep per year.
sector. Plant shutdowns in Europe recession. Beijing’s zero-COVID • The best-case assumes the U.S.
boost demand for Houston-made policy continues to disrupt supply recession misses Houston entirely.
chemicals and plastics. The Port chains. The Chinese real estate The year ends with a net gain of
of Houston logs its busiest year on market collapses. Beijing exerts 79,200 jobs.
record. New home construction
drifts down to pre-pandemic levels.
RECESSION SCENARIOS
Home price appreciation resets to
a single-digit pace. Nonresidential Scenario Likelihood Jobs Gains
construction remains strong. Another
50,000 residents move to Houston Near Miss 30% 79,200
seeking affordable housing, career
opportunities, and warmer winters. Short and Shallow 50% 60,800
Employment growth continues Deeper and Longer 20% 30,400
uninterrupted.
Source: Greater Houston Partnership Research
4 | Greater Houston Partnership Research December 2022• The worst-case recognizes that Growth will be strongest in Houston’s Job losses will occur in only a handful
factors outside the Fed’s control construction, energy, government, of sectors, and then only in the
might prolong the recession. health care, professional, services, worst-case scenario. Now the details
Houston is well-buffered to handle and restaurant sectors across behind the forecast.
the downturn, but growth slows all scenarios.
considerably. The year ends with a
net gain of 30,400 jobs.
ENERGY (EXPLORATION, OIL FIELD SERVICES)
Oil prices have more than doubled The industry has seen a massive and everywhere, investors insist
from where they were two years exodus of talent. Statewide, headcount firms focus on growing profits not
ago. The spot price for West Texas has dropped by over 16,000 workers production. This has precipitated a
Intermediate (WTI), the benchmark for since Q1/17. It also struggles to attract decline in drilling activity which began
U.S. light, sweet crude, averaged $88 talent. Recent college graduates see four years ago, when the rig count
per barrel in October ’22, up from $40 oil and gas as a dying industry. peaked at 1,083 in December ’18. As
per barrel in October ’20. of early November, only 779 rigs were
Many of the best sites have already working in the U.S.
Normally, rising prices signal the been drilled. The Permian rig count
need to boost production. OPEC+ has more than doubled over the past Profits that a few years ago would
has provided an additional incentive, two years, but production is up a have been plowed back into
announcing it would soon pull little more than 50 percent. The U.S. exploration programs are being
2.0 million barrels per day (b/d) of Energy Information Administration’s redeployed to alternative energy
production off the market. And the Drilling Productivity Report (DPR) for projects. Any increase in exploration
Biden Administration has released October ’22 shows the average output budgets quickly gets eaten up by
nearly 180 million barrels from the from a new well in the Permian Basin higher materials and labor costs.
U.S. Strategic Petroleum Reserve. peaked in December ’20 and has
Eventually, that oil will need trended down since. The Biden Administration has
to be replaced. promulgated new rules and
Investors have also imposed capital regulations which have increased
As recently as November ’18, the U.S. discipline on the industry. After costs without increasing production.
led the world in crude production, years of financing wells anywhere
ahead of #2 Russia and #3 Saudi
Arabia. The U.S. currently has over
32.2 billion barrels of proven reserves. U.S. RIG COUNT
And over the last six months, crude
prices have ranged from $80 to $120 1,200
per barrel on the spot market, well
above the break-even price of $60 1,000
to $70 per barrel, depending on the
Working Rigs
well. Yet as of October, U.S. daily 800
production remained 1.2 million barrels
below its recent peak. 600
Boosting domestic production remains 400
difficult for many reasons. For one,
mergers, bankruptcies, and voluntary
200
liquidations have shrunk the industry.
There are 500 fewer oil and gas
0
firms operating in Texas today than ’17 ’18 ’19 ’20 ’21 ’22 ’23
five years ago.
Source: Baker Hughes
Greater Houston Partnership Research December 2022 | 5Finally, many investors have dropped at or above current levels will narrow If the U.S. skirts a recession, the
oil and gas from their portfolios that gap. EIA’s Short-Term Energy energy industry will, too. Only if the
because of the industry’s association Outlook suggests that might happen world sinks into a deep recession
with climate change. in ’23. The agency forecasts: would the industry face significant job
losses. But then so would every other
Energy is one of the few sectors in • Global consumption to rise 1.5
industry in Houston.
Houston still struggling to recoup million barrels per day (b/d),
all the jobs lost in the COVID • Domestic crude production to In the baseline scenario, the forecast
recession. As of September ’22, the average 12.4 million b/d, up from calls for a gain of 4,500 jobs; in the
industry remained 10,000 jobs below 11.7 million b/d in ’22, and best-case, a gain of 5,500; in the
pre-pandemic levels. Strong demand, worst case, 2,000.
• WTI to average $89 per barrel in
U.S. production growth, and prices
’23, down slightly from $96 in ’22.
