Houston Economic OverviewPresented to the Chiefs of Staff

H t Cit C ilHouston City Council By Patrick Jankowski, Vice President Research

Greater Houston Partnership

Three Takeaways . . . .Three Takeaways . . . .

• Houston’s economy• Houston s economy

–Has recovered all jobs lost in recession

– First major metro to do so

–Will repeat strong performance this year

Track of the Recession

Total Nonfarm Payroll Employment, Houston Metro Area, '02 ‐ '12

Track of the Recession

2.6

2.7

)

2.4

2.5

ent  (M

illions

2 2

2.3

Employme

2.1

2.2

Jan '02 Jan '03 Jan '04 Jan '05 Jan '06 Jan '07 Jan '08 Jan '09 Jan '10 Jan '11 Jan '12

Source: Texas Workforce Commission

The Recession in NumbersThe Recession in Numbers

Metro Houston Employment

Seasonally Adjusted UnadjustedSeasonally Adjusted Unadjusted

Recession Began Jan ’09 Sept ’08

Jobs Lost 121,200 152,800

% Jobs Lost 4.6% 5.8%

Source: Texas Workforce Commission

The Recovery in Numbers

Metro Houston Employment

The Recovery in Numbers

Metro Houston Employment

Seasonally Adjusted Unadjusted

Recession Began Jan ’09 Sept ’08

Jobs Lost 121,200 152,800

% Jobs Lost 4.6% 5.8%

Recovery Began Jan ’10 Dec ’09

Jobs Recovered 131,400 170,700

% Recovered 108.4% 111.7%

S T W kf C i iSource: Texas Workforce Commission

Percent  jobs recovered through Nov ’11Houston vs. Top 10 Metros

108 4%H t

Houston vs. Top 10 Metros

75.7%

82.1%

108.4%

Boston

New York

Houston

68.9%

73.2%

Dallas

DC

16.4%

16.5%

Miami

Chicago

3 6%

11.8%

13.1%

Atlanta

Los Angeles

Philadelphia Source: U.S. Bureau of Labor Statistics

Note: Reflects seasonally adjusted employment

3.6%Atlanta

Percent  jobs recovered through Nov ’11Houston vs. Metros 11 through 20

108 4%H

Houston vs. Metros 11 through 20

38.3%

41.1%

108.4%

Seattle

Baltimore

Houston

21.0%

22.0%

36.6%

Tampa

Minneapolis

San Diego

14.8%

16.4%

16.8%

Riverside

St. Louis

Phoenix

4.7%

13.1%

14.8%

Detroit

San FranciscoSource: U.S. Bureau of Labor Statistics

Note: Reflects seasonally adjusted employment

Houston recovery by sector through Nov ’11y y g

50%

+100%

+100%

+100%

+100%

Education Services

Hotels & Food Srvcs

Health Care

Personal Services 

+100%

+100%

+100%

+100%

Retail Trade 

Oil & Gas Exploration

Administrative Support

Education Services

31.6%

50.5%

66.3%

71.5%

Finance 

Manufacturing

Wholesale Trade 

Professional Services 

13 0%

19.9%

20.9%

30.1%

Arts Entertainment

Construction 

Real Estate

TWU*

Note: Reflects unadjusted employment

* Transportation, Warehousing, Utilities

Source: Texas Workforce Commission

0.0%

13.0%

Information

Arts, Entertainment

Houston recovery by sector through Nov ’11

50%

y y g

Education Services

Hotels & Food Srvcs

Health Care

Personal Services 

Retail Trade 

Oil & Gas Exploration

Administrative Support

Education Services

Finance 

Manufacturing

Wholesale Trade 

Professional Services  4,100

3,400

14,500

7,800

Arts Entertainment

Construction 

Real Estate

TWU*

32,300

7,200

5,300

4 100

Information

Arts, Entertainment 4,100

6,300

Drivers of Job GrowthDrivers of Job Growth

• Oil prices – Averaged $94.86 in ’11, $98.00 in ’12

• Advances in exploration technologyHydraulic fracturing– Hydraulic fracturing

• Foreign trade– Exports up 25.9% over ’10

• Weak U.S. dollar– Down 11.2 percent since Jan ’07

P l ti th• Population growth– 120,000+ per yearSources: U.S. Energy Information Administration, WISER Trade, Federal Reserve Bank of St. Louis, Texas State Data Center

Drivers of Job GrowthDrivers of Job Growth

• Oil prices – Averaged $94.86 in ’11, $98.00 in ’12

• Advances in exploration technologyHydraulic fracturing– Hydraulic fracturing

• Foreign trade– Exports up 25.9% over ’10

• Weak U.S. dollar– Down 11.2 percent since Jan ’07

P l ti th• Population growth– 120,000+ per yearSources: U.S. Energy Information Administration, WISER Trade, Federal Reserve Bank of St. Louis, Texas State Data Center

