A publication of the Greater Houston Partnership Volume 24 Number 10 October 2015 Batting.333 Three factors drive Houston s economy the price of oil, the value of the dollar, and the health of the U.S. economy. Two of the three are currently struggling at the plate. The stats show oil to be in a slump. Crude trades at less than half its June 14 peak. Exploration firms have slashed their budgets 50 percent or more. The rig count has fallen nearly 60 percent. Drilling permits are down 40 percent. Layoff notices appear in the media almost daily. One week, analysts forecast crude will slip below $20 in the spring; the next, they predict crude will top $80 by the fall. What s certain is that the industry is in transition, with more layoffs, bankruptcies, mergers and acquisitions to come. Oil prices, a catalyst for growth in recent years, are now a drag on Houston s economy. The industry is restructuring, but it s too early to know how long the reorganization will last or what the industry will look like when it s done. Houston is in no danger of losing its role as Energy Capital of the World, but the industry will look much different in the future fewer firms, a smaller workforce, greater capital discipline, and even more reliance on technology. U.S. ENERGY INDUSTRY OVERVIEW Peak Date Recent Date % From Peak West Texas Intermediate Spot Price ($/barrel) $107.95 6/20/14 $45.38 9/30/15-58.7 North American Active Rig Count 1,931 9/26/14 848 9/25/15-56.6 U.S. Drilling Permits Issued (YTD) 51,532 Aug 14 30,101 Aug 15-41.6 Domestic Crude Output (Million Barrels/Day) 9.612 Apr 15 9.296 Jun 15-3.3 U.S. Energy Industry Employment 540,800 Sep 14 485,700 Jul 15-10.2 Sources: U.S. Energy Information Administration, Baker Hughes, RigData, and Bureau of Labor Statistics Foreign trade is as important to Houston as energy. The Houston-Galveston Customs District routinely handles $250 billion in trade (exports and imports) per year. More than 5,000 Houston companies do business overseas. And The Brookings Institution estimates that exports account for nearly one-fifth of the region s gross domestic product. Unfortunately, growth has slowed in many emerging markets, reducing the demand for Houston s exports. To make matters worse, the U.S. dollar has appreciated nearly 20 percent in value over the past 18 months, making U.S. goods and commodities more expensive overseas. As a result, exports via the customs district have slipped $10.3 billion (13.3 percent) through August October 2015 2015, Greater Houston Partnership Page 1
compared to the same period last year. Though data are not available, the strong dollar has undoubtedly hurt the Houston firms that export their services overseas. The U.S. economy is the only power hitter in the lineup. The Bureau of Economic Analysis estimates that U.S. gross domestic product (GDP) grew 3.9 percent in the second quarter. Employment growth is averaging 250,000 jobs per month. And the nation is on pace to start nearly 1.2 million housing units this year. All of these signs translate into improved domestic demand for the chemicals, plastics, industrial and electrical equipment that Houston produces. The improving U.S. economy helps, but it won t offset the impact of weak oil prices and a strong dollar on Houston. Growth here will sputter along until at least one of the other two the price of oil and the value of the dollar swings in Houston s favor. Job Count Still in the Hole Houston employment remains 22,200 jobs below its December 14 peak. Some seasonal losses are always expected as employees hired for the holiday shopping season are let go, construction activity drops off, and companies complete year-end reorganizations. Over the past two decades, employers have cut an average of 45,000 jobs the first month of the year. The region typically recoups those losses in February and March, and payroll employment reaches a new peak by April. Nine months into this year, however, Houston continues to lose ground. The sectors that are growing haven t added enough jobs to offset losses elsewhere. The September employment report (due out October 16) may provide some clue as to how the year will finish. Houston typically adds 6,000 to 18,000 jobs in the month, 10,000 being the 20-year average. Job