MANUFACTURING
Manufacturing is another sector that A few other sectors—food processing, energy consumption; demand for oil
has yet to recover all of its pandemic textiles, clothing, furniture, electronics, field equipment would fall. A broader
job losses. As of September ’22, industrial machinery, and paper— recession would lead to a drop in
employment was 7,200 jobs below round out the industry. global manufacturing; demand for
where it stood in February ’20. chemicals and plastics would fall.
Houston’s manufacturing sector faces The U.S. housing slump has already
Blame the sector’s laggard multiple challenges in ’23. A U.S. cut into the demand for piping,
performance on energy. Most of recession would lead to a drop in insulation, flooring, and building
the missing jobs are tied to the
manufacture of oil field equipment
and fabricated metal products (e.g.,
METRO HOUSTON MANUFACTURING, Q1/22
pipes, valves, and flanges). Energy-
related manufacturing won’t see job Industry Plants Employment
growth until drilling activity climbs
past pre-pandemic levels. Textilles and Apparel 224 2,465
Houston’s chemical sector has done Wood, Paper, Printing 673 9,908
well recently. The region has 67 Petroleum Products 94 8,608
more chemical plants and employs
1,600 more workers than it did five Chemicals 647 39,851
years ago. Fracking generates a Plastics and Rubber 236 10,972
steady supply of natural gas, the main
Nonmetallic Minerals 290 6,982
feedstock of U.S. petrochemicals,
and has rejuvenated what two Primary Metals 132 3,159
decades ago was considered a dying Fabricated Metal Products 1,756 44,993
U.S. industry.
Industrial Machinery 843 39,264
Goodman Daiken, the Tokyo-based Computers and Electronics 419 13,266
manufacturer of heating and cooling
systems, is an industry unto itself. Electrical Equipment 191 5,878
Employment at the firm has more than Transportation Equipment 151 4,341
doubled to nearly 10,000 workers
Furniture 180 3,067
since the opening of its massive plant
in northwest Houston. The company Misc. Manufacturing 496 7,556
continues to hire. Total 6,332 200,310
Source: Texas Workforce Commission
6 | Greater Houston Partnership Research December 2022components. A recession would In the baseline scenario, the forecast
also lead to reduced business and calls for a gain of 4,600 jobs; in the
leisure travel, curbing the demand for best-case, a gain of 6,100; in the
gasoline, diesel, and aviation fuels. worst case, 1,500.
CONSTRUCTION
Houston’s construction industry
CONSTRUCTION CONTRACTS AWARDS,
will enter ’23 with a considerable $ MILLIONS, METRO HOUSTON
backlog. Dodge Data & Analytics
reports nearly $31.0 billion in Sep ‘22 YTD Sep ‘21 YTD % Change
construction contracts were awarded
in the first nine months of ’22, up from Commercial 4,063.2 2,857.9 42.2
$23.3 billion over the comparable Manufacturing 6,253.6 1,023.9 510.8
period in ’21. That’s a 22.7 percent Education & Science 1,437.8 1,611.9 -10.8
increase after adjusting for inflation.
Hospitals & Health 1,827.4 500.5 265.1
The region has seen a surge in Religious 178.5 57.7 209.4
commercial, manufacturing, hospital,
multifamily, and infrastructure Amusement 315.2 312.3 0.9
projects. Single-family construction Single-Family 9,384.0 9,799.0 -4.2
is flat. Institutional work (e.g. schools, Multi-Family 1,974.0 1,541.2 28.1
libraries and museums, for instance)
Infrastructure 4,808.3 4,749.1 1.2
has slipped but remains elevated.
Other 750.1 880.5 -14.8
Over 27.3 million square feet (MSF)
of industrial space, more than 4.6 Total 30,992.1 23,334.0 32.8
MSF of retail space, and 3.2 MSF of Source: Dodge Data & Analytics
office space was under construction
at the start of Q4/22, according to captured in payroll employment data media reports that rents have
Partners Real Estate. Vacancy rates which this forecast focuses on. fallen significantly in other metros.
for industrial and retail, 5.6 and 5.3 If that happens here, multifamily
percent respectively, support the Apartment Data Services reports that construction will slow but not
need for additional space. The rate Houston had over 19,600 apartment halt entirely.
for office, 29.9 percent, does not. Still, units under construction in November
there’s office construction underway, ’22. Roughly 5,600 were slated for Work is underway on the Texas
mostly in niche markets, like the completion by the end of the year, Medical Center’s Helix Park. Billed
Texas Medical Center, or for tenants another 12,600 by tend of ’23, and as “The World’s Most Advanced
willing to pay a premium for new the remainder in ‘24. Apartment Data Research Campus at the World’s
space full of amenities. is tracking 113 projects containing Largest Medical Center,” the 37-acre
over 35,000 units that developers park will eventually include over 5.0
As the Partnership prepared this have proposed for Houston over the million square feet of proprietary
forecast, builders were on pace to next few years. research centers, multidisciplinary
construct 40,000 single-family homes labs, healthcare institutions, a hotel
in ’22. Rising interest rates, higher Class A rents have risen 20 percent and conference center, a residential
home prices, and greater economic since October ’20 but peaked in tower, retail, restaurants, and a
uncertainty will reduce that to around the late summer. Occupancy for unique double-helix green space. The
30,000 in ’23. This would be a return properties open a year or more was project is estimated to have a $5.4
to normal for the region. Most single- 93.5 percent in October. Rents for billion impact on Houston, support
family work is done by independent all property classes appear to have over 19,000 jobs during construction,
contractors, so the slowdown isn’t peaked in August. The national and create 23,000 permanent jobs.
