Houston Economy at a Glance

June 2010 ©2010, Greater Houston Partnership

A publication of the Greater Houston Partnership Volume 19, Number 6 • June 2010

Employment Continues to Improve — The Houston-Sugar Land-Baytown Metropolitan Area added 2,700 jobs in April, according to the Texas Workforce Commission (TWC). Job gains in April reduced the 12-month net loss to 40,900 jobs. As recently as December ’09, Houston’s net 12-month job loss stood at 102,800. Job gains occurred in several sectors—health care and social assistance; administrative and support services; arts, entertainment and recreation; food services and drinking places; oil and gas extraction and support services; and real estate and rental and leasing. Construction and manufacturing reported losses in April but at subdued rates compared to this time last year.

April marks the third consecutive month of job gains for the region. Houston started to see improvement in the Purchasing Managers Index in April ’09. The U.S. rotary rig count bottomed out June ’09. Airport traffic and residential real es-tate sales began to improve September ’09. Customs district trade began to im-prove December ’09. Those improvements are finally showing up in the employ-ment numbers. Since February, Houston has added 28,400 jobs, about one-fifth of total jobs lost during the recession.

Several sectors account for the bulk of the employment growth this year—pro-fessional and business services (6,600 jobs), food services and drinking places (5,600 jobs), health care and social assistance (4,200 jobs), local education (2,700 jobs), arts, entertainment and recreation (2,400 jobs) and oil and gas extraction and support services (1,200 jobs). However, several sectors continue to report losses—construction (-600 jobs), wholesale and retail trade (-800 jobs), finance and insurance (-700 jobs) and information (-600 jobs). Although business services has added jobs, two subsectors suffered losses since January—accounting (-600) and architectural and engineering services (-900). As the economy improves, these sectors should report employment gains as well.

Harris County Wages Rise —– In Q4/09, Harris County recorded the highest average weekly wage among Texas’ counties with more than 75,000 jobs, according to the TWC. The weekly wage in Harris County averaged $1,197 in Q4/09, a 15 percent increase from the prior quarter and 27 percent above the state’s average of $944. Natural resources and mining sector posted the highest weekly wage— $3,131—more than twice the average weekly wage for manufacturing—$1,494—the next highest paying industry.

HOUSTON—THE ECONOMY AT A GLANCE


Rig Count up, Gas Prices Flat, Oil Prices Slipping — The Baker Hughes count of active domestic rotary rigs averaged 1,507 in May, ending the month at 1,535—the highest level in 71 weeks, and 75 percent above the recent low of 876 last June.

The Friday closing spot market price of Henry Hub natural gas has held fairly stable at around $4 per MMBtu since mid-March. In its May Short-Term Energy Outlook, the agency forecasts the Henry Hub spot price to average $4.48 per MMBtu in ’10 and $5.34 in ’11. Inventories of gas in storage remain high, how-ever, and continue to exert downward pressure on prices.

The Friday closing spot market price for West Texas Intermediate crude oil (WTI) hovered around $70 a barrel in May, having slipped from around $84 a barrel in April. The drop in price resulted more from a strengthening of the dollar than any decline in oil demand. EIA projects that world oil consumption will grow by 1.6 million barrels per day in 2010, slightly higher than in last month's Outlook, and also by 1.6 million barrels per day in 2011.

Homebuyer Tax Credit Boosts Housing Market — Single-family home sales tallied on the Houston Multiple Listing Service rose for the second consecutive month in April ’10, the Houston Association of Realtors® (HAR) reported. Houston area closings in April totaled 5,321, a 26.7 percent increase from a year earlier. “The Houston real estate market seems to have truly benefited from home-buyers who acted by April 30 to take advantage of the tax credit as well as low mortgage interest rates,” said Margie Dorrance, HAR chair. The $8,000 tax credit for first time homebuyers expired April 30 and required homebuyers to sign closing papers by June 30.

Unlike many other parts of the nation, Houston’s home prices continue to appre-ciate. As sales activity has increased, prices have continued to rise. The average price of a single-family home increased 6.8 percent to $206,414, driven by a 53.4 percent rise in luxury home sales ($500,000+). The median price of a single-family home sold in Houston in April ’10 was $153,500, up 2.4 percent from a year earlier—the highest for an April in Houston.

