Economic Outlook Forum – Economic Forecast
At the 2018 Economic Outlook Forum Patrick Jankowski, with the Greater Houston Partnership and Bobby Lieb, from the Houston Northwest Chamber of Commerce delivered the state of economies for the greater Houston area and the Houston Northwest area, respectively. With newly adjusted employment data from the Texas Workforce Commission, Patrick revealed the Greater Houston Area suffered a small recession in 2015 and 2016, with minor net job losses for both years. In 2017, the Greater Houston area gained back 63,000 jobs. However, the majority of those job gains were in the lower wage service and retail sectors and are not considered adequate replacements for the higher wage energy sector job losses suffered from the prior 3 years. The good news is the U.S. and World economies are experiencing healthy GDP growth, and that positive growth is forecasted again in 2018. The Houston economy is strong in both domestic and international exports. So, as long as those economies flourish, the Houston economy will continue to grow and remain healthy. Many are curious about how Hurricane Harvey affected the local Economy. Mr. Jankowski demonstrated that Harvey only had a temporary negative impact. The local Purchasing Manager’s Index (PMI) showed a minor contraction in the Greater Houston economy following Harvey, but quickly recovered and returned to expansion before the end of 2017.
Bobby Lieb took the opportunity with his presentation to focus on the more localized Houston Northwest economy. He noted the Houston Northwest economy almost mirrors the Greater Houston area economy in demographic and income profiles, real estate trends, and both rely heavily on the oil & gas industry for jobs. Yet, the two economies differ slightly in percentage of jobs within the different industry sectors. For instance, Houston Northwest has 11% more jobs in education and health care than Greater Houston. This is attributed to the fact that Houston Northwest is primarily a suburban area of Houston. This is also, demonstrated by the fact that more people leave the area during the day to commute to work than come in. Houston Northwest, also has a higher percentage of manufacturing jobs (10%) compared to Greater Houston & Texas, 7.5% and 7.3%, respectively. However, Bobby noted in the last 5 years Houston Northwest has lost almost 4,300 manufacturing jobs. This is not due to a decline in oil & gas, as expected, but primarily from the decline in computer and technology manufacturing. Like Patrick, Bobby stated the Houston Northwest economy recovered quickly from Hurricane Harvey, but predicted for the next several years will have challenges in attracting new companies due to Harvey’s stigma. Positively, Bobby forecasted that the Houston Northwest economy will add back energy related jobs if oil remains over $60/bbl in 2018.