Greater Houston Partnership Research December 2022 | 7The $7.9 billion North Houston On average, a single-family home can employment should hold steady for
Highway Improvement Project be completed in three to six months some time, hopefully until interest
would provide an enormous boost once construction begins. Industrial rates decline and a host of new
to the region’s economy. If the developers can finish a warehouse projects are financed.
Texas Department of Transportation in a year. A moderate-size suburban
decides to rebuild I-45 near apartment complex requires 12 or In the baseline scenario, the forecast
downtown from U.S. 59 to Beltway more months. A hospital takes three calls for a gain of 6,300 jobs; in the
8 North, the work would support to six years. Chemical plants require best-case, a gain of 7,500; in the
thousands of construction jobs over an equal amount of time. Given worst case, 3,800.
several years. the current backlog, construction
WHOLESALE TRADE
Wholesalers are key to the global Next year’s wholesale outlook would flatten early on, turn negative
supply chain. They acquire goods in depends on the industries it serves. mid-year, and resume in the fall. If a
bulk, hold them in warehouses, then Construction and health care will sharp, deep recession hits, wholesale
redistribute those goods to builders, prosper. The prospects for retail and like most other sectors would suffer
hospitals, manufacturers, offices, restaurants are strained. Weakness serious job losses.
restaurants, and retailers. In Houston, in China and a recession in Europe
wholesale activity focuses on may dampen chemicals and plastics In the baseline scenario, the forecast
chemicals, fuels, furniture, groceries, exports. There will be a steady flow calls for a gain of 3,800 jobs; in the
household appliances, industrial of orders from the energy sector to best-case, a gain of 5,000; in the
machinery, lumber, metals, oil field replace and upgrade equipment. worst case, 2,500.
equipment, and plastics.
In the best-case, job growth maintains
Wholesalers interact with every a steady pace throughout the year. In
industry in the U.S., which makes a short, shallow downturn, job growth
them the canary in the coal mine for
the nation’s economic health. Sales
have tracked above pre-COVID HOUSTON PURCHASING MANAGERS INDEX
levels since October ’20 but appear Above 50 = Expansion
to have plateaued in July. No sign
70
of a recession but definite signs
of a slowdown.
65
Local wholesale data is only available
with a 12-month lag, so it’s not the 60 Expansion
canary for Houston’s economic health.
The Houston Purchasing Manager’s 55
Index
Index serves that purpose. Readings
above 50 indicate the economy is 50
growing and will likely continue to do
so over the next three to four months. 45
Contraction
Readings under 50 signal contraction.
The PMI registered 52.9 in October. 40
Since rising above 50 in August ’20,
it’s indicated strong to moderate
35
growth for 28 consecutive months.
30
’17 ’18 ’19 ’20 ’21 ’22 ’23
Source: Institute for Supply Management-Houston
8 | Greater Houston Partnership Research December 2022RETAIL TRADE
Retail has recouped all 39,800 running up credit card debt. At some in the fall and the pattern repeats
jobs lost in the pandemic, added point, they will exhaust their savings itself come January. The pattern
more than 700 stores and outlets or max out their cards and retail may not repeat itself in ’23, however.
since Q1/20, and seen a dramatic sales will fall. If a recession hits, retailers won’t
increase in sales from the low point of rebuild their teams. Even the threat
the pandemic. The drop in home sales has already of a recession could chill retailers’
led to a drop in furniture, electronics, plans. Hiring might not occur until the
Houston’s retail sector owes its and garden equipment sales. Next holiday season arrives next fall.
recovery to population growth year, workers who go from receiving
(200,000 new residents since paychecks to receiving unemployment There’s a real estate adage that
July 1, 2019), employment growth benefits will reduce their spending. “retail follows rooftops.” As families
(over 450,000 jobs since May And while consumer sentiment has move to the suburbs, store operators
’20), the housing boom (100,000 improved in recent months, it remains follow. Houston’s housing boom
new homes over three years), below pre-pandemic levels. has supported much of the sector’s
Congress’s generosity (three stimulus growth over the past two years.
packages during the pandemic), and Historically, retail employment It will continue to do so in ’23 but
pent-up demand. has followed a pattern. The sector at a slower pace.
