houston economic update april 2011

8/7/2019 Houston Economic Update April 2011

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April 2011 ©2011, Greater Houston Partnership

A publication of the Greater Houston Partnership Volume 20, Number 4 April 2011

Recovery Well Underway — The recovery is further along in Houston, and lastyear proved to be stronger than previously thought. The 10-county Houston metroarea added 46,300 jobs last year, up from the previous estimates of 13,100 jobs.Job growth occurred in nine of 11 sectors, with the largest percentage gainsoccurring in natural resources and mining, professional and business services, andeducational and health services. The data suggest that Houston has recovered half of all jobs lost during the recession.

The new insights into Houston’s economy come from the benchmark revisions tothe employment data issued every March by the Texas Workforce Commission(TWC). The employment estimates released throughout the year are based on asample survey of area employers. Starting in the fall, TWC revises the job numbersbased on data available from unemployment insurance accounts. In revising thedata, TWC looked back over the previous 21 months. TWC “re-benchmarked” thedata back to March ’09. In some cases, the revisions were minor, in others, therevisions were significant.

Key revisions:

The goods producing sector added 9,200 jobs, 3,000 more jobs thanpreviously estimated.

The service sector added 37,100 jobs, up 30,200 jobs from the previousestimate.

Natural resources and mining added 5,700 jobs, an upward revision of 1,200jobs. The oil and gas industry continues to grow as it looks for opportunitiesoutside the Gulf of Mexico.

Construction added 1,800 jobs, a reverse from the original estimate of 1,700

jobs lost last year. Recent reports from McGraw-Hill suggest residentialconstruction in the Houston area may have flattened out and commercialconstruction may be picking up.

Though manufacturing was revised downward it remained positive, adding1,700 jobs. Declines in chemicals and refining employment offset gains inmachinery and fabricated metal products.



HOUSTON—THE ECONOMY AT A GLANCE


Trade, transportation and utilities added 7,800 jobs, a reversal from theoriginal estimate of 1,900 jobs lost . Increased retail sales and port activityhas supported job growth in these areas.

The decline that began a decade ago continued in information, with thesector losing 2,200 jobs, 700 more than originally thought.

Finance lost 1,000 jobs, a downward revision of 300 jobs.

Professional and business services added 12,100 jobs, a reverse of the 1,700jobs lost first posted. Legal, account and computer services are allexperiencing growth.

Educational services added 1,500 jobs, up from the 900 originally estimated.

Health care and social assistance added 8,500 jobs, up from 7,500 in theoriginal estimate. This sector remains one of Houston’s strongest, though

employment in hospitals fell by 1,700 jobs last year.

Accommodations and food services added 5,100 jobs, revised upward by1,300.

Other services (i.e. personal services) added 1,000 more jobs than originallythought.

Government services added 4,200 jobs, a reversal of the original estimate of 1,000 jobs lost . Recent layoffs announced by state and local governmentswill not appear in the employment data until later this year.

Since posting revisions to ’09 and ’10 employment data, TWC has releasedemployment estimates for the 12 months ending February ’10— the Houston metroarea has added 50,700 jobs, growing 2.0 percent. This suggests Houston isreturning to normal. In a non-recession/non-boom year, Houston creates 50,000 to60,000 net new jobs.

Houston’s February unemployment rate stood at 8.4 percent, a decrease from 8.8percent the previous month. Texas’ unemployment rate stood at 8.2 percent, downfrom 8.5 percent in January. The U.S. rate was 9.5 percent, down from 9.8 themonth before. (The rates are not seasonally adjusted.)

Unemployment Claims Continue to Decline — The decline in the unem-ployment rates coincides with the decline in claims for unemployment insurance.Initial claims in the 13-county Gulf Coast Workforce Development Area dropped22.4 percent from 20,574 claims in February ’10 to 15,957 in February ’11,Workforce Solutions reports. Initial claims are down 44.5 percent from the most





recent peak of 28,729 in March ’09. Continued claims in February ’11 dropped31.7 percent from 108,345 in February ’10 to 73,995 in February ’11.

Continued claims are down 50.7 percent from the most recent peak of 150,163 inJune ’09. The number of people unemployed 15 weeks or longer in February ’11was down 7.4 percent over the month and 33.3 percent over the year. Thoughinitial claims have trended down over the past few months, there could be anuptick later in the year as government agencies begin to lay off employees as aresult of the on-going budget crises.

Energy Prices, Drilling Activity Up — The Friday closing spot market price forWest Texas Intermediate (WTI)— the U.S. benchmark for light, sweet crude— averaged $102.85 per barrel in March, up 16.3 percent from its average of $88.45in February, the U.S. Energy Information Administration (EIA) reported. WTI hadtraded in the $80-$90 range since last fall, but recently oil prices jumped to morethan $100 a barrel due to turmoil in the Middle East.

Typically, a $10 increase in the price of a barrel of crude oil translates into anincrease of about 24 cents in the retail price of a gallon of gasoline over the courseof about eight weeks, according to EIA. About half of that increase generally takesplace within two weeks. The upward pressure on prices has been somewhat offsetby the impact of the Japanese disaster and expectations of reduced demand, notesthe agency. Barring any other major events, EIA expects no further pressure ongasoline prices due to rising crude prices. However, consumers at the pump shouldexpect to see price increases due to seasonal changes such as the shift from winterto more expensive summer-grade gasoline.

The Friday closing spot market price for Henry Hub natural gas averaged $3.90 permillion British thermal units (MMBtu) in March, down 2.6 percent from $4.00 perMMBtu in February and 7.3 percent below its average of $4.20 in March of lastyear. Natural gas prices trended downward most of last year but appear to havestabilized, averaging $4.12 since the first of the year.