growth comes from several sources, with the return of educators to the classroom accounting for the bulk of the gains. If the Texas Workforce Commission reports at least minimal job growth for Houston in September, the year should end on a positive note. Since 95, the region has created an average of 29,000 jobs in the fourth quarter. If Houston fails to add any jobs in September, hiring in Q4 might not be enough to offset the job losses so far this year. METRO HOUSTON EMPLOYMENT CHANGES SINCE DECEMBER 14 Sector Jobs Gained/Lost Leisure and Hospitality +21,900 Business Services +8,800 Health Care +5,700 Information +1,400 Wholesale Trade -3,100 Retail Trade -3,200 Finance and Real Estate -4,600 Transport, Warehouse, Utils -5,100 Mining and Logging -5,500 Construction -5,800 Manufacturing -12,200 Source: Texas Workforce Commission The Partnership recently revised its employment outlook to better reflect current economic conditions. The forecast now calls for the region to add 20,000 to 30,000 jobs in 15. That compares to 104,700 created in 14 and 89,900 created the year prior. October 2015 2015, Greater Houston Partnership Page 2
Shuffling the Lineup From 05 to 14, Metro Houston 1 created nearly 650,000 jobs, gross domestic product grew by more than $200 billion, and the region added 1.3 million residents. About 45 percent of the new residents arrived via the maternity ward and 55 percent via the moving van. This leap in local population has altered Houston s demographic profile. Each September, the U.S. Census Bureau releases data from the American Community Survey (ACS), an annual snapshot of the nation s economic, housing and social characteristics. By comparing Houston ACS data for 05 and 14, one can see changes in the region s population over that period. The Partnership has compared data from the 05 and 14 ACS 2 for the nine-county Houston region and finds the following: Houston s population continues to diversify. Hispanic residents accounted for more than half the region s population growth since 05. If that trend continues, by the end of the decade Hispanics will be the largest racial/ethnic group in the region. Black and Asian population growth outpaced Anglo growth as well. Houston s black population now exceeds 1.0 million residents, and the region s Asian population should surpass half a million next year. HOUSTON METRO AREA RACE AND ETHNICITY, '05 AND '14 ------- 14 ------- ------- 05 ------- Count % Count % Total population 6,490,180 100.0 5,193,448 100.0 Anglo 2,452,709 37.8 2,313,993 44.6 Hispanic 2,356,245 36.3 1,686,048 32.5 Black 1,092,194 16.8 830,445 16.0 Asian 471,037 7.3 290,923 5.6 American Indian 11,938 0.2 12,969 0.2 Houston continues to age. In 05, the median age for the region was 32.9 years. By 14, it had risen to 34.0. The Source: American Community Surveys, 05 and 14 median age for the U.S. as a whole is 37.7 years. Likewise, the population 65 and older rose by 236,000 residents over the past nine years. Seniors (i.e., those 65 and older) represent 9.8 percent of the region s population, up from 7.7 percent in 05. The share of households receiving Social Security income rose from 18.8 to 21.0 percent from 05 to 14. Hawaiian/Pacific Islander 3,654 0.1 3,502 0.1 Some other race 11,801 0.2 10,638 0.2 Two or more races 90,602 1.4 44,930 0.9 The local labor force participation rate has fallen, but not to the same extent as the national rate. In 05, 68.8 percent of Houstonians 16 and older were in the labor force (i.e., employed or actively looking for work). By 14, the labor force participation rate had slipped to 67.1 percent. The U.S. rate fell from 66.0 to 62.9 percent over the same period. There s a reason traffic has worsened. The ACS reports that 2.9 million Houstonians commute to work each day, up from 2.2 million in 05. Nine out of 10 drive alone or ride in a 1 Metro Houston is shorthand for the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area, which includes Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller Counties. Prior to 2012, the Houston metro area also included San Jacinto County. 2 05 is the earliest year for which ACS data are available. October 2015 2015, Greater Houston Partnership Page 3
