patrick jankowski · 2017-05-10 · 4-qtr moving total, ’06 constant $ salaries & wages paid...
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Houston Economic Outlook
Patrick Jankowski
www.houston.org
Follow me on Twitter @pnjankowski
May 22
10:30 a.m.
Hilton Post Oak
5
It’s not Christmas but . . .
6
It’s not Christmas but . . .
Population Estimates
Revised Employment Data
7
Rank Metro Area Population as of 7/1/16 Change since 7/1/15
1 New York 20,153,634 35,571
2 Los Angeles 13,310,447 41,619
3 Chicago 9,512,999 (19,570)
4 Dallas-Fort Worth 7,233,323 143,435
5 Houston 6,772,470 125,005
6 Washington, D.C. 6,131,977 53,508
7 Philadelphia 6,070,500 8,197
8 Miami 6,066,387 64,670
9 Atlanta 5,789,700 90,650
10 Boston 4,794,447 27,692
Source: U.S. Census Bureau
10 Most Populous Metro Areas
8
Births 102,152
Deaths -40,536
Natural Increase 61,616
Net International1 35,000
Net Domestic +28,090
Net In-Migration 63,090
Total2 125,0051 Includes U.S. and foreign-born populations.2 Does not sum due to rounding and other effects.
Source: U.S. Census Bureau
Components of Growth, 7/15 – 7/16
9
Births 102,152
Deaths -40,536
Net Natural Increase 61,616
In-Migration
International 35,000
Domestic 28,090
In-Migration 63,090
Total2 125,0051 Includes U.S. and foreign-born populations.2 Does not sum due to rounding and other effects.
Source: U.S. Census Bureau
Components of Growth, 7/15 – 7/16
10
Births 102,152
Deaths -40,536
Natural Increase 61,616
In-Migration
International 35,000
Domestic 28,090
In-Migration 63,090
Total2 125,0051 Includes U.S. and foreign-born populations.2 Does not sum due to rounding and other effects.
Source: U.S. Census Bureau
Components of Growth, 7/15 – 7/16
11
Metro Area Net Growth
Houston 851,971
Dallas-Fort Worth 807,082
New York 587,163
Atlanta 502,975
Miami 500,089
Washington 495,561
Los Angeles 481,486
Boston 241,852
Philadelphia 104,838
Chicago 51,449
Long-Term Growth, 7/10 – 7/16
Current Metro Populations
Baton Rouge, LA = 835,175
New Haven, CT = 856,875
12
Metro Area---------- Net Migration ----------
Total International Domestic
Houston 476,857 193,618 283,239
Dallas-Fort Worth 444,944 140,476 304,468
New York -53,912 848,704 -902,616
Atlanta 257,589 104,223 153,366
Miami 374,706 381,468 -6,762
Washington 199,276 245,540 -46,264
Los Angeles -57,111 315,879 -372,990
Boston 145,718 182,201 -36,483
Philadelphia -4,729 123,139 -127,868
Chicago -260,662 148,505 -409,167
Components of Growth, 7/10 – 7/16
13
Metro Area Net Change Vital Events Net Migration
Houston 851,971 372,983 476,857
Dallas-Fort Worth 807,082 357,825 444,944
New York 587,163 671,717 -53,912
Atlanta 502,975 241,489 257,589
Miami 500,089 120,947 374,706
Washington 495,561 297,395 199,276
Los Angeles 481,486 554,435 -57,111
Boston 241,852 103,093 145,718
Philadelphia 104,838 115,420 -4,729
Chicago 51,449 321,530 -260,662
Components of Growth, 7/10 – 7/16
Vital Events = Births minus Deaths
14
Payroll Employment
91.0
21.3
-110.5
50.3
83.1
118.8
90.4
118.2
0.2
18.7
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Houston Job Growth, Dec – Dec (000s)
Source: Texas Workforce Commission
118.2
0.2