sheds jobs in January as workers
Inflation remains a threat, however. hired for the holidays are released. In the baseline scenario, the forecast
Consumers are prioritizing food over Employment rebuilds in the spring as calls for a gain of 3,800 jobs; in the
purchases of discretionary items. the overall economy expands. By late best-case, a gain of 4,900; in the
Some are drawing down savings to summer, January’s losses have been worst case, 2,500.
maintain their lifestyles. Others are recouped. Another hiring surge starts
TRANSPORTATION, WAREHOUSING, AND UTILITIES
The sector includes airlines, trucking containers this year. Overall tonnage continues to grow. And developers
companies, barge operators, bus through the region’s ports (Houston, continue to build warehouses and
lines, taxis, limousines, pipelines, Galveston, Texas City, Freeport) distribution centers.
couriers, freight services (crating,
forwarding), and warehousing. The
sector is a key link in the supply PORT OF HOUSTON CONTAINER TRAFFIC, SEP YTD
Millions, Loaded TEUs*
chain; it was the first in Houston to 1.832
1.765
recover all its pandemic losses. 1.672 1.620
1.486
1.334
Activity in the transportation
sector doesn’t suggest a downturn
is imminent. Passenger traffic is
approaching pre-pandemic levels
at Bush Intercontinental and Hobby
airports. The same holds true for
air cargo. The Port of Houston
will handle a record number of ’17 ’18 ’19 ’20 ’21 ’22
Source: Port Houston * * twenty-foot equivalent units
Greater Houston Partnership Research December 2022 | 9The sector faces a severe labor sector remains unfilled and all the expect business travel at their firms to
crisis. Airlines are grappling with a new warehouses need forklift drivers, increase in ’23.
dearth of pilots, flight attendants, shipping clerks, and managers.
baggage handlers, and mechanics. Given the labor shortages, the sector
The shortage forced thousands of Leisure travel may be impacted next is unlikely to shed workers in ’23,
flight cancellations this summer. The year as inflation eats into family even in the direst of situations. In
American Trucking Association (ATA) budgets. Business travel will pick the baseline scenario, the forecast
estimates the industry needs at least up, however. A recent (October ’23) calls for a gain of 3,700 jobs; in the
another 80,000 drivers. According travel manager survey by the Global best-case, a gain of 4,900; in the
to BLS, one in every 22 jobs in the Business Travel Association found worst case, 2,500.
that 78 percent of respondents
INFORMATION
The information sector includes The sector employs 17,200 fewer Job growth, when it does occur, is
newspaper, magazine, and book workers today than it did then. meager, and only happens when
publishers; software publishers; There are numerous reasons. the rest of Houston’s economy is
motion picture and video production; Social media has reduced the booming. The sector may add a few
movie theatres, sound recording; role of print and broadcast media. hundred jobs if consumers return
radio and television broadcasting; Technology continues to replace to the cinema, otherwise losses
telecommunications; data processing; labor in telecommunications. are more likely.
news services, web hosting, and Houston hasn’t emerged as a center
related services. for motion picture production. And In the baseline scenario, the forecast
many consumers prefer streaming calls for a gain of 300 jobs; in the
Employment peaked in December at home to watching a movie in a best-case, a gain of 600; in the worst
’00 and has trended down since. packed theatre. case, a loss of 800.
FINANCE AND INSURANCE
The sector includes commercial There’s a flip side. As borrowing
METRO HOUSTON
banks, credit unions, insurance costs rise, businesses and consumers BANK DEPOSITS*
brokers, insurance carriers, take out fewer loans. An October
investment advisors, mortgage survey by the Dallas Fed found Year $ Millions
bankers, and security brokerages. loan demand falling across all
‘22 374,809
categories, especially residential
The hike in interest rates should real estate. That’s likely to continue. ‘21 333,722
boost the sector’s profitability. As The drop in mortgage applications ‘20 305,954
rates rise, the spread between what has already led to layoffs at several
banks pay depositors and what ‘19 249,551
financial institutions.
they charge borrowers widens. And ‘18 245,688
they have plenty to lend. Deposits Job growth has been tepid for years ’17 240,933
at Houston’s FDIC-insured banks as banks open fewer branches,
topped $374.8 billion in June ’22, up channeling the resources into online ’16 219,160
from $179.1 billion ten years ago. banking instead. Competition from ’15 215,215
nontraditional lending sources (e.g., ’14 242,540
online banks, crowdsourcing) has also
siphoned away customers. ’13 208,033
* as of June 30 each year
Source: Federal Deposit Insurance Corporation
10 | Greater Houston Partnership Research December 2022Inflation continues to undermine the and employment growth has helped In the baseline scenario, the forecast
insurance sector’s profitability. A mitigate that. The sector has added calls for a gain of 1,000 jobs; in the
steady increase in auto, home, life, jobs nine of the past 10 years. best-case, a gain of 1,600; in the
and health policies led by population worst case, a gain of 800.
