Houston Economy at a Glance

Houston Economy at a Glance

The Greater Houston Partnership is an economic development organization in Houston, Texas. The Partnership is 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 March edition of the Greater Houston Partnership’s Economy at a Glance. Download the full report below.

Employment Overview

  • Metro Houston lost 361,400 jobs in March and April, 11,200 more than first reported. That exceeds the combined job losses from the ’80s oil bust (226,100) and the Great Recession (120,500). The Texas Workforce Commission (TWC), which gathered and published the data, overestimated the strength of the reopening. The region recouped 14,600 fewer jobs in May and June than first reported.
  • Through January, Houston sat 244,400 jobs below pre-pandemic levels. The region has recovered only 117,000 of the jobs, about one-third of those lost in the recession. The pandemic destroyed four years of growth; all the gains made since the end of the Fracking Bust. Total payroll employment stood at 2,947,800 in January of ’21, roughly the same level as January ’17.

Professional, Scientific and Technical Services

  • Several sectors that appeared minimally damaged from the downturn fared worse than first reported. Prior to the re-visions, professional, scientific, and technical services suffered minimal losses and by October exceeded pre-pandemic employment levels. That fit the conventional wisdom. Services like accounting, law and public relations could easily be performed remotely. Analysts assumed work at those firms went on as normal. But what analysts missed is that as other sectors cut costs, professional services went under the knife as well.

Retail

  • TWC also misread retail, initially reporting 27,000 jobs lost in March and April. The Partnership suspected that was an undercount given the extent of the shutdown. TWC revised the initial loss to 40,000, of which 33,000 have already been recouped. The Partnership is skeptical of these gains as well. Two dozen national chains with outlets in Houston filed bankruptcy last year. That does not include the mom-and-pop retailers that closed their doors. Retail real estate vacancies are rising. And Google Mobility data for January ’21 show retail traffic in Harris County was down 21 per-cent compared to January ’20.

Energy

  • Losses in Houston’s energy sector began well before the pandemic. Employment peaked in May of ’19 and trended down through December of ’19. Investors, frustrated by promised returns that never materialized, imposed “capital discipline” on the industry. This forced exploration firms to live within their means, i.e., not outspend their cash flow in pursuit of higher production. Exploration firms responded by scaling back their drilling programs. The industry finished the year with 270 fewer rigs (-25.0 percent) than it started with. Houston finished the year with 3,300 fewer upstream jobs (-4.1 percent) than it started with.
  • The outlook has improved marginally in recent months. WTI averaged $59 per barrel in February. The Energy Information Administration (EIA) forecasts crude to average $57 through the end of the year. Firms will likely use the increased cash flow to paydown debt and restore dividends cut during the pandemic, not to boost payrolls.

Finance and Insurance

  • The surge in homes sales and mortgage refinancing partially mitigated jobs losses in this sector. Banks still shed hundreds of jobs early in the pandemic, then more as the year progressed. Through January, losses totaled 1,300 jobs, about 4 percent of its pre-COVID workforce. Employment at brokerage firms held steady through the pandemic, the losses not coming until this January. Insurance agencies fared better, adding over 1,000 jobs since the pandemic began. At the current pace, the broad sector will likely recoup all its losses in the next few months

Click here to download the latest issue of the Economy at a Glance

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