carpool. That s essentially unchanged from 05. Only 2.4 percent of Houston commuters use public transit, down from 2.8 percent in 05. The share who work at home rose from 2.9 to 3.5 percent over that period. Average travel time to work is 29.2 minutes, up from 28.1 minutes in 05. More Houstonians work in the energy industry now. That s not surprising given the rise in oil prices and drilling activity from 05 to 14. Nine years ago, only 2.5 percent of the region s 2.4 million workers identified themselves as employed in the oil and gas industry. Last year, 4.2 percent of the region s 3.1 million did so. Houston has grown smarter. The number of adults with a bachelor s degree or higher has grown by more than 380,000, and the number completing high school by more than 850,000. The share of adults without a high school diploma has dropped from 21.3 percent to 18.0 percent over the past nine years. EDUCATION ATTAINMENT, METRO HOUSTON, POPULATION 25 AND OLDER Highest Education Level 14 Population Fewer Houstonians are self-employed. In 05, 7.1 percent of the region s population was self-employed. That figure dropped to 6.2 percent in 14. That number may creep up in coming years as the weaker economy forces many to become entrepreneurs by circumstance, not by choice. Incomes have outpaced inflation. The median household income for Houston was $46,706 in 05. Adjusted for inflation, that would be $56,615 in 14. The ACS found the median household income in 14 was $60,072. (Note: The annual inflation rate hovered around 4 percent in the middle of the last decade, but for the past six years has averaged less than 2 percent.) Houston has more middle class and affluent households now. The ACS recorded 450,000 households earning between $100,000 and $200,000 in 14, up from 273,000 in 05. The ACS also reported 178,000 households in Houston with incomes of $200,000 or more in 13, nearly triple the 65,500 households in 05. The war on poverty hasn t ended, however. In 14, 188,000 families, 12.2 percent of all families in the region, lived in poverty, up from 172,000 in 05 but down from 13.4 percent in 05. October 2015 2015, Greater Houston Partnership Page 4 % 05 Population Less than 9th grade 391,205 9.5 330,497 10.3 9th to 12th grade, no diploma 350,025 8.5 352,958 11.0 High school graduate 943,010 22.9 789,342 24.6 Some college, no degree 901,830 21.9 654,576 20.4 Associate's degree 255,313 6.2 186,105 5.8 Bachelor's degree 815,354 19.8 596,820 18.6 Graduate or professional degree 461,210 11.2 298,410 9.3 High school graduate or higher 3,376,717 82.0 2,525,252 78.7 Bachelor's degree or higher 1,276,564 31.0 895,229 27.9 Population 25 years and over 4,117,947 100.0 3,208,707 100.0 Note: Total may not sum evenly due to rounding Source: American Community Surveys, 05 and 14 %
Female-headed households continue to struggle. For families headed by a female with children but with no husband present, the poverty rate dropped from 41.5 to 37.7 percent. However, the number of these families rose from 74,000 to 79,000. Fewer are uninsured. In 09, 75.4 percent of Houstonians had health insurance. In 14, 80.4 percent had coverage. (Insurance status data for 05 are not available.) Houston continues to draw population from overseas. The 14 ACS found that nearly 1.5 million Houston residents were born outside the U.S., up from 1.1 million in 05. Today, 23.1 percent of all Houstonians are foreign born compared to 21.1 percent in 05. Two distinct groups of foreignborn residents have emerged. Those who have been naturalized (i.e., received U.S. citizenship) are more likely to be married, in the workforce, and have attained a college degree than U.S.-born Houstonians. Naturalized residents are also more likely to have a median household income that exceeds the average household income for the region ($60,072). Noncitizens are more likely to be married and in the workforce than U.S.