Houston Economic Update: March 2011

8/7/2019 Houston Economic Update: March 2011

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March 2011 2011, Greater Houston Partnership Page 1

A publication of the Greater Houston Partnership Volume 20, Number 3March 2011

2010 Census Results The City of Houstons population likely crossed the 2.1million mark late last spring, the metro area topped 6.0 million in mid-summer, andHouston overtook Philadelphia as the nations fifth most populous metro areatoward the end of last year. Thats according to estimates prepared by the GHPResearch Department based on historical data and the most recent estimates fromthe U.S. Bureau of the Census.

According to official 10 census population counts recently released by the bureau: The State of Texas grew 20.6 percent over the past 10 years, adding 4.3

million residents. The states population stood at 25.1 million on April 1,10, the official date of the census, compared to 20.9 million a decadeearlier.

The Houston-Sugar Land-Baytown Metropolitan Statistical Area grew 26.1percent over the 10 years, adding 1.23 million residents. The HoustonMSAs population stood at 5.95 million on April 1, 10, compared to 4.72million in 00.

Harris, with 4.1 million residents, remains the most populous county in themetro area. Over the decade it gained nearly 700,000 residents, up 20.3percent from 00. Fort Bend remains the second most populous with 585,000residents, up 65.1 percent. Montgomery, up 55.1 percent, is still the thirdmost populous at 456,000 residents.

With 2.1 million residents, the City of Houston remains the states largestcity.

All 10 counties in the Houston metro area gained population since the last census

but not all the cities did. The populations and growth rates for the counties whichcomprise the Houston MSA and the MSAs 20 most populous cities can be seen inthe tables below.


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HOUSTONTHE ECONOMY AT A GLANCE


The 145,820 residents the City of Houston has added since the 2000 Censussuggests an annual growth rate of 14,582 residents, or 1,215 per month. If the ratehas held constant, in the 11 months since the 10 Census, the city has added 13,365residents, putting the citys population as of March 1, this year past 2.11 million.

Mayor Annise Parker plans to challenge the bureaus count of the cityspopulation, contending that small annexed areas in various parts of the region werenot included in the survey. The undercount will impact Houstons share of morethan $400 billion in federal funds distributed to state and local governments everyyear. The citys charter also mandates that Houston realign council districts andincrease the number from nine to 11 once the citys population exceeds 2.1 million.The bureaus annual estimates of the citys population placed it at 2,169,248 as farback as July 1, 2006. The estimate immediately prior to the 10 Census placed thecitys population at 2,257,926 on July 1, 09. The difference between the mostrecent estimate and the 10 Census official count exceeds 250,000 residents, whichleads one to question how the official count and the previous estimates could differ

by so much.

The 1,231,394 residents the Houston metro area added since the 2000 Censusrepresents average annual growth of 123,139, or 10,262 per month. If that rate hasheld constant since the 10 Census, the metro areas population passed the 6.0million benchmark in October 10, and as of the beginning of this month should beat nearly 6.1 million.

Admittedly, extrapolating current population from historic growth patternsoversimplifies the estimating process. A more lengthy analysis might adjust annualgrowth rates based on factors that impacted Houstons population growth over thepast 10 years:

The 01-02 recession, in which 36,000 local jobs were lost;

The 05 influx of Katrina evacuees, which produced a one-time gain of75,000-85,000 new residents;

The 07 economic boom, when job growth exceeded 100,000 per year;

The08-09 recession, which cut between 110,000 and 150,000 jobs from thelocal economy;

Growth in the natural population increase (i.e., resident births minus residentdeaths), which averaged 55,500 per year in the early 00s and rose to 63,900per year in the late 00s; and

Growth in net migration (i.e., people moving into the region minus peoplemoving out), which averaged 47,700 in the early 00s and 63,600 in the late00s.


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Assume that over the decade the positive impacts of each trend or event offset thenegative impacts and that extrapolating is an acceptable method. If the natural rateof population increase remains constant (63,900 per year) and net migration rangesbetween 47,700 and 63,600, then the region continues to add 110,000 to 125,000residents per year and has added more than100,000 since the last census.