18.7
'14 '15 '16
Houston Job Growth, Dec – Dec (000s)
Source: Texas Workforce Commission
SectorJobs Lost
Dec ’14 – Dec ’16 %
Exploration & Production -11,000 -18.7%
Oil Field Services -19,900 -35.6
Fabricated Metal Products -18,700 -28.2
Machinery Manufacturing 20,600 -30.4
Engineering -10,900 -14.3
Total Losses -81,100 -25.5%Source: Texas Workforce Commission
17
Energy Losses
SectorJobs Gained
Dec ’14 – Dec ’16%
Leisure & Hospitality 25,800 9.0%
Health Care 23,000 7.5
Public Education (state & local) 17,000 6.9
Retail Trade 10,900 3.5
Financial Activities 6,000 4.0
Total Gains +82,700
Source: Texas Workforce Commission
18
Non-Energy Gains
-80
-60
-40
-20
0
20
40
60
80
100
120
140
Jan '14 Jul '14 Jan '15 Jul '15 Jan '16 Jul '16 Jan '17 Jul '17
Job
s (
00
0s)
Source: U.S. Bureau of Labor Statistics
12-Month Running Totals
Energy Jobs Total Jobs Non-Energy Jobs
19
Metro Houston Employment
Winners $ Wages
Leisure & Hospitality $22,800
Health Care 54,800
Public Education (state & local) 47,800
Retail Trade 32,400
Financial Activities 89,100
20
Average Annual Wage
Source: Texas Workforce Commission
Losers $ Wages
Exploration & Production $192,000
Oil Field Services 121,000
Fabricated Metal Products 71,700
Machinery Manufacturing 95,524
Engineering 106,000
Biggest Winners and Losers
$188.4 $186.7
$100
$125
$150
$175
$200
Q1/10 Q1/11 Q1/12 Q1/13 Q1/14 Q1/15 Q1/16 Q1/17
$ B
illio
ns
Source: Quarterly Census of Employment and Wages
4-Qtr Moving Total, ’06 Constant $
Salaries & Wages Paid to Houston Workers
22
The worst is over.
0
20
40
60
80
100
120
Jun '14 Dec '14 Jun '15 Dec '15 Jun '16 Dec '16 Jun '17
$ P
er
Ba
rre
l
Source: U.S. Energy Information Administration
23
NYMEX WTI Spot Price
Feb 11, 2016 $26.19/barrel
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Jun '14 Dec '14 Jun '15 Dec '15 Jun '16 Dec '16 Jun '17
Wo
rkin
g R
igs
Source: Baker Hughes
24
U.S. Rig Count
May 27, 2016 404 Rigs
35
40
45
50
55
60
65
70
'13 '14 '15 '16 '17 '18
Above 50 = Expansion, Below 50 = Contraction
25
Purchasing Managers Index
Source: Institute for Supply Management- Houston
Regional Employment, Net Change
-20
0
20
40
60
80
100
120
140
'14 Mar May Jul Sep Nov '15 Mar May Jul Sep Nov '16 Mar May Jul Sep Nov '17 Mar May
Job
s, 0
00
s
Source: Texas Workforce Commission
12-Month Running Totals
August 2016 - 3,800 jobs
Regional Employment, Net Change
-20
0
20
40
60
80
100
120
140
'14 Mar May Jul Sep Nov '15 Mar May Jul Sep Nov '16 Mar May Jul Sep Nov '17
Job
s, 0
00
s
Source: Texas Workforce Commission
12-Month Running Totals
28
Three sectors to
cut jobs in ’17.
29
Lost Money Earned a Profit
Energy
Still restructuring
No hiring when losing money
- 3,500 jobs
30
5
10
15
20
25
30
35
$ B
illio
ns
Source: Dodge Data and Analytics
12-Month Moving Total
31
Construction Starts, Metro Area
5
10
15
20
25
30
35
$ B
illio
ns
Source: Dodge Data and Analytics
12-Month Moving Total
32
Construction Starts, Metro Area
Petrochem
Office
Industrial
Residential
Health care
Government
33
- 16,000 jobs
Construction Employment
Information
Long-term decline
continues
- 200 jobs
34
35
Where will job
growth come
from?