-born Houstonians, but they are likely to be less educated and live in a household with substantially less income than native born residents. Foreign-born, regardless of citizenship status, are more likely to be enrolled in college or graduate school than native born. SELECTED CHARACTERISTICS BY CITIZENSHIP STATUS METRO HOUSTON POPULATION Citizenship Status - % or # Native Born Naturalized Non- Citizen Population 15 years and over 3,595,078 534,229 890,708 Never married 37.0% 15.1% 31.4% Now married 44.9 68.3 57.6 Divorced or separated 13.5 11.0 8.1 Widowed 4.6 5.6 3.0 Population 3 years and over enrolled in school 1,632,325 55,802 141,740 Nursery school, preschool 7.1% 1.2% 1.6% Elementary school (grades K-8) 51.7 14.8 33.0 High school (grades 9-12) 20.1 16.7 26.7 College or graduate school 21.2 67.3 38.7 Population 25 years and over 2,841,687 507,116 769,144 Less than high school graduate 9.4% 22.2% 47.0% High school graduate 24.1 18.6 21.3 Some college or associate's degree 33.6 20.9 12.4 Bachelor's degree 21.8 22.8 10.7 Graduate or professional degree 11.1 15.5 8.6 Population 16 years and over 3,505,114 532,805 883,775 In labor force 66.1% 70.9% 68.7% In the Civilian labor force 66.0 70.9 68.7 Employed 62.0 68.3 65.1 Unemployed 4.1 2.6 3.6 Median household income (dollars) 64,885 65,445 37,381 Source: 2014 American Community Survey An Urban Myth That Refuses to Die In spite of what Bloomberg, the Huffington Post and various media outlets have reported, the city of Houston is not on the verge of overtaking Chicago as the nation s third most populous city. True, the Bayou City is growing faster than the Windy City, but Chicago s population exceeds Houston s by more than 482,000 residents. Even in the most optimistic of scenarios, decades will pass before Houston closes that gap. This is explained below. October 2015 2015, Greater Houston Partnership Page 5
Scenario I Growth Based on Recent History 3 According to the U.S. Census Bureau, Chicago added 25,000 residents over the past four years, or approximately of 6,250 residents per year. The city of Houston added approximately 137,000 residents over the same period, an average of 34,250 residents per year. If both cities maintain those growth rates, Houston would overtake Chicago in 32, or 17 years from now. But one shouldn t expect Houston to maintain the recent pace indefinitely. The metro area boomed from 10 to 14, adding $125 billion to GDP and creating nearly 370,000 jobs. That economic expansion brought 300,000 newcomers to the region, Source: Census data and Partnership calculations many settling inside the city. Beginning late in 14, the region s economy entered a slower growth phase and will likely create significantly fewer jobs, perhaps none at all, in coming years. That change translates into fewer people moving here. As a result, Houston will gain ground more slowly on Chicago. The day the home of Sam Houston overtakes the home of Rahm Emanuel will be pushed still further into the future. Scenario II: Growth based on separate histories. Scenario I Recent History Year Actual Populations Chicago Houston '10 2,697,319 2,102,421 '14 2,722,389 2,239,558, '10-'14 25,070 137,137 Avg Annual 6,268 34,284 Year Projected Populations '15 2,728,657 2,273,842 '20 2,759,994 2,445,264 '25 2,791,332 2,616,685 '30 2,822,669 2,788,106 '32 2,835,204 2,856,675 From 00 to 10, the city of Houston added about 130,000 residents, or 13,000 per year. 4 That was a decade in which the region completed a full business cycle slow growth, rapid growth, a peak, a recession, a trough and then growth again. That mixture of ups and downs suggests that population growth in the decade was closer to what should be normal for Houston. If Chicago s population grows by 6,000 residents per year (Scenario I above) and Houston grows by 13,000 residents per year (a more normal average), the Bayou City wouldn t overtake the Windy City until 82, or 67 years from now. Scenario II Different Histories Population Projections Year Chicago Houston Avg Annual 6,000 13,000 '15 2,728,657 2,253,020 30 2,822,669 2,454,953 45 2,916,682 2,656,886 60 3,010,694 2,858,819 75 3,104,707 3,060,752 '83 3,148,579 3,154,988 Source: Census data and Partnership calculations 3 Data are for the period from July 1, 2010 through July 1, 2014. 4 That the city of Houston s population growth from 10 to 14 nearly matched that from 00 to 10 underscores how the pace of the past few years is unstainable and should not be used to extrapolate the city s population growth. October 2015 2015, Greater Houston Partnership Page 6