Census data for the Philadelphia metro have not yet been released, but the Bureauestimates that Philadelphias metro area population stood at 5,968,252 on July 1,09 and Houstons stood at 5,867,489, a difference of 100,763 inhabitants. Giventhat Philadelphias population grew by only 30,553 residents per year from July 1,2000 to July 1, 2009 (according to Bureau estimates), while Houstons populationgrew by 125,342 per year, Houston probably overtook Philadelphia last summer,becoming the nations fifth-largest metro area.

PMI Continues to Grow The Houston Purchasing Managers Index (PMI), ashort-term indicator for regional production, rose to 58.2 in January from 57.6 in

December. The January reading represents the 16th consecutive month the PMI hasstood above 50, according to the latest report from the Institute for SupplyManagement-Houston. The January reading is the second highest since theHouston recovery began in March 09.

The Houston PMI has a possible range from zero to 100. Readings above theneutral point of 50 indicate likely growth in production over the next three to fourmonths; readings below 50 suggest contraction. The Houston PMI fell to arecession low of 39.0 in March 09 and has trended upward since then, indicating22 months of recovery.

The Houston PMI is based on eight components. Significant gains were seen in thesales and production components, but only a minimal gain was seen inemployment, a signal that continued growth in output has yet to lead to appreciablenew hiring.

Customs District Trade Climbs The Houston-Galveston Customs Districtrecorded trade valued at $211.5 billion for 10, up 26.1 percent from $167.7 billionin 09. In terms or tonnage, trade through the regions ports rose 7.7 percent, from270.0 million short tons in 09 to 290.9 million short tons in 10.

Houston ranked as the busiest U.S. customs district in terms of weight and thefourth busiest in terms of value in 10. Among the nations four busiest customsdistricts, trade through Houston has grown the fastest. From 00 to 10, thecompound annual growth rate (CAGR) in foreign trade value was 11.0 percent forHouston, 4.8 percent for Los Angeles, 3.8 percent for New York City, and 7.1percent for Detroit. Houston more than doubled the national CAGR of 4.8 percent.


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Exports totaled $94.7 billion in 10, up 25.9 percent from 09. The top five exportswere:

mineral fuel and oil ($27.3 billion) industrial machinery ($16.8 billion) organic chemicals ($13.8 billion)

plastics ($6.8 billion) electric machinery ($4.5 billion)

Imports totaled $116.8 billion, up 26.3 percent from 09. The top five importswere:

mineral fuel and oil ($76.9 billion) industrial machinery ($8.0 billion) iron and steel ($5.2 billion) electric machinery ($4.3 billion) organic chemicals ($3.7 billion)

Houstons top five trading partners remained the same as 09 with Mexico as thedistricts largest trading partner at $22.1 billion in 10, a 36.9 percent increase.Mexico was followed by Venezuela ($15.9 billion), Nigeria ($12.5 billion), Brazil($11.3 billion) and China ($9.1 billion).

Airport System Passenger Travel Increases Passenger and freight trafficthrough the Houston Airport System (HAS) continues to grow, another sign of theregions on-going economic recovery. For the 12 months ending in January 11,HAS handled 49.7 million passengers, a 2.3 percent increase from the same periodlast year. On a month to month basis, HAS handled 3.89 million passengers in

January 11, a 3.5 percent increase from the 3.76 million passengers who traveledin January 10.

The growth in ridership is mainly due to international travel. Internationalpassengers increased by 7.6 percent in January 11 compared to January 10 whiledomestic passengers increased by 2.6 percent. Travel to the Middle Eastcontributed to the majority of this growth as ridership to the region increased by40.5 percent in January 11 compared to a year earlier. This is largely due to theEmirates addition of a second daily service from IAH.

Air freight volumes also continue to grow. HAS handled 68.5 million pounds of

air freight in January 11, up 6.9 percent from the 64.1 million pounds in January10. No particular region is responsible for the increase, suggesting a worldwiderebound in global trade as the U.S. and other nations pull out of the recession.

Retail Auto Sales Grow Auto dealers in the 10-county Houston metropolitanarea sold 22,468 new cars, trucks and SUVs in January 11, according to the latestTexAuto Facts Report, published by InfoNation, Inc. of Sugar Land. Thisrepresents a decrease of 5.1 percent from the 23,674 reported in January 10.


