The Greater Houston Partnership is an economic development organization in Houston, Texas. They serve as a a gathering place for community minded business leaders who want to be involved in the positive growth and influence Houston’s economic trajectory. Below are some highlights from the September edition of the Greater Houston Partnership’s Economy at a Glance. Download the full report below.
The Next Four Months
- If the economy follows historic patterns, Houston should add 40,000 to 60,000 jobs through the remainder of ’21. That suggests a net gain of 80,000 to 100,000 jobs for the year, which would be one of the better years on record. It would still leave the region 90,000 to 110,000 jobs below pre-pandemic employment levels. A full recovery is not likely until early-’23.
The Big Picture
- The region’s outlook continues to improve, according to the latest Houston Purchasing Managers Index (PMI). The July ’21 PMI of 57.2 was up from 56.7 in June. Readings above 45 correlates with expansion of the service side of Houston’s economy, readings above 50 Houston’s goods producing sectors. July marked the 12th consecutive month with Houston’s PMI above 50.
Rays of Hope for Oil and Gas
- The spot price for West Texas Intermediate, the U.S. benchmark for light, sweet crude, has traded above $52 a barrel since the first week of January, the price at which most U.S. energy companies can profitably drill a well, according to the Federal Reserve Bank of Dallas. WTI has traded above $60 since mid-April.
Cloudy Days for Construction
- Houston’s construction industry continues to struggle. Dodge Data & Analytics reports new contracts for nonresidential projects are off 33.8 percent compared to this time last year. Contracts for non-building projects, like roads, bridges, and water treatment plants, are up 26.0 percent, but that’s off a much smaller base and not enough to offset losses elsewhere.
Not Enough Boxes
- Container traffic at the Port of Houston is on track to set a record this year. Through the first seven months of ’21, the port handled 1.9 million twenty-foot equivalent units (TEUs). If the current pace holds, the port will handle close to 3.3 million by January 1. The previous record was just over 3.0 million set in ’19.
- Houston home sales continue to soar. Brokers closed on 75,330 single-family homes, townhomes, condos and duplexes the first seven months of this year. That’s the highest level of January-to-July closings on record.
- Houston is setting another record, this one for multi-family absorption. In the 12 months ending July ’21, tenants have leased 30,584 units. That’s more than double the typical level of absorption for Houston.