Sales pending at the end of April totaled 4,613—the highest since July ’08 and up 25.2 percent from April ’09. Single-family inventory stood at a 6.5 month supply, up from a 6.0 month supply a year ago.

The tax credit also seems to have boosted Houston’s new single-family home market. Net sales of new single-family homes in April totaled 2,251, up 17.5 percent from last year, according to a Metrostudy survey that covers approximately 75 percent of the Houston new single-family market.

However, with the expiration of the homebuyer tax credit, builders are expected to reduce their spec construction. Lower traffic and new home sales are also expected.



The number of spec homes under construction increased by 25 percent from April ’09, but fell by 247 units from March ’10. The number of completed spec homes fell 27 percent from April ’09 and 14 percent from March ’10.

International Air Traffic Grows, Domestic Flat — Through April of this year, the Houston Airport System (HAS) handled 15.40 million passengers, up 1.4 percent from 15.18 million passengers over the same time last year. Domestic traffic totaled 12.72 million passengers, up 0.5 percent from 12.66 million passengers last year. International traffic totaled 2.68 million passengers, up 6.5 percent from the 2.52 million passengers from last year. April is the eighth consecutive month to post over-the-year growth in total passenger volume.

Air freight continued to post strong gains in April ‘10, up 13.6 percent over April ’09. Over-the-year gains in air freight were up 16.4 percent over the same period last year. Air cargo volume has picked up sharply since last September as the economy continues to recover from the previous recession.

Foreign Trade Improving — The Houston-Galveston Customs District handled foreign trade valued at $18.3 billion in March, up 44 percent from $12.7 billion in March ’09, according to the U.S. Census Bureau. Exports totaled $8.2 billion, up 37 percent from $5.9 billion in March ’09. Imports totaled $11.1 billion, up 50 percent from $6.7 billion in March ’09.

For the first quarter of ‘09, trade totaled $47.8 billion, up 30 percent from $36.9 billion last year. Exports were $21.3 billion, up 29 percent from $16.6 billion last year. Imports were $26.4 billion, up 30 percent from $20.3 billion last year.

Fuel oils, machinery, chemicals, plastics, vehicles, vehicle parts, iron and steel, cereals and scientific instruments comprise the bulk of the goods passing through the Houston-Galveston customs district. The recent surge in exports and imports reflects the improving U.S. and global economies and the need to replenish inventories depleted during the recession. However, economists have expressed concern that Europe’s recent woes and the stronger dollar may slow U.S. export growth.

Houston Maintains Low Cost of Living — In Q1/10, the cost of living in Houston was 18 percent below the average for 27 metropolitan areas over 2 million population and 9 percent below the average for all 308 reporting places, according to the ACCRA Cost of Living Index. The index, produced by the Council for Community and Economic Research, measures differences in the relative cost of consumer goods and services appropriate for a professional or managerial household.

Bargain housing costs help maintain Houston’s low cost of living. In Q1/10, housing costs in Houston were 39 percent below the major metro average and 22



percent below the average of all 308 reporting places. According to the ACCRA survey, the same new house that cost $209,000 in Houston in January cost $348,744 in Miami, $420,600 in Boston and $607,391 in Washington, D.C.

The cost of grocery items in Houston was also the lowest among the major metro areas, 17 percent below the major metro average and 13 percent below the national average. Houston did not differ significantly from the nationwide average on the other components: utilities, transportation, health care, and miscellaneous goods and services.

____________________________________ The Greater Houston Partnership is the primary advocate of Houston’s 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.



Houston Economic IndicatorsA Service of the Greater Houston Partnership

Most Year % Most Year %Month Recent Earlier Change Recent Earlier Change

ENERGYU.S. Active Rotary Rigs May '10 1,513 918 64.8 1,405 * 1,178 * 19.3Spot Crude Oil Price ($/bbl, West Texas Intermediate) Apr '10 84.50 51.44 64.3 79.89 * 45.40 * 76.0Spot Natural Gas ($/MMBtu, Henry Hub) Apr '10 3.94 3.47 13.5 4.74 * 4.27 * 11.0

UTILITIES AND PRODUCTIONHouston Purchasing Managers Index Apr '10 58.1 40.9 42.1 55.6 * 39.8 * 39.7Nonresidential Electric Current Sales (Mwh, CNP Service Area) Apr '10 4,009,797 3,675,415 9.1 15,394,679 15,064,200 2.2