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The decrease in total sales was primarily due to a decrease in fleet sales. Fleet salesare primarily rental cars and third party leases and are generally transacted throughdealers outside the local region. In January 11, fleet sales totaled 3,732, a 33percent drop from the 5,654 sold in January 10.

Retail sales are primarily local dealer sales and are the core of new vehicle salesprofit. Retail sales rose 4.0 percent over the year. Given the severe weatherexperienced in January, the increase in auto sales may be a sign of an approachingrecovery in the auto industry.

More than 60,000 Black-Owned Firms in Houston Region The number ofblack-owned firms in the Houston metro area rose by more than 70 percent from02 to 07, according to data released in February by the U.S. Census Bureau. In02, black-owned businesses totaled 35,846 and represented 8.6 percent of all firmsin the region. In 07, there were 61,457 black-owned firms, accounting for 11.8percent of all firms in the region

The majority of black-owned firms are small. Census distinguishes between em-ployer and non-employer firms, employer firms having payrolls and paid em-ployees, while non-employer firms are self-employed individuals operating smallunincorporated businesses. Non-employer firms account for 95.7 percent of theregions black-owned firms and employer firms represent the rest.

Black-owned firms in Houston reported $3.614 billion in revenue in 07, 0.4percent of the regions total revenue. Black-owned firms in the health care andsocial assistance sector account for 21.5 percent of total black-owned businessrevenue. The health care and social assistance industry also accounted for 10,647

firms, or 17.3 percent of all black-owned firms in the region.

The Houston metro area ranked seventh among the 50 most populous metros fornumber of black-owned firms.

Patrick Jankowski, Marycruz Garca and Jenny Hsu contributed to this issue of

The Economy at a Glance.

___________________________________

The Greater Houston Partnership is the primary advocate of Houstons business community

and is dedicated to building regional economic prosperity.

Visit the Greater Houston Partnership on the World Wide Web at www.houston.org.Contact us by phone at 713-844-3600.


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Houston Economic Indicators

A Service of the Greater Houston Partnership

Most Year % Most Year %

Month Recent Earlier Change Recent Earlier Change

ENERGY

U.S. Active Rotary Rigs Jan '11 1,711 1,267 35.0 1,711 * 1,267 * 35.0

Spot Crude Oil Price ($/bbl, West Texas Intermediate) Jan '11 88.99 76.95 15.6 88.99 * 76.95 * 15.6

Spot Natural Gas ($/MMBtu, Henry Hub) Jan '11 4.46 5.78 -22.8 4.46 * 5.78 * -22.8

UTILITIES AND PRODUCTION

Houston Purchasing Managers Index Jan '11 58.2 53.2 9.4 58.2 * 53.2 * 9.4

Nonresidential Electr ic Current Sales (Mwh, CNP Service Area) Dec '10 3,969,364 3,854,225 3.0 50,442,311 49,878,428 1.1

CONSTRUCTION

Total Building Contracts ($ , Houston MSA) Dec '10 500,319,000 502,574,000 -0 .4 7 ,857,884,000 8,467,876,000 -7.2

Nonresidential Dec '10 159,740,000 172,952,000 -7.6 3,012,922,000 3,792,545,000 -20.6

Residential Dec '10 340,579,000 329,622,000 3.3 4,844,962,000 4,675,331,000 3.6

Building Permits ($, City of Houston) Jan '11 205,716,375 222,561,611 -7.6 205,716,375 222,561,611 -7.6

Nonresidential Jan '11 148,406,652 143,381,342 3.5 148,406,652 143,381,342 3.5

New Nonresidential Jan '11 58,815,107 48,741,289 20.7 58,815,107 48,741,289 20.7

Nonresidenti al Add iti ons/Al te ra ti ons/Conve rsions Jan '11 89,591,545 94,640,053 -5.3 89,591 ,545 94 ,640,053 -5 .3