Scenario III: What Official Forecasters Say The Houston-Galveston Area Council (HGAC) forecasts population, employment, and land use for the cities and counties on the Texas Gulf Coast. The Chicago Metropolitan Agency for Planning (CMAP) forecasts population, households and employment for its respective metro area. CMAP expects Chicago s population to reach 3,092,262 in 40. HGAC projects Houston s population to reach 2,939,131 by then. In other words, 25 years from now Houston s population still falls 150,000 short of Chicago s. The Windy City s forecast doesn t extend past 40, but if one extrapolates, Houston would overtake Chicago in 52, or 37 years from now. To summarize, in Scenario I, Houston won t overtake Chicago until today s kindergarteners have graduated from college, in Scenario III, not until they re in their 30s, and Scenario II, not until they re well into retirement. To put it bluntly, the city of Houston is unlikely to overtake the city of Chicago any time soon. Half a Trillion Dollars The U.S. Bureau of Economic Analysis (BEA) estimates Houston s gross domestic product (GDP) reached $525.4 billion in 14, ranking it as the nation s fourth largest metro economy. If Houston were an independent nation, the region would have the 26 th largest economy in the world, placing it behind Belgium ($527.8 billion) and ahead of Norway ($511.6 billion). 5 Sectors accounting for the largest share of GDP were mining ($101.1 billion; 19.2 percent), manufacturing ($80.5 billion; 15.3 percent), and professional and business services ($64.4 billion; 12.3 percent). Mining s share of GDP has ranged from 24.2 percent in 08 to 15.1 percent in 03, averaging 18.0 percent from 03 to 14. 6 INDUSTRY SHARES OF HOUSTON GDP 14 Sector $ Billions % GDP Agriculture, Forestry, Fishing 0.452 0.1 Mining 101.068 19.2 Construction 27.789 5.3 Manufacturing 80.495 15.3 Durable goods 28.810 5.5 Nondurable goods 51.684 9.8 Wholesale Trade D D Retail Trade 22.728 4.3 Utilities 18.173 3.5 Transportation and Warehousing D D Information D D Finance, Insurance, Real Estate 62.738 11.9 Finance and insurance 17.292 3.3 Real estate and rental and leasing 45.445 8.6 Professional, Business Services 64.360 12.3 Educational Services, Health Care 23.425 4.5 Educational services 3.230 0.6 Health care and social assistance 20.195 3.8 Arts, Entertainment, Recreation, Accommodation and Food Services 12.888 2.5 Other Services 9.790 1.9 Government 31.841 6.1 Total All Sectors $525.397 100.0 D = Not reported to avoid the disclosure of confidential information. Source: U.S. Bureau of Economic Analysis 5 BEA s estimates are for the Houston-The Woodlands-Sugar Land Metropolitan Statistical Area, which includes Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller counties. The comparison of Houston s economy to global economies is based on International Monetary Fund reports of national GDP. 6 The BEA began releasing detailed data for the mining industry in 03. Therefore, we are unable to assess mining s contribution to Houston GDP prior to 03. October 2015 2015, Greater Houston Partnership Page 7
GROSS DOMESTIC PRODUCT 20 Largest Metro Economies Rank Metro 14 GDP % Change ($ Billions) 13-14* 1 New York 1,558.518 2.4 2 Los Angeles 866.745 2.3 3 Chicago 610.552 1.8 4 Houston 525.397 1.8 5 Dallas-Fort Worth 504.358 8.5 6 Washington, D.C. 471.584 0.3 7 San Francisco 411.969 5.2 8 Philadelphia 391.118 1.1 9 Boston 382.459 2.6 10 Atlanta 324.881 3.0 11 Seattle 300.827 3.4 12 Miami 299.161 3.0 13 Detroit 236.500 2.2 14 Minneapolis 235.733 2.0 15 Phoenix 215.214 1.8 16 San Jose 213.819 6.7 17 San Diego 206.817 1.4 18 Denver 187.111 5.0 19 Baltimore 173.516 1.4 20 Portland 159.328 4.3 * Net of inflation Source: U.S. Bureau of Economic Analysis Houston s economy grew 1.8 percent (net of inflation) in 14, a slowdown from the 6.5 percent growth recorded in 13. That was also the smallest increase since 10, when GDP grew 1.1 percent. The slow growth reported for 14 is surprising, given that the drop in oil prices did not occur until the latter half of 14 and job losses were not posted until early in 15. The BEA also revised Houston s 13 GDP down $2.2 billion from $517.4 billion In contrast, the BEA revised the Dallas metro s 13 GDP up $13.7 billion to $461.3 billion. Of the top 20 metro economies, Dallas posted the fastest growth in 14, 8.5 percent, and overtook Washington, D.C. to