CONSTRUCTIONTotal Building Contracts ($, Houston MSA) Apr '10 857,440,000 763,052,000 12.4 2,838,414,000 2,676,859,000 6.0Nonresidential Apr '10 356,808,000 347,505,000 2.7 947,626,000 1,248,951,000 -24.1Residential Apr '10 500,632,000 415,547,000 20.5 1,890,788,000 1,427,908,000 32.4Building Permits ($, City of Houston) Apr '10 292,516,073 210,904,260 38.7 995,998,781 1,323,574,618 -24.7Nonresidential Apr '10 186,202,144 139,380,862 33.6 625,799,507 1,014,654,957 -38.3New Nonresidential Apr '10 69,578,711 68,306,803 1.9 242,992,011 343,019,410 -29.2Nonresidential Additions/Alterations/Conversions Apr '10 116,623,433 71,074,059 64.1 382,807,496 671,635,547 -43.0Residential Apr '10 106,313,929 71,523,398 48.6 370,199,274 308,919,661 19.8New Residential Apr '10 84,110,357 46,436,898 81.1 284,940,228 229,224,514 24.3Residential Additions/Alterations/Conversions Apr '10 22,203,572 25,086,500 -11.5 85,259,046 79,695,147 7.0Multiple Listing Service (MLS) ActivityClosings Apr '10 6,200 4,895 26.7 18,850 17,246 9.3Median Sales Price - SF Detached Apr '10 153,500 149,900 2.4 149,813 * 140,503 * 6.6Active Listings Apr '10 48,869 45,269 8.0 47,442 * 44,991 * 5.4

EMPLOYMENT (Houston-Sugar Land-Baytown MSA)Nonfarm Payroll Employment Apr '10 2,507,900 2,548,800 -1.6 2,496,200 * 2,563,300 * -2.6Goods Producing (Natural Resources/Mining/Const/Mfg) Apr '10 472,000 502,300 -6.0 472,400 * 516,700 * -8.6Service Providing Apr '10 2,035,900 2,046,500 -0.5 2,023,800 * 2,046,600 * -1.1Unemployment Rate (%) - Not Seasonally AdjustedHouston-Sugar Land-Baytown MSA Apr '10 8.4 6.7 8.6 * 6.6 *Texas Apr '10 8.1 6.8 8.3 * 6.9 *U.S. Apr '10 9.5 8.6 10.2 * 8.8 *Unemployment Insurance Claims (Gulf Coast WDA)Initial Claims Apr '10 22,823 27,306 -16.4 22,517 * 26,919 * -16.4Continuing Claims Apr '10 97,017 129,217 -24.9 112,395 * 118,592 * -5.2

TRANSPORTATIONPort of Houston Authority Shipments (Short Tons) Apr '10 3,051,919 3,075,871 -0.8 12,286,706 12,535,725 -2.0Air Passengers (Houston Airport System) Apr '10 3,972,022 3,980,644 -0.2 15,406,043 15,186,020 1.4Domestic Passengers Apr '10 3,316,921 3,341,659 -0.7 12,721,652 12,664,585 0.5International Passengers Apr '10 655,101 638,985 2.5 2,684,391 2,521,435 6.5Landings and Takeoffs Apr '10 69,408 73,595 -5.7 278,725 288,225 -3.3Air Freight (000 lb) Apr '10 70,983 62,502 13.6 278,380 239,125 16.4Enplaned Apr '10 37,569 33,723 11.4 146,752 128,848 13.9Deplaned Apr '10 33,414 28,779 16.1 131,628 110,277 19.4

CONSUMERSNew Car and Truck Sales (Units, Houston MSA) Apr '10 19,634 17,520 12.1 79,105 69,057 14.6Cars Apr '10 8,946 7,794 14.8 36,337 30,810 17.9Trucks, SUVs and Commercials Apr '10 10,688 9,726 9.9 42,768 38,247 11.8Total Retail Sales ($000,000, Houston MSA, NAICS Basis) 3Q09 18,738 20,136 -6.9 53,679 59,150 -9.3Consumer Price Index for All Urban Consumers ('82-'84=100)Houston-Galveston-Brazoria CMSA Apr '10 194.037 189.701 2.3 192.836 * 188.365 * 2.4United States Apr '10 218.009 213.24 2.2 217.267 * 212.321 * 2.3Hotel Performance (Harris County)Occupancy (%) Dec '09 45.5 57.5 60.2 * 70.1 *Average Room Rate ($) Dec '09 108.44 118.29 -8.3 116.79 * 126.58 * -7.7Revenue Per Available Room ($) Dec '09 49.38 68.06 -27.4 70.30 * 88.79 * -20.8