Residential Jan '11 57,309,723 79,180,269 -27.6 57,309,723 79,180,269 -27.6

New Residential Jan '11 43,327,258 64,303,667 -32.6 43,327,258 64,303,667 -32.6

Residential Additions/Alterations/Conversions Jan '11 13,982,465 14,876,602 -6.0 13,982,465 14,876,602 -6.0

Multiple Listing Service (MLS) ActivityClosings Jan '11 3,413 3,118 9.5 3,413 3,118 9.5

Median Sales Price - SF Detached Jan '11 139,000 143,560 -3.2 139,000 * 143,560 * -3.2

Active Listings Jan '11 49,523 45,210 9.5 49,523 * 45,210 * 9.5

EMPLOYMENT (Houston-Sugar Land-Baytown MSA)

Nonfarm Payr oll Employment Dec '10 2,542,600 2 ,529,500 0.5 2 ,514,800 * 2 ,538 ,200 * -0 .9

Goods Producing (Natural Res ources /Mining/Cons t/Mfg) Dec '10 484,300 478,100 1.3 477,700 * 497,000 * -3.9

Service Providing Dec '10 2,058,300 2,051,400 0.3 2,037,100 * 2,041,200 * -0.2

Unemployment Rate (%) - Not Seasonally Adjusted

Houston-Sugar Land-Baytown MSA Dec '10 8.3 8.2 8.5 * 7.6 *

Texas Dec '10 8.0 8.0 8.2 * 7.6 *

U.S. Dec '10 9.1 9.7 9.6 * 9.3 *

Unemployment Insurance Claims (Gulf Coast WDA)

Initial Claims Dec '10 19,879 22,283 -10.8 21,998 * 25,631 * -14.2

Continuing Claims Dec '10 90,517 132,709 -31.8 101,755 * 132,050 * -22.9

TRANSPORTATION

Port of Houston Author ity Shipments (Short Tons) Dec '10 3 ,473,295 2,981,289 16.5 40 ,247,841 36,787 ,204 9.4Air Passengers (Houston Airport System) Jan '11 3,890,106 3,758,226 3.5 3,890,106 3,358,226 15.8

Domestic Passengers Jan '11 3,136,417 3,057,743 2.6 3,136,417 2,657,743 18.0

International Passengers Jan '11 753,689 700,483 7.6 753,689 700,483 7.6

Landings and Takeoffs Jan '11 70,015 71,851 -2.6 70,015 71,851 -2.6

Air Freight (000 lb) Jan '11 68,533 64,106 6.9 68,533 64,106 6.9

Enplaned Jan '11 35,470 34,277 3.5 35,470 34,277 3.5

Deplaned Jan '11 33,063 29,829 10.8 33,063 29,829 10.8

CONSUMERS

New Car and Truck Sales (Units, Houston MSA) Jan '11 22,468 23,674 -5.1 22,468 23,674 -5.1

Cars Jan '11 9,512 10,714 -11.2 9,512 10,714 -11.2

Trucks, SUVs and Commercials Jan '11 12,956 12,960 0.0 12,956 12,960 0.0

Total Retail Sales ($000,000, Houston MSA, NAICS Basis) 2Q10 24,625 21,043 17.0 45,080 39,834 13.2

Consumer Price Index for All Urban Consumers ('82-'84=100)

Houston-Galveston-Brazoria CMSA Jan '11 194.479 190.932 1.9 194.172 * 190.496 * 1.9

United States Jan '11 220.223 216.687 1.6 220.223 * 216.687 * 1.6

Hotel Performance (Harris County)Occupancy (%) 3Q10 54.4 52.4 56.3 * 57.6 *

Average Room Rate ($) 3Q10 88.63 90.64 -2.2 92.60 * 97.10 * -4.6

Revenue Per Available Room ($) 3Q10 48.24 47.47 1.6 52.10 * 56.10 * -7.1

POSTINGS AND FORECLOSURES

Postings (Harris County) Feb '11 4,418 4,333 2.0 8,616 7,745 11.2

Foreclosures (Harris County) Feb '11 747 887 -15.8 1,584 2,299 -31.1

YEAR-TO-DATE

TOTAL OR AVERAGE*MONTHLY DATA


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SourcesRig Count Baker Hughes IncorporatedSpot WTI, Spot Natural Gas U.S. Energy Information AgencyHouston Purchasing Managers National Association ofIndex Purchasing Management