REAL ESTATE AND EQUIPMENT RENTALS
The sector primarily focuses on • Developers have added 54.4 MSF heavy machinery, trucks, and
what transpires after construction— of industrial space, 6.7 MSF of recreational equipment. Any increase
the lease, sale, and management office space, and 7.1 MSF of retail in business travel will boost car
of properties. Activity has space to the market over the past rentals. The near-record volume of
rebounded significantly from the two years. contracts awarded in ’22 will drive the
pandemic doldrums. demand for construction equipment.
• Over 26.8 MSF of industrial space,
On-going supply chain issues support
• Brokers leased 53.4 million square 3.2 MSF of office space, and 4.6
more truck leasing.
feet (MSF) of office, industrial, and MSF of retail space was under
retail space over the first three construction in Q3/22, much of it to Inflation tends to hit low-income
quarters of ’22, according to Partners be delivered in ’23. households the hardest, the typical
Real Estate. That’s up from 40.2 market for furniture, appliance,
million in ’20. The adage “build it and they will
and electronics rentals. The
come” will be tested next year.
• Real Capital Analytics reports subsector will likely see a drop in
Tenants worried about the recession
office, industrial and retail sales business next year.
may be reluctant to sign new
volumes topped $1.2 billion lease agreements.
Q3/22. That’s up from $464 million In the baseline scenario, the forecast
in Q3/20. calls for a gain of 1,300 jobs; in the
Equipment rental involves the leasing
best-case, a gain of 1,700; in the
of appliances, furniture, vehicles,
worst case, a gain of 900.
PROFESSIONAL, SCIENTIFIC, AND TECH SERVICES
The sector includes law, accounting, Energy, construction, and find itself in the middle of those two
bookkeeping, engineering, manufacturing are typically the extremes next year. Work to reduce
geophysical surveying, testing sector’s biggest clients. That hasn’t carbon footprints, develop transition
labs, computer systems design, changed, but the nature of the strategies, and prevent cyber-attacks
advertising, marketing, public engagements has. Professional will continue even in a prolonged
relations, and management service firms are creating social downturn, but marketing, public
consulting services. It has one of the media campaigns, guarding against relations, and social media campaigns
highest concentrations of college- cyber-attacks, building strategies will be scaled back.
educated, white-collar workers in to reduce carbon footprints, and
Houston. Until recently, most of them developing plans to facilitate the In the baseline scenario, the forecast
were “office” workers, but that’s less energy transition for their clients. calls for a net gain of 5,900 jobs; in
common now that white-collar work the best-case, a gain of 7,900; in the
can easily be done from home. In boom times, billable hours soar. worst case, a gain of 2,500.
In lean times, clients slash their
consulting budgets. The sector will
Greater Houston Partnership Research December 2022 | 11ADMINISTRATIVE SUPPORT, WASTE MANAGEMENT
This sector includes firms that provide in demand. Once the firm realizes that Houston has considerable
clerical, human resource, cleaning, it has enough business to sustain momentum going into ’23. However,
security, bill collection, trash hauling, a larger workforce, contract and if the downturn proves worse than
and employment services (i.e., temporary employees are offered full- anticipated, layoffs will occur.
temporary and contract workers). time or permanent status. Conversely,
when a recession sets in, contract In the baseline scenario, the forecast
The sector serves as a bellwether for workers are the first to be laid off. calls for a gain of 4,700 jobs; in the
the broader economy. Businesses best-case, a gain of 6,300; in the
often rely on contract workers during Employment in the sector trended up worst case, a loss of 3,500.
a recovery to handle the initial uptick most of ’22, reinforcing the premise
ARTS, ENTERTAINMENT, AND RECREATION
“Arts and Rec” includes a little bit theatre or fitness center. Second, recession, corporate profits will drop,
of everything: amusement parks, consumers have shifted from and donors may be less generous.
arcades, botanical gardens, bowling “buying” things to “doing” things.
alleys, fitness centers, golf courses, That’s lifted ticket sales and boosted Timing will be critical in ’23.
marinas, museums, music groups, gym memberships. Employment in recreational activities
parks, performing arts companies, spikes in the summer and trails off in
racetracks, spectator sports, theater The sector now faces a new set of the fall. Employment in the arts climbs
companies, and zoos. The sector challenges. Inflation has reduced in the fall and trails off in the spring. If
suffered more than most in the early consumer purchasing power. Concert the recession ends by mid-year, the
stages of the pandemic, laying off tickets and gym memberships are downturn’s impact will be negligible.
nearly half its workforce. It has since discretionary purchases. If funds are If the downturn drags into summer,
fully recovered and in the summer limited and consumers must choose recreation will suffer. If it lingers into
briefly set a record for employment. between bread or Bach, most will the fall, the arts will as well.
choose bread. Sports teams and
Two shifts in consumer behavior arts organizations also depend on In the baseline scenario, the forecast
have facilitated the recovery. One, sponsorships to supplement box calls for a gain of 600 jobs; in the
consumers are less worried now office revenues. If the nation slips into best-case, 1,200 jobs; in the worst
about catching COVID while at the case, a loss of 400.