become the fifth largest metro economy. The reasons for the revisions were not explained in the September data release, but the BEA stated that more information would be available in the October issue of its monthly journal, the Survey of Current Business. Partnership to Host Annual Economic Outlook Plan to attend the Greater Houston Partnership s 2016 Economic Outlook, scheduled for Monday, December 7, at the Hyatt Regency Houston, 1200 Louisiana. The event features a panel of experts discussing the outlook for energy, health care, real estate, construction and professional services in the coming year. The Partnership s employment forecast for 2016 will be presented. And Anthony Chan, chief economist for JP Morgan Chase, will be the luncheon keynote speaker. He will provide the U.S. and global outlooks. Two publications, the 2016 Employment Forecast and Houston Economic Highlights, a 10-year review of local economic and demographic trends, will also be distributed at the event. Tickets go on sale October 15. Additional details about the event and how to purchase tickets will be posted at the Partnership s website, www.houston.org, starting October 15. October 2015 2015, Greater Houston Partnership Page 8
SNAPSHOT HOUSTON S KEY ECONOMIC INDICATORS Building Permits City of Houston building permits totaled $5.5 billion for the first eight months of the year, down 3.1 percent from $5.6 billion in the same period last year, according to the City s Department of Public Works & Engineering Planning & Development Services. Despite the decline from the previous year, permitting activity in 15 has benefited from strong momentum and is the second-highest August YTD total since the Partnership began tracking City of Houston building permits in 02. Inflation The cost of consumer goods and services as measured by the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent nationwide from July 14 to July 15, according to data released by the U.S. Bureau of Labor Statistics. Core inflation (all items less the volatile food and energy categories) rose 1.8 percent over the 12 months. Home Sales Houston realtors sold 8,836 single-family homes, townhomes, condos, duplexes, county homes, high rise units and lots in August, according to the Houston Association of REALTORS. That s essentially flat compared to the 8,838 units sold last August. Year to date, area realtors have recorded 61,382 closings, off 0.3 percent from last year s YTD total of 61,591. However, the 51,233 single-family closings to date are 0.7 percent ahead of last year s YTD total of 50,889 closings. Purchasing Managers Index The Houston Purchasing Managers Index (PMI), a shortterm leading indicator for regional production, registered 47.3 in August, down from 49.1 in July according to the latest report from the Institute for Supply Management-Houston (ISM-Houston). With the August reading, the Houston PMI has fallen below the neutral point of 50 for eight consecutive months. Vehicle Sales Houston-area auto dealers sold 30,588 vehicles in August 15, down 0.3 percent from the 30,677 sold in August 14. Year-to-date sales volumes, down as much as 10.6 percent in March, have nearly recovered from doldrums of the first quarter. Through the first eight months of this year, dealers sold 255,154 vehicles, off only 0.5 percent from the 256,368 vehicles sold in the same period last year, according to TexAuto Facts, published by InfoNation, Inc. of Sugar Land. Patrick Jankowski and Jenny Philip Contributed to this issue of Houston: The Economy at a Glance October 2015 2015, Greater Houston Partnership Page 9
Stay Up to Date! To access past issues of Economy at a Glance, please click here. If you are a nonmember and would like to receive this electronic publication, please email your request for Economy at a Glance to echambers@houston.org. Include your name, title and phone number and your company s name and address. For information about joining the Greater Houston Partnership, call Member Services at 713-844-3683. The Key Economic Indicators table is updated whenever any data change typically, 11 or so times per month. If you would like to receive these updates by email, usually accompanied by commentary, please email your request for Key Economic Indicators to echambers@houston.org with the same identifying information. You may request Glance and Indicators in the same email. October 2015 2015, Greater Houston Partnership Page 10