Houston, Inc.Electricity CenterPoint EnergyBuilding Construction Contracts McGraw-Hill ConstructionCity of Houston Building Permits Building Permit Department, City

of HoustonMLS Data Houston Association of RealtorsEmployment, Unemployment Texas Workforce Commission

Port Shipments Port of Houston AuthorityAviation Aviation Department, City of

HoustonCar and Truck Sales TexAuto Facts Report,InfoNation,

Inc., Sugar Land TXRetail Sales Texas Comptrollers OfficeConsumer Price Index U.S. Bureau of Labor StatisticsHotels PKF Consulting/Hospitality Asset

Advisors InternationalPostings, Foreclosures Foreclosure Information & Listing

Service

STAY UP TO DATE!If you would like to receive this electronic publication on the first working day of each month, please e-mail your request for Economy at a Glanceto [email protected]. Include your name, title and phonenumber and your companys name and address. Archivedcopies are available to Partnership Membersin the Members Only section at www.houston.org. For information about joining the Greater HoustonPartnership and gaining access to this powerful resource, call Member Services at 713-844-3683.

The foregoing table is updated whenever any data change typically, 11 or so times per month. Iyou would like to receive those updates by e-mail, usually accompanied by commentary, please e-maiyour request for Key Economic Indicatorsto [email protected] the same identifying informationYou may request Glanceand Indicatorsin the same e-mail.


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HOUSTON MSA NONFARM PAYROLL EMPLOYMENT (000)Change from

Dec '10 Nov '10 Dec '09 Nov '10 Dec '09 Nov '10 Dec '09

Total Nonfarm Payroll Jobs 2,542.6 2,534.5 2,529.5 8.1 13.1 0.3 0.5

Total Private 2,166.9 2,157.2 2,152.8 9.7 14.1 0.4 0.7

Goods Producing 484.3 482.6 478.1 1.7 6.2 0.4 1.3

Service Providing 2,058.3 2,051.9 2,051.4 6.4 6.9 0.3 0.3

Private Service Providing 1,682.6 1,674.6 1,674.7 8.0 7.9 0.5 0.5

Mining and Logging 92.2 91.4 87.7 0.8 4.5 0.9 5.1

Oil & Gas Extraction 52.0 51.8 49.4 0.2 2.6 0.4 5.3

Support Activities for Mining 39.0 38.3 37.1 0.7 1.9 1.8 5.1

Construction 170.6 170.1 172.3 0.5 -1.7 0.3 -1.0

Manufacturing 221.5 221.1 218.1 0.4 3.4 0.2 1.6

Durable Goods Manufacturing 143.3 142.9 137.2 0.4 6.1 0.3 4.4Nondurable Goods Manufacturing 78.2 78.2 80.9 0.0 -2.7 0.0 -3.3

Wholesale Trade 128.8 128.6 129.5 0.2 -0.7 0.2 -0.5

Retail Trade 274.4 270.3 275.7 4.1 -1.3 1.5 -0.5

Transportation, Warehousing and Utilities 124.5 121.9 124.4 2.6 0.1 2.1 0.1

Utilities 16.6 16.5 16.5 0.1 0.1 0.6 0.6

Air Transportation 23.7 23.6 24.1 0.1 -0.4 0.4 -1.7

Truck Transportation 19.0 19.1 18.5 -0.1 0.5 -0.5 2.7

Pipeline Transportation 8.8 8.8 8.8 0.0 0.0 0.0 0.0

Balance, incl Warehousing, Water & Rail Transport 56.4 53.9 56.5 2.5 -0.1 4.6 -0.2

Information 32.3 32.2 33.8 0.1 -1.5 0.3 -4.4

Telecommunications 17.2 17.2 17.9 0.0 -0.7 0.0 -3.9

Finance & Insurance 87.0 86.9 87.1 0.1 -0.1 0.1 -0.1

Real Estate & Rental and Leasing 49.7 49.8 50.6 -0.1 -0.9 -0.2 -1.8

Professional & Business Services 348.3 348.6 350.0 -0.3 -1.7 -0.1 -0.5

Professional, Scientific & Technical Services 170.1 170.0 173.6 0.1 -3.5 0.1 -2.0Legal Services 22.9 22.8 23.2 0.1 -0.3 0.4 -1.3