EDUCATIONAL SERVICES
Educational services includes private trade schools. (Public education is workers needing to build skill sets,
colleges, universities, elementary included in Government.) students (and parents) wanting better
and secondary schools, sports test scores, athletes trying to improve
instruction, exam preparation, fine Employment growth remains their performance on the field, and
arts academies, and technical and strong, driven by parents seeking teenagers learning how to drive.
alternatives to public schools,
12 | Greater Houston Partnership Research December 2022Even in a weak economy, the In the baseline scenario, the forecast
sector is more apt to grow than not. calls for a gain of 2,300 jobs; in
Educational services has added jobs the best-case, 2,900 jobs; in the
in 26 of the last 30 years. worst case, 1,200.
FOOD SERVICES AND DRINKING PLACES
Consumers no longer fear dining out. though not necessarily an increase The region would welcome a few
It’s the check that now frightens them. in employment. During the Great more dining options.
Since restaurants reopened in May Recession of ’09, the region logged
’20, the cost of the typical restaurant a net gain of 300 cafes, restaurants, Location has always been the key
meal has climbed nearly 17 percent. and bars, but no new jobs. to a restaurant’s success. Next year,
As a result, more Houstonians opt timing will matter as well. The first half
for casual over fine dining, select According to an ’18 Zagat survey, of the year will be a difficult time to
less-expensive items from the menu, Houstonians dine out more often open and operate a restaurant, the
don’t purchase alcohol, and use than any other major city in America, second half less so because by then
coupons when possible. 7.0 times per week versus the major the recovery should be underway.
city average of 5.9. Houston has over
Owners have a different fear. Will 80 categories of cuisine, including In the baseline scenario, the forecast
their staff show up? Restaurants have Cajun, French, Italian, Latin American, calls for a gain of 4,800 jobs; in
the highest quit rate in the U.S., 6.5 Polish, and Vegan restaurants, the best-case, 6,400 jobs; in the
percent in September, more than according to Yelp.com. worst case, 1,500.
double the rate for the economy
in general. Many workers who left NUMBER OF HOUSTON-AREA RESTAURANTS
the industry during the pandemic
10,838 10,993 11,304
found better pay, better hours, better 10,046 10,463
9,667
working conditions, or all three and 8,768 8,990 9,343
8,472
have not returned. The sector has
the highest rate of job openings
in the nation. Restaurateurs have
responded to the labor shortage by
cutting menu options, reducing hours,
and adapting operations to require
fewer workers.
Even in a downturn, Houston will
’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22
see a net increase in restaurants,
Sources: Texas Workforce Commission
HEALTH CARE AND SOCIAL ASSISTANCE
The only sure bet in Houston is The sector faces a series of ongoing understaffed, a situation aggravated
health care. The sector has logged challenges. Health care providers by burnouts caused by the pandemic.
employment gains in 29 of the past are under constant pressure And one in five Houstonians lacks
30 years. The one loss occurred from consumers, insurers, and health insurance. The cost of their
during the pandemic and then the government to reduce costs. treatment is absorbed by the
amounted to less than 3,000 jobs. The industry remains chronically
Greater Houston Partnership Research December 2022 | 13hospitals or passed on to other ANNUAL JOB GAINS/LOSSES, HOUSTON HEALTH CARE
patients through higher medical bills.
14
In ’22, health care enjoyed a bounce 12
as patients rescheduled visits and
10
procedures postponed during the
pandemic. That has subsided. The 8
industry must now rely on traditional
6
drivers—job creation, births,
Jobs (000s)
inmigration, and an aging population. 4
• The region will create between 2
30,000 and 80,000 jobs in ’23. 0
Roughly 75 percent of these jobs
will come with health insurance -2
coverage. -4
• Houston will record roughly -6
100,000 births next year. Every ’92 ’94 ’96 ’98 ’00 ’02 ’04 ’06 ’08 ’10 ’12 ’14 ’16 ’18 ’20 ’22*
new baby starts a cycle of Source: U.S. Bureau of Labor Statistics *September YTD
checkups, vaccinations, and
treatments for typical childhood
• Houston’s over-65 population The outlook for health care is strong
illnesses.
will expand by roughly 30,000 regardless of the recession’s depth
• On net, 40,000 to 60,000 people residents next year. As seniors deal and duration. In the baseline scenario,
will relocate to Houston in ’23, with the maladies of aging, they the forecast calls for the sector to add
each needing to find a doctor, visit the doctor, clinic, and hospital 7,400 jobs next year; in the best-case,
dentist, and ophthalmologist after more often. 9,100; in the worst-case, 6,100.
they arrive.