POSTINGS AND FORECLOSURESPostings (Harris County) May '10 3,492 3,757 -7.1 19,468 14,342 35.7Foreclosures (Harris County) May '10 958 1,060 -9.6 5,548 4,104 35.2

YEAR-TO-DATETOTAL OR AVERAGE*MONTHLY DATA



Sources Rig Count Baker Hughes Incorporated Spot WTI, Spot Natural Gas U.S. Energy Information Agency Houston Purchasing Managers National Association of Index Purchasing Management – Houston, Inc. Electricity CenterPoint Energy Building Construction Contracts McGraw-Hill Construction City of Houston Building Permits Building Permit Department, City of Houston MLS Data Houston Association of Realtors® Employment, Unemployment Texas Workforce Commission

Port Shipments Port of Houston Authority Aviation Aviation Department, City of Houston Car and Truck Sales TexAuto Facts Report, InfoNation,

Inc., Sugar Land TX Retail Sales Texas Comptroller’s Office Consumer Price Index U.S. Bureau of Labor Statistics Hotels PKF Consulting/Hospitality Asset Advisors International Postings, 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 Glance to [email protected]. Include your name, title and phone number and your company’s name and address. Archived copies are available to Partnership Members in the Members Only section at www.houston.org. For information about joining the Greater Houston Partnership 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. If you would like to receive those updates by e-mail, usually accompanied by commentary, please e-mail your request for Key Economic Indicators to [email protected] with the same identifying information. You may request Glance and Indicators in the same e-mail.



HOUSTON MSA NONFARM PAYROLL EMPLOYMENT (000) Change from % Change from

Apr '10 Mar '10 Apr '09 Mar '10 Apr '09 Mar '10 Apr '09

Total Nonfarm Payroll Jobs 2,507.9 2,505.2 2,548.8 2.7 -40.9 0.1 -1.6Total Private 2,127.3 2,126.2 2,175.2 1.1 -47.9 0.1 -2.2Goods Producing 472.0 473.1 502.3 -1.1 -30.3 -0.2 -6.0Service Providing 2,035.9 2,032.1 2,046.5 3.8 -10.6 0.2 -0.5 Private Service Providing 1,655.3 1,653.1 1,672.9 2.2 -17.6 0.1 -1.1

Mining and Logging 87.8 87.8 87.3 0.0 0.5 0.0 0.6 Oil & Gas Extraction 49.9 49.6 48.0 0.3 1.9 0.6 4.0 Support Activities for Mining 36.8 37.0 38.3 -0.2 -1.5 -0.5 -3.9

Construction 166.6 167.3 186.0 -0.7 -19.4 -0.4 -10.4

Manufacturing 217.6 218.0 229.0 -0.4 -11.4 -0.2 -5.0 Durable Goods Manufacturing 138.1 138.1 147.6 0.0 -9.5 0.0 -6.4 Nondurable Goods Manufacturing 79.5 79.9 81.4 -0.4 -1.9 -0.5 -2.3

Wholesale Trade 126.9 128.3 132.8 -1.4 -5.9 -1.1 -4.4

Retail Trade 258.6 259.4 260.8 -0.8 -2.2 -0.3 -0.8

Transportation, Warehousing and Utilities 119.2 119.3 123.8 -0.1 -4.6 -0.1 -3.7 Utilities 16.7 16.6 16.8 0.1 -0.1 0.6 -0.6 Air Transportation 23.9 23.9 24.6 0.0 -0.7 0.0 -2.8 Truck Transportation 18.2 18.2 19.5 0.0 -1.3 0.0 -6.7 Pipeline Transportation 8.9 8.8 8.7 0.1 0.2 1.1 2.3 Balance, incl Warehousing, Water & Rail Transport 51.5 51.8 54.2 -0.3 -2.7 -0.6 -5.0

Information 32.7 33.2 34.8 -0.5 -2.1 -1.5 -6.0 Telecommunications 17.6 17.8 18.1 -0.2 -0.5 -1.1 -2.8