Accounting, Tax Preparation, Bookkeeping 16.1 15.8 17.2 0.3 -1.1 1.9 -6.4

Architectural, Engineering & Related Services 60.7 61.1 60.5 -0.4 0.2 -0.7 0.3Computer Systems Design & Related Services 23.4 23.3 23.9 0.1 -0.5 0.4 -2.1

Admin & Support/Waste Mgt & Remediation 157.9 158.4 159.4 -0.5 -1.5 -0.3 -0.9Administrative & Support Services 150.8 151.4 151.6 -0.6 -0.8 -0.4 -0.5

Employment Services 51.4 51.6 49.7 -0.2 1.7 -0.4 3.4

Educational Services 43.4 43.6 42.5 -0.2 0.9 -0.5 2.1

Health Care & Social Assistance 268.2 267.4 260.7 0.8 7.5 0.3 2.9

Arts, Entertainment & Recreation 26.8 27.2 26.0 -0.4 0.8 -1.5 3.1

Accommodation & Food Services 207.7 206.4 203.8 1.3 3.9 0.6 1.9

Other Services 61.5 91.7 90.6 -30.2 -29.1 -32.9 -32.1

Government 375.7 377.3 376.7 -1.6 -1.0 -0.4 -0.3

Federal Government 28.1 28.2 28.4 -0.1 -0.3 -0.4 -1.1State Government 71.3 71.9 70.6 -0.6 0.7 -0.8 1.0State Government Educational Services 38.6 39.2 37.7 -0.6 0.9 -1.5 2.4

Local Government 276.3 277.2 277.7 -0.9 -1.4 -0.3 -0.5Local Government Educational Services 188.9 189.6 191.2 -0.7 -2.3 -0.4 -1.2

SOURCE: Texas Workforce Commission


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30

35

40

45

50

55

60

65

70

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

PURCHASING MANAGERS INDEXHOUSTON & U.S. 2002-2012

HOU ST ON U. S.

Source: Institute for Supply Management - Houston, Inc.

-120

-100

-80

-60

-40

-20

0

20

40

60

80

100

120

140

160

1.95

2.00

2.05

2.10

2.15

2.20

2.25

2.30

2.35

2.40

2.45

2.50

2.55

2.60

2.65


12-MONTHCHANGE(000)

NONFAR

MPAYROLLEMPLOYMENT(000,000)

HOUSTON MSA EMPLOYMENT2001-2011

12- MONTH CHANGE JOBS Source: Texas Workforce Commission


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1.60

1.65

1.70

1.75

1.80

1.85

1.90

1.95

2.00

2.05

2.10

2.15

2.20

2.25

430

440

450

460

470

480

490

500

510

520

530

540

550


SERVICE-PROVIDING(000,000)

GOODS-PRODUCING(000)

GOODS-PRODUCING AND SERVICE-PROVIDING EMPLOYMENTHOUSTON MSA 2001-2011

GOOD S-PR ODUC ING JOBS SER VI CE-PROVI DI NG JOBS

Source: Texas Workforce Commission

0

1

2

3

4

5

6

7

8

9

10

11


PERCENTOFLABORFORCE

UNEMPLOYMENT RATEHOUSTON & U.S. 2001-2011

HOUSTON U.S. Source: Texas Workforce Commission


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0

4

8

12

16

20

24

28

0

20

40

60

80

100

120

140


HENRYHUBNATURALGAS($/MMBTU)

WESTTEXASINTERMEDIATE($/BBL)

SPOT MARKET ENERGY PRICES2002 - 2012

WTI MONTHLY WTI 12-MO AVG GAS MONTHLY GAS 12-MO AVG Source:U.S. Energy Information Administration

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%


INFLATION: 12-MONTH CHANGE2002-2012

HOUSTON CPI-U U.S. C PI -U Source: U.S. Bureau of Labor Statistics

Houston Economic Update: March 2011

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Transcript of Houston Economic Update: March 2011