THE INN
HOTELS
Try booking a suite in one of Domestic leisure travel has returned, to a Global Business Travel
Houston’s upper-end hotels and but business travel won’t recover Association survey indicated their
you’ll have your pick of rooms. Try until ’24, according to the U.S. firms will book more trips in ’23.
booking a ballroom and you’ll have to Travel Association. Convention attendance will approach
wait in line. Business travel has been 90 to 100 percent of pre-pandemic
slow to recover from the pandemic, Room occupancy has averaged levels. And energy-related bookings
but the weddings, proms, galas, 58.0 percent in ’22, still below have begun to pick up.
conferences, and meetings have the 62.8 percent recorded in ’19.
surged. Some organizations have McCaslin Hotel Consulting expects In the baseline scenario, the
contracted with hotels three years in occupancy to average 60.5 percent sector adds 1,000 jobs next year;
advance to ensure they have a venue in ’23, not returning to pre-COVID in its best-case, 1,300 jobs; in its
for their galas. levels until ’24. worst-case, 700.
Employment has been slow to Inflation will cut into leisure travel.
recover, however. As of September, Any loss in leisure will be partially
the sector had recouped only 80.9 offset by increased business travel.
percent of its pandemic losses. Seventy-eight percent of respondents
14 | Greater Houston Partnership Research December 2022OTHER SERVICES
The sector includes repair shops equipment repair shops has grown Homeowners will teach themselves
(automotive, electronic equipment, enough over the past two years to how to repair broken appliances.
household appliances), personal more than offset those losses. Memberships in civic and social
care (barbers, beauty shops, nail organizations will be a luxury and
salons, weight loss centers), funeral The sector is dominated by firms with allowed to expire. Women will do
parlors and cemeteries, dry cleaners 10 or fewer employees. When TWC their own nails. Men will launder
and laundries, and membership queries employers each month, it their own shirts.
organizations. It has yet to recoup may lack enough small businesses
all jobs lost in the pandemic. As of in its sample to provide an accurate Small businesses always struggle
September ’22, it remained 6,300 reading of trends in the sector. in a recession. Persistent inflation
below its February ’20 level. The Given that nearly every other sector will magnify the impact. Congress
reason for the gap is unclear. has recovered, it’s likely that Other is unlikely to offer another round of
Services has as well. The gap may Payroll Protection Program loans
TWC reports that fewer Houstonians simply be due to survey error. to help them out. In the baseline
work at barber shops, beauty salons, scenario, the sector loses 1,500 jobs,
dry cleaners, and civic organizations Inflation poses the biggest threat in its best-case the loss is limited
than prior to the pandemic. But to the sector in ’23. Consumers will to 1,000, and in the worst-case
employment at churches, funeral look for ways to cut costs. Routine losses exceed 2,500.
parlors, and automobile and vehicle maintenance will be delayed.
GOVERNMENT
Just under two-thirds (62.1 percent) in ’21. CyFair’s has jumped from The region has nine counties and
of all government employees in the $53.4 billion to $65.7 billion, Fort 123 cities and municipalities. Over
region work for a school district, Bend ISD’s from $36.9 billion to $47.0 the past five years, the metro area
community college, or public billion. And when the Texas State has added over 400,000 residents.
university. Less than a third of Legislature convenes for its 88th This translates into a need for
government workers (30.4 percent) session in January, lawmakers will additional police and firefighters,
work for a city, county, or the state. have a $27.0 billion surplus to work sanitation and maintenance workers,
The remainder (7.5 percent) are with. Funds should be available to librarians and nurses.
federal employees. hire more educators.
Sales tax collections are well above
The region’s school-age population Houston has nine publicly funded pre-pandemic levels even after
continues to grow. Metro Houston community colleges, six publicly adjusting for inflation. However, a tax
has added 82,000 residents ages five funded four-year colleges, and six cap passed by voters in ’04 limits the
to 19 over the past four years. Clearly, publicly funded medical schools. amount of property tax revenue the
there’s a need for more teachers, The region’s four-year colleges have City of Houston can collect and thus
aids, and instructors. seen enrollments jump 2.0 to 4.0 the city’s ability to expand services.
percent over the past few years. Other jurisdictions are under no
School district property values, Growth would have been more such constraints.
the primary source of funding in substantial if not for the pandemic.
Texas, have soared in recent years. Community college enrollment,
The Houston Independent School however, fell nearly 10 percent and
District’s tax base has jumped from has yet to recover.
$174.2 billion in ’17 to $230.5 billion
Greater Houston Partnership Research December 2022 | 15Federal employment in Houston is SALES TAX COLLECTIONS, METRO HOUSTON*
spread across dozens of agencies, 12-Month % Change
e.g., the Drug Enforcement 25
Administration, Federal Aviation
Administration, Federal Bureau 20
of Investigation, Internal Revenue
Service, National Aeronautics and 15
Space Administration, Social Security
Administration, U.S. Customs and
10
% Change
Border Protection, etc. The federal
payroll in Houston typically expands
5
by 500 to 600 workers a year. That
pattern is likely to hold in ’23.