Drivers of Job GrowthDrivers of Job Growth

• Oil prices – Averaged $94.86 in ’11, $98.00 in ’12

• Advances in exploration technologyHydraulic fracturing– Hydraulic fracturing

• Foreign trade– Exports up 25.9% over ’10

• Weak U.S. dollar– Down 11.2 percent since Jan ’07

P l ti th• Population growth– 120,000+ per yearSources: U.S. Energy Information Administration, WISER Trade, Federal Reserve Bank of St. Louis, Texas State Data Center

Drivers of Job GrowthDrivers of Job Growth

• Oil prices – Averaged $94.86 in ’11, $98.00 in ’12

• Advances in exploration technologyHydraulic fracturing– Hydraulic fracturing

• Foreign trade– Exports up 25.9% over ’10

• Weak U.S. dollar– Down 11.2 percent since Jan ’07

P l ti th• Population growth– 120,000+ per yearSources: U.S. Energy Information Administration, WISER Trade, Federal Reserve Bank of St. Louis, Texas State Data Center

Drivers of Job GrowthDrivers of Job Growth

• Oil prices – Averaged $94.86 in ’11, $98.00 in ’12

• Advances in exploration technologyHydraulic fracturing– Hydraulic fracturing

• Foreign trade– Exports up 25.9% over ’10

• Weak U.S. dollar– Down 11.2 percent since Jan ’07

P l ti th• Population growth– 120,000+ per yearSources: U.S. Energy Information Administration, WISER Trade, Federal Reserve Bank of St. Louis, Texas State Data Center

Drivers of Job GrowthDrivers of Job Growth

• Oil prices – Averaged $94.86 in ’11, $98.00 in ’12

• Advances in exploration technologyHydraulic fracturing– Hydraulic fracturing

• Foreign trade– Exports up 25.9% over ’10

• Weak U.S. dollar– Down 11.2 percent since Jan ’07

P l ti th• Population growth– 120,000+ per yearSources: U.S. Energy Information Administration, WISER Trade, Federal Reserve Bank of St. Louis, Texas State Data Center

Houston’s # 1 RankingsHouston s # 1 Rankings

Fastest Growing Wages in U.S., Business Insider – January 12 2012Fastest Growing Wages in U.S., Business Insider  January 12, 2012

Best Cities for Manufacturing, Forbes – December 15, 2011

Most Affordable City to Do BusinessMost Affordable City to Do Business, PwC and The Partnership for New  York – May 3, 2011

Personal Safety in U.S., Mercer (as reported by Houston Business Journal) – December 1, 2011

i C iNew Housing Construction, Houston Business Journal – August 26, 2011

Fastest Growing Metro Area, Rice University’s Kinder Institute for Urban Research – July 12, 2011

Top Cities for IT Jobs, Modis   – May 13, 2011

America’s Best Burger City, Travel + Leisure – May 13, 2011

Houston’s # 1 RankingsHouston s # 1 Rankings

Fastest Growing Wages in U.S., Business Insider – January 12 2012Fastest Growing Wages in U.S., Business Insider  January 12, 2012

Best Cities for Manufacturing, Forbes – December 15, 2011

Most Affordable City to Do BusinessMost Affordable City to Do Business, PwC and The Partnership for New  York – May 3, 2011

Personal Safety in U.S., Mercer (as reported by Houston Business Journal) – December 1, 2011

i C iNew Housing Construction, Houston Business Journal – August 26, 2011

Fastest Growing Metro Area, Rice University’s Kinder Institute for Urban Research – July 12, 2011

Top Cities for IT Jobs, Modis – May 13, 2011

America’s Best Burger City, Travel + Leisure – May 13, 2011

Outlook for ’12Outlook for  12

• Job growthE l i d P d i

• Job lossesI f i– Exploration and Production

– Oil Field Services– Manufacturing

Wholesale Trade

– Information– Government

– Wholesale Trade– Retail Trade– Utilities– Real EstateReal Estate– Finance– Professional Services– Administrative Services– Health Care– Educational Services– Arts, Entertainment, Recreation– Accommodations and Dining Services– Personal Services

Forecast for ‘12

• Net new jobs

Forecast for  12

Net new jobs• 84,600

• Annual growth rate• Annual growth rate• 3.1 percent

• Historic Perspective• 7th best in past 30 years

Houston job recoveryh h N ’11through Nov ’11

50%

Education Services

Hotels & Food Srvcs

Health Care

Personal Services 

Retail Trade 

Oil & Gas Exploration

Administrative Support

Education Services

Finance 

Manufacturing

Wholesale Trade 

Professional Services  4,100

3,400

14,500

7,800

Arts Entertainment

Construction 

Real Estate

TWU*

32,300

7,200

5,300

4 100

Information

Arts, Entertainment 4,100

6,300

Houston job recovery by Dec ’12Houston job recovery by Dec  12 

* Transportation, Warehousing, Utilities

To recap . . . .To recap . . . .

• Houston’s economy• Houston s economy

–Has recovered all jobs lost in recession

– First major metro to do so

–Will repeat strong performance this year

Houston Economic OverviewPresented to the Chiefs of Staff

H t Cit C ilHouston City Council By Patrick Jankowski, Vice President Research

Greater Houston Partnership