HOUSTON MSA NONFARM PAYROLL EMPLOYMENT (000) Change from % Change from Aug '15 Jul '15 Aug '14 Jul '15 Aug '14 Jul '15 Aug '14 Total Nonfarm Payroll Jobs 2,970.4 2,982.2 2,932.0-11.8 38.4-0.4 1.3 Total Private 2,609.4 2,615.2 2,578.3-5.8 31.1-0.2 1.2 Goods Producing 559.5 562.7 575.4-3.2-15.9-0.6-2.8 Service Providing 2,420.6 2,428.9 2,350.4-8.3 70.2-0.3 3.0 Private Service Providing 2,053.8 2,048.3 1,990.8 5.5 63.0 0.3 3.2 Mining and Logging 110.0 110.5 111.7-0.5-1.7-0.5-1.5 Oil & Gas Extraction 55.4 55.7 55.5-0.3-0.1-0.5-0.2 Support Activities for Mining 53.3 53.5 54.9-0.2-1.6-0.4-2.9 Construction 203.0 203.4 206.7-0.4-3.7-0.2-1.8 Manufacturing 246.5 248.8 257.0-2.3-10.5-0.9-4.1 Durable Goods Manufacturing 164.9 167.2 176.5-2.3-11.6-1.4-6.6 Nondurable Goods Manufacturing 81.6 81.6 80.5 0.0 1.1 0.0 1.4 Wholesale Trade 169.3 169.4 170.7-0.1-1.4-0.1-0.8 Retail Trade 305.5 305.5 296.5 0.0 9.0 0.0 3.0 Transportation, Warehousing and Utilities 133.9 133.9 135.1 0.0-1.2 0.0-0.9 Utilities 16.0 16.1 15.9-0.1 0.1-0.6 0.6 Air Transportation 20.4 20.4 20.6 0.0-0.2 0.0-1.0 Truck Transportation 26.0 25.9 25.3 0.1 0.7 0.4 2.8 Pipeline Transportation 10.8 10.6 10.5 0.2 0.3 1.9 2.9 Information 34.0 34.1 32.9-0.1 1.1-0.3 3.3 Telecommunications 15.1 15.1 15.1 0.0 0.0 0.0 0.0 Finance & Insurance 93.0 93.6 94.4-0.6-1.4-0.6-1.5 Real Estate & Rental and Leasing 51.7 52.3 54.9-0.6-3.2-1.1-5.8 Professional & Business Services 479.2 481.7 471.5-2.5 7.7-0.5 1.6 Professional, Scientific & Technical Services 223.0 225.9 219.3-2.9 3.7-1.3 1.7 Legal Services 25.1 25.3 24.1-0.2 1.0-0.8 4.1 Accounting, Tax Preparation, Bookkeeping 23.0 22.9 21.9 0.1 1.1 0.4 5.0 Architectural, Engineering & Related Services 73.5 75.2 74.8-1.7-1.3-2.3-1.7 Computer Systems Design & Related Services 33.1 33.3 33.1-0.2 0.0-0.6 0.0 Admin & Support/Waste Mgt & Remediation 222.9 222.2 217.6 0.7 5.3 0.3 2.4 Administrative & Support Services 211.8 211.2 206.9 0.6 4.9 0.3 2.4 Employment Services 80.6 80.0 83.4 0.6-2.8 0.7-3.4 Educational Services 53.1 52.3 52.3 0.8 0.8 1.5 1.5 Health Care & Social Assistance 311.8 311.7 300.0 0.1 11.8 0.0 3.9 Arts, Entertainment & Recreation 33.8 34.7 32.5-0.9 1.3-2.6 4.0 Accommodation & Food Services 278.1 277.4 257.6 0.7 20.5 0.3 8.0 Other Services 106.5 105.9 104.5 0.6 2.0 0.6 1.9 Government 361.0 367.0 353.7-6.0 7.3-1.6 2.1 Federal Government 27.8 28.1 27.6-0.3 0.2-1.1 0.7 State Government 69.8 69.9 69.6-0.1 0.2-0.1 0.3 State Government Educational Services 37.3 37.3 37.0 0.0 0.3 0.0 0.8 Local Government 263.4 269.0 256.5-5.6 6.9-2.1 2.7 Local Government Educational Services 174.8 180.3 170.2-5.5 4.6-3.1 2.7 SOURCE: Texas Workforce Commission October 2015 2015, Greater Houston Partnership Page 11
Houston Economic Indicators A Service of the Greater Houston Partnership MONTHLY DATA YEAR-TO-DATE TOTAL or YTD AVERAGE* Most Year % Most Year % Month Recent Earlier Change Recent Earlier Change ENERGY U.S. Active Rotary Rigs Sept '15 848 1,930-56.1 1,059 * 1,845 * -42.6 Spot Crude Oil Price ($/bbl, West Texas Intermediate) Sept '15 45.26 93.37-51.5 51.09 * 100.08 * -49.0 Spot Natural Gas ($/MMBtu, Henry Hub) Sept '15 2.66 3.89-31.6 2.79 * 4.47 * -37.6 UTILITIES AND PRODUCTION Houston Purchasing Managers Index Aug '15 47.3 55.6-14.9 46.8 * 57.0 * -17.9 Nonresidential Electric Current Sales (Mwh, CNP Service Area) Aug '15 5,184,990 5,025,459 3.2 37,339,247 35,251,932 5.9 CONSTRUCTION Total Building Contracts ($, Houston MSA) Aug '15 1,196,707,000 3,914,003,000-69.4 11,342,143,000 26,536,158,000-57.3 Nonresidential Aug '15 408,152,000 2,902,865,000-85.9 4,491,754,000 19,651,597,000-77.1 Residential Aug '15 788,555,000 1,011,138,000-22.0 6,850,389,000 6,884,561,000-0.5 Building Permits ($, City of Houston) Aug '15 615,000,608 695,960,968-11.6 5,459,252,302 5,634,859,690-3.1 Nonresidential Aug '15 390,417,722 370,587,621 5.4 3,481,194,433 3,692,023,223-5.7 New Nonresidential Aug '15 227,753,872 88,272,884 158.0 1,787,125,207 2,044,636,168-12.6 Nonresidential Additions/Alterations/Conversions Aug '15 162,663,850 282,314,737-42.4 1,694,069,226 1,647,387,055 2.8 Residential Aug '15 224,582,886 325,373,347-31.0 1,978,057,869 1,942,836,467 1.8 New Residential Aug '15 180,377,993 302,815,828-40.4 1,780,598,080 1,740,783,387 2.3 Residential Additions/Alterations/Conversions Aug '15 44,204,893 22,557,519 96.0 197,459,789 202,053,080-2.3 Multiple Listing Service (MLS) Activity Property Sales Aug '15 8,836 8,838 0.0 61,382 61,382 0.0 Median Sales Price - SF Detached Aug '15 215,100 205,000 4.9 211,838 * 196,561 * 7.8 Active Listings Aug '15 34,089 29,574 15.3 30,353 * 28,736 * 5.6 EMPLOYMENT (Houston-Sugar Land-Baytown MSA) Nonfarm Payroll Employment Aug '15 2,970,400 2,932,000 1.3 2,972,800 * 2,901,225 * 2.5 Goods Producing (Natural Resources/Mining/Const/Mfg) Aug '15 559,500 575,400-2.8 567,338 0 562,950 * 0.8 Service Providing Aug '15 2,410,900 2,356,600 2.3 2,405,463 0 2,338,275 * 2.9 Unemployment Rate (%) - Not Seasonally Adjusted Houston-Sugar Land-Baytown MSA Aug '15 4.6 5.1 4.4 * 5.3 * Texas Aug '15 4.4 5.3 4.3 * 5.4 * U.S. Aug '15 5.2 6.3 5.5 * 6.5 * TRANSPORTATION Port of Houston Authority Shipments (Short Tons) Aug '15 3,507,519 4,121,463-14.9 31,730,458 31,319,476 1.3 Air Passengers (Houston Airport System) Jul '15 5,333,311 5,036,899 5.9 31,977,087 31,063,265 2.9 Domestic Passengers Jul '15 4,180,674 4,022,231 3.9 25,697,028 25,120,382 2.3 International Passengers Jul '15 1,152,637 1,014,668 13.6 6,280,059 5,942,883 5.7 Landings and Takeoffs Jul '15 71,607 71,490 0.2 468,746 475,933-1.5 Air Freight (metric tons) Jul '15 33,790 39,032-13.4 242,978 249,489-2.6 Enplaned Jul '15 17,468 20,176-13.4 126,395 131,731-4.1 Deplaned Jul '15 16,322 18,856-13.4 116,582 117,757-1.0 CONSUMERS New Car and Truck Sales (Units, Houston MSA) Aug '15 30,588 30,677-0.3 255,154 256,368-0.5 Cars Aug '15 12,058 12,742-5.4 104,243 108,127-3.6 Trucks, SUVs and Commercials Aug '15 18,530 17,935 3.3 150,911 148,241 1.8 Total Retail Sales ($000,000, Houston MSA, NAICS Basis) 4Q14 34,260 37,618-8.9 123 116 5.6 Consumer Price Index for All Urban Consumers ('82-'84=100) Houston-Galveston-Brazoria CMSA Aug '15 214.652 214.102 0.3 212.662 * 213.188 * -0.2 United States Aug '15 238.316 237.852 0.2 236.820 * 236.801 * 0.0 Hotel Performance (Houston MSA) Occupancy (%) 4Q14 68.1 65.9 71.8 * 69.1 * Average Room Rate ($) 4Q14 106.52 101.26 5.2 106.87 * 101.19 * 5.6 Revenue Per Available Room ($) 4Q14 72.49 66.77 8.6 76.76 * 69.92 * 9.8 October 2015 2015, Greater Houston Partnership Page 12
Sources Rig Count Baker Hughes Incorporated Spot WTI, Spot Natural Gas U.S. Energy Information Admin. 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 Aviation Car and Truck Sales Retail Sales Consumer Price Index Hotels Postings, Foreclosures Port of Houston Authority Aviation Department, City of Houston TexAuto Facts Report, InfoNation, Inc., Sugar Land TX Texas Comptroller s Office U.S. Bureau of Labor Statistics PKF Consulting/HospitalityAsset Advisors International Foreclosure Information &Listing Service October 2015 2015, Greater Houston Partnership Page 13
Goods-Producing Jobs (000s) Service-Providing Jobs (000s) Nonfarm Payroll Employment (000) 12-Month Change (000) HOUSTON THE ECONOMY AT A GLANCE Nonfarm Payroll Employment, Houston MSA 3,100 3,000 2,900 2,800 2,700 2,600 2,500 2,400 2,300 2,200 2,100 150 120 90 60 30 0-30 -60-90 -120 2,000 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 12-Month Change Total Payroll Employment Source: Texas Workforce Commission -150 620 Goods-Producing and Service-Providing Employment Houston MSA 2,500 580 2,400 2,300 540 2,200 500 2,100 2,000 460 1,900 420 1,800 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 Goods-Producing Jobs Service-Providing Jobs Source: Texas Workforce Commission October 2015 2015, Greater Houston Partnership Page 14
WTI, $ barrel Natural Gas, $ /mcf % Civilian Labor Force HOUSTON THE ECONOMY AT A GLANCE 11 Unemployment Rate - Houston, Texas and U.S. 10 9 8 7 6 5 4 3 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 Source: Texas Workforce Commission Houston Texas U.S. 160 Spot Crude and Natural Gas Prices Monthly Averages 16 140 14 120 12 100 10 80 8 60 6 40 4 20 2 0 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 WTI Natural Gas Source: U.S. Energy Information Administration 0 October 2015 2015, Greater Houston Partnership Page 15