0
Typically, recessions don’t impact
property tax rolls until well after the -5
initial downturn. If the downturn is
short, they’re not impacted at all. -10
Local sales tax revenues continue ’17 ’18 ’19 ’20 ’21 ’22 ’23
to trend up. And as noted, Texas
Source: Texas Comptroller of Public Accounts *12 most populous cities
will enter the next biennium with a
substantial budget surplus. Any slip in
tax revenues is a year or so away.
In the baseline scenario, the forecast
calls for the public sector to add
6,400 jobs, in its best-case, 7,500.
There is no worst-case scenario
for this sector.
PAST PERFORMANCE, FUTURE RESULTS
In the depth of the ‘80s oil bust, one expects the next recession to be tone over the next 12 months. By
in seven Houstonians lost their jobs. short and shallow, with minimal the time ’24 arrives, job growth will
At the time, it seemed there was impact on the local economy. again be robust, and Houston will
no end in sight. But the economy Momentum from ’22 and the region’s be seven-for-seven in recessions
eventually stabilized and growth remarkable resilience will set the and recoveries.
resumed. Since then, Houston’s
population and employment have
METRO HOUSTON EMPLOYMENT
more than doubled.
Investment advisors caution that 3.5
“Past performance is not indicative
of future results.” That doesn’t apply 3.0
to Houston. Over the past 40 years,
Energy
the region has suffered through Bust I
six recessions, starting with the 2.5
Millions
Energy
oil bust. Houston has enjoyed six Bust II Fracking
recoveries, the most recent being 2.0
Bust
the current post-pandemic surge that Global COVID
started mid-’20. 911/Enron
Financial
Crisis
1.5
No matter how dire the situation may
seem at the time, Houston always
1.0
bounces back. That will be the ’80 ’82 ’84 ’86 ’88 ’90 ’92 ’94 ’96 ’98 ’00 ’02 ’04 ’06 ’08 ’10 ’12 ’14 ’16 ’18 ’20 ’22
case again in ’23. The Partnership
Source: Texas Workforce Commission
16 | Greater Houston Partnership Research December 2022METRO HOUSTON 2023 EMPLOYMENT GROWTH
Baseline Best Case Worst Case
Industry/Sector 50% Probability 30% Probability 20% Probability
Health Care and Social Assistance 7,400 9,100 6,100
Government 6,400 7,500 6,400
Construction 6,300 7,500 3,800
Professional, Scientific and Tech Services 5,925 7,900 2,500
Food Services and Drinking Places 4,800 6,400 3,200
Administrative Support, Waste Management 4,725 6,300 -3,500
Manufacturing 4,575 6,100 1,525
Energy (Exploration, Oil Field Services) 4,500 5,500 2,000
Retail Trade 3,800 4,750 2,850
Wholesale Trade 3,750 5,000 2,500
Transportation, Warehousing 3,675 4,900 2,450
Educational Services 2,300 2,875 1,150
Real Estate and Equipment Rentals 1,275 1,700 850
Finance and Insurance 1,000 1,600 800
Hotels 975 1,300 650
Arts, Entertainment, and Recreation 600 1,200 400
Information 300 600 -800
Other Services -1,500 -1,000 -2,500
Total Nonfarm Payroll Jobs 60,800 79,225 30,375
Source: Greater Houston Partnership Research
SOURCES
Data used in the analysis and forecast came from the following sources: American Chemistry Council, American Trucking Association,
Apartment Data Services, Associated Builders & Contractors, Associated General Contractors of America, Baker Hughes, Biznow Commercial
Real Estate News, Bloomberg, CenterPoint Energy, Chemical Week, City of Houston Aviation Department, Colliers International, CoStar,
The Conference Board, Dodge Data & Analytics, Engineering News Record, Federal Deposit Insurance Corporation, Federal Reserve Bank
of Dallas, Federal Reserve Bank of St. Louis, Forbes, Freddie Mac, Houston Association of Realtors, Houston Business Journal, Houston
Chronicle, Houston First, Houston: The Economy at a Glance, Houston Facts, Institute for Supply Management, International Energy Agency,
International Air Transport Association, JLL, John Burns Real Estate Consulting, McCaslin Hotel Consulting, Moody’s, Morning Consult,
Partners (formerly NAI), Mortgage Bankers Association, National Association for Business Economics, National Association of Manufacturers,
National Federation of Independent Businesses, National Restaurant Association, Organisation for Economic Co-operation and Development,
Oil & Gas Journal, Organization of Petroleum Exporting Countries, Port Houston, Rigzone, TexAuto Facts, Texas Comptroller of Public
Accounts, Texas Medical Center, Texas Workforce Commission, The Perryman Group, The Wall Street Journal, Transwestern, U.S. Bureau of
Labor Statistics, U.S. Bureau of Economic Analysis, U.S. Census Bureau, U.S. Energy Information Administration, WISERTrade, World Trade
Organization, Yelp, Zagat, and various company websites.
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