-100
-50
0
50
100
150
200
250
'81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15
Th
ou
sa
nd
s
Source: U.S. Census Bureau
36
Annual Change, Houston MSA Population
2.8
0.8
3.1
4.0
-1.2
4.0
5.0
2.32.0
2.6
2.0
0.9 0.8
1.4
3.5
2.1
0.7
Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17
Source: U.S. Bureau of Economic Analysis * seasonally and inflation adjusted
% Change from Preceding Quarter*
37
U.S. Gross Domestic Product
0
50
100
150
200
250
300
350
400
Jan '14 Apr '14 Jul '14 Oct '14 Jan '15 Apr '15 Jul '15 Oct '15 Jan '16 Apr '16 Jul '16 Oct '16 Jan '17 Apr '17
Source: U.S. Bureau of Labor Statistics
Jobs Added (000s)
38
U.S. Employment
Growth Forecasts, Year-Over-Year Percent Change
’16 ’17 ’18
Global Economy 3.0% 3.1% 3.3%
Advanced Economies 1.8 2.0 2.3
United States 1.6 2.0 2.3
Eurozone 1.7 1.8 2.0
United Kingdom 1.8 1.8 1.8
Japan 1.0 1.1 0.9
Korea 2.7 2.5 2.6
Developing Economies 4.2 4.1 4.3
China 6.7 6.3 5.8
India 7.8 7.0 7.0
Mexico 2.3 -1.0 1.6
Brazil 3.6 0.7 2.7
Source: Wells Fargo Securities
39
Global Growth Forecasts
Imports
$104.1 Billion
64%
Exports,
$58.1 Billion
36%
’06
40
Houston’s Foreign Trade
Imports
$69.8 Billion
43%
Exports
$93.0 Billion
57%
'16
41
Health Care
0
50
100
150
200
250
300
350
'90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
Source: Texas Workforce Commission
Jobs, 000s
42
Houston Health Care Employment
11.09.7
8.8
7.38.1
7.2 7.6
6.1 6.2
16.9
15.114.0 13.7
12.2
10.6 10.4 10.49.4
Philadelphia New York Minneapolis Los Angeles Phoenix Dallas HOUSTON Atanta Washington
Source: U.S. Bureau of Labor Statistics
'90 '15
43
Health Care as % of Total Employment
44
Health Care
+ 9,800 Jobs
45
Hotels,
Restaurants and
Bars
7,184 7,4648,023 8,082 8,353 8,677 8,950 9,342 9,619 9,939 10,217 10,627
Q2/05 Q2/06 Q2/07 Q2/08 Q2/09 Q2/10 Q2/11 Q2/12 Q2/13 Q2/14 Q2/15 Q2/16
Source: Texas Workforce Commission
Houston Area Bars and Restaurants
46
47
Hotels,
Restaurants and
Bars
+ 8,700 Jobs
48
Government
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
250
270
290
310
330
350
370
390
410
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
Tota
l Em
plo
yme
nt, 0
00
,00
0s
Go
ve
rnm
en
t E
mp
loym
en
t, 0
00
s
Source: Texas Workforce Commission
Government Employment Metro Population
49
Metro Employment
50
Government
+ 6,200 jobs
51
Retail
-7.7
6.3
8.6
5.54.2
1.1
7.5 7.99.6
3.5
-3.7-2.7
-4.9
2.5
8.8
2.1
12.2
0.4
-7.2
6.47.6
8.47.2
4.7 4.32.9
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Source: U.S. Bureau Labor Statistics
Annual Change, 000s
52
Metro Retail Employment
53
Retail
+ 4,500 Jobs
54
Manufacturing
$8.3
$22.7
$5.0$4.0
$3.0$2.0
'16 '17 '18 '19 '20 '21
Source: Institute for Regional Forecasting
Value, Billions
55
Local Chemical Plant Completions
56
Manufacturing
+ 3,000 Jobs
9,800
8,700
6,200
4,9004,500
3,0002,400 2,400 2,200 2,100
1,100 1,100 1,000
57
’17 Metro Employment Forecast
Construction -16,000
Energy -3,500
Information -200
58
’17 Metro Employment Forecast
+ 29,700 Jobs
-8.1
17.6
44.853.2 56.8 52.7
106.292.6
18.0
60.0
1.4
-1.2-11.7
39.3
91.4106.9
91.0
21.3
-110.5
50.3
83.1
118.8
90.4
118.2
0.2
18.729.7
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
December to December, (000s)
Historic Job Growth
Source: Texas Workforce Commission
60
Rules of Thumb, Guestimates and Theorems
61
The Yahtzee Rule for
Measuring Houston
Growth
62
Houston wins when
we roll sixes.
63
Houston wins when
we roll sixes.$60 oil
64
Houston wins when
we roll sixes.$60 oil 60,000 jobs
65
Houston wins when
we roll sixes.$60 oil 60,000 jobs
60,000
relocations
66
Houston wins when
we roll sixes.$60 oil 60,000 jobs
60,000
relocations 60 MPH
67
Thank you
Houston Economic OutlookPatrick Jankowski
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