Finance & Insurance 86.4 86.6 88.7 -0.2 -2.3 -0.2 -2.6

Real Estate & Rental and Leasing 50.7 50.5 50.9 0.2 -0.2 0.4 -0.4

Professional & Business Services 348.5 347.7 360.1 0.8 -11.6 0.2 -3.2 Professional, Scientific & Technical Services 169.4 169.5 177.6 -0.1 -8.2 -0.1 -4.6 Legal Services 22.7 22.7 23.0 0.0 -0.3 0.0 -1.3 Accounting, Tax Preparation, Bookkeeping 17.4 17.7 19.5 -0.3 -2.1 -1.7 -10.8 Architectural, Engineering & Related Services 58.8 59.0 62.1 -0.2 -3.3 -0.3 -5.3 Computer Systems Design & Related Services 23.7 23.4 24.2 0.3 -0.5 1.3 -2.1 Admin & Support/Waste Mgt & Remediation 158.9 157.9 162.8 1.0 -3.9 0.6 -2.4 Administrative & Support Services 151.5 150.0 154.3 1.5 -2.8 1.0 -1.8 Employment Services 49.6 48.7 52.9 0.9 -3.3 1.8 -6.2

Educational Services 43.2 43.1 41.4 0.1 1.8 0.2 4.3

Health Care & Social Assistance 262.6 261.1 251.8 1.5 10.8 0.6 4.3

Arts, Entertainment & Recreation 27.8 27.1 27.2 0.7 0.6 2.6 2.2

Accommodation & Food Services 206.9 205.7 208.2 1.2 -1.3 0.6 -0.6

Other Services 91.8 91.1 92.4 0.7 -0.6 0.8 -0.6

Government 380.6 379.0 373.6 1.6 7.0 0.4 1.9 Federal Government 30.2 29.1 31.1 1.1 -0.9 3.8 -2.9 State Government 71.7 71.4 69.8 0.3 1.9 0.4 2.7 State Government Educational Services 38.8 38.6 36.1 0.2 2.7 0.5 7.5 Local Government 278.7 278.5 272.7 0.2 6.0 0.1 2.2 Local Government Educational Services 191.7 192.6 188.5 -0.9 3.2 -0.5 1.7

SOURCE: Texas Workforce Commission



-8.8

-7.5

-5.1

4.3

9.8

14.1

31.1

34.8

49.6

55.6

Houston-Sugar Land-Baytown TX

Dallas-Fort Worth-Arlington TX

Atlanta-Sandy Springs-Marietta GA

Denver-Aurora CO

Miami-Fort Lauderdale-Miami Beach FL

Seattle-Tacoma-Bellevue WA

Boston-Cambridge-Quincy MA-NH

Washington-Arlington-Alexandria DC-VA-MD-WV

San Francisco-Oakland-Fremont CA

New York-Newark-Edison NY-NJ-PA

% Below/Above Nationwide Average

Q1/10 COST OF LIVING COMPARISONS: SELECTED METROS

Source: ACCRA, ACCRA Cost of Living Index

-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

Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

12-M

ONT

H CH

ANG

E (

000)

NONF

ARM

PAY

RO

LL E

MPL

OYM

ENT

(000

,000

)

HOUSTON MSA EMPLOYMENT2001-2011

12-MONTH CHANGE JOBS Source: Texas Workforce Commission



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

Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 40179 Jan-11

SERV

ICE-

PRO

VIDI

NG (

000,

000)

GO

ODS

-PRO

DUCI

NG

(00

0)

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

GOODS-PRODUCING JOBS SERVICE-PROVIDING JOBS

Source: Texas Workforce Commission

0

1

2

3

4

5

6

7

8

9

10

11

Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 40179 Jan-11

PERC

ENT

OF

LABO

R F

ORC

E

UNEMPLOYMENT RATEHOUSTON & U.S. 2001-2011

HOUSTON U.S. Source: Texas Workforce Commission



0

4

8

12

16

20

24

28

0

20

40

60

80

100

120

140


HEN

RY H

UB N

ATU

RAL

GA

S ($

/MM

BTU

)

WE

ST T

EXAS

INTE

RMED

IATE

($/

BBL)

SPOT MARKET ENERGY PRICES2001 - 2011

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 CHANGE2001-2011

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

Houston Economy at a Glance

Real Estate

Transcript of Houston Economy at a Glance