The Baker Hughes count of active domestic rotary rigs averaged 1,720 in March,up 21.3 percent from 1,419 rigs in March of last year, according to data recentlyreleased by the company. Earlier in the year the rig count had appeared to beflattening but the last five weeks have seen an increase in drilling activity. Oil-

directed drilling continues to grow, and gas-directed drilling inched up slightly.Given the ongoing delays in permitting new work offshore in the Gulf of Mexico,particularly in the deepwater, many companies have increased workover activity tooffset production declines from existing fields.





Trade Continues to Grow — Though one month does not make a trend, tradethrough the Houston-Galveston Customs District rose significantly in January thisyear compared to January last year. Seaborne trade totaled 11.1 million metric tonsvalued at $19.5 billion, up from 8.9 million metric tons valued at $13.8 billion lastJanuary. Air freight totaled 15.9 million kilograms valued at $1.5 billion, up from

13.2 million kilograms valued at $1.2 billion last January. Top seabornecommodities shipped by weight included petroleum products, organic chemicals,industrial machinery, iron and steel and plastics. Top airborne commoditiesshipped by weight included industrial machinery, electrical machinery, scientificinstruments, plastics and iron and steel.

In 2010, Houston handled $211.5 billion in total trade, ranking it fourth behind LosAngeles ($348.0 billion), New York ($326.7 billion) and Detroit ($218.4 billion).Laredo ranked sixth ($185.4 billion) and Dallas ranked seventeenth ($56.6 billion).

Hispanics Account for More than Half of Houston’s Growth — The Hispanic

population in the Houston-Sugar Land-Baytown MSA grew by more than 745,000since the last census, according to the U.S. Census Bureau. The Hispanicpopulation growth accounted for more than 60 percent of the region’s populationgains over the past 10 years. The Asian population grew nearly 70 percent, whilethe black population grew 27.4 percent and the white population by 3.8 percent.

Houston-Sugar Land-Baytown Metropolitan Area

Population Change Since ‘00

Race/Ethnicity ‘00 ‘10 Number Percent

Hispanic or Latino 1,353,477 2,099,412 745,935 55.1%

Not Hispanic or Latino: 3,361,930 3,847,388 485,458 14.4%

White 2,274,829 2,360,472 85,643 3.8%

Black/African American 783,955 998,883 214,928 27.4%

Asian 226,308 384,596 158,288 69.9%

Other 18,867 27,895 9,028 47.9%

Two or More Races 57,968 75,542 17,574 30.3%

Total 4,715,407 5,946,800 1,231,393 26.1%

Source: 2010 U.S. Census





The 2010 Census count show that Hispanics now account for one in every threeresidents, up from one in four 10 years ago. Whites now account for two out of every five residents, down from one out of every two in ’00. Blacks still accountfor one in six residents, no change from the previous census. Asians now accountfor one in 15 residents, up from one in 25 a decade ago. Clearly, the region has

become more diverse over the past 10 years.Houston-Sugar Land-Baytown Metropolitan Area

Share of Metro Population

Race/Ethnicity ‘00 ‘10

Hispanic or Latino 28.7% 35.3%

Not Hispanic or Latino: 71.3% 64.7%

White 48.2% 39.7%

Black/African American 16.6% 16.8%

Asian 4.8% 6.5%

Other 0.4% 0.5%

Two or More Races: 1.2% 1.3%

Total 100.0% 100.0%

Source: 2010 U.S. Census

Editor’s Note: Over the past few weeks I have been digging through the data

trying to determine how well Houston rode out the recession, why the U.S.recovery has been so slow to recover, and how long will it take before Houston andthe U.S. fully recovers. I have packaged my research into a presentation entitled“Outlook for the Houston & US Economy: Recovery Underway,” which I will

present next Thursday, April 7th, in the offices of the GHP.

My presentation starts at 8 a.m. in the GHP Board Room. There is a $10 fee toattend, which covers the cost of the light breakfast fare that will be served. If youare interested in attending, you can sign up at the Events section of the GHPwebsite. I hope to see you April 7th.

Patrick JankowskiVP Research, GHP

http://www.houston.org/greater-houston-partnership/events/









Patrick Jankowski, Marycruz García andJenny Hsu contributed to this issue of

The Economy at a Glance.

___________________________________

The Greater Houston Partnership is the primary advocate of Houston’s business community

and is dedicated to building regional economic prosperity.

Visit the Greater Houston Partnership on the World Wide Web at www.houston.org. Contact us by phone at 713-844-3600.

http://www.houston.org/








Houston Economic Indicators

A Service of the Greater Houston Partnership

Most Year % Most Year %

Month Recent Earlier Change Recent Earlier Change

ENERGY

U.S. Active Rotary Rigs Mar '11 1,720 1,419 21.3 1,716 * 1,345 * 27.6

Spot Crude Oil Price ($/bbl, Wes t Texas Intermediate) Mar '11 102.86 80.77 27.3 93.43 * 77.97 * 19.8

Spot Natural Gas ($/MMBtu, Henry Hub) Mar '11 3.90 4.21 -7.3 4.12 * 5.08 * -18.9

UTILITIES AND PRODUCTION

Houston Purchasing Managers Index Feb '11 59.6 53.3 11.8 58.9 * 53.3 * 10.5

Nonresidential Electr ic Current Sales (Mwh, CNP Service Area) Feb '11 3,838,333 3,663,765 4.8 7,890,337 7,634,848 3.3

CONSTRUCTION

Total Building Contracts ($ , Houston MSA) Jan '11 675 ,521 ,000 586 ,471,000 15 .2 675 ,521 ,000 586,471 ,000 15.2

Nonresidential Jan '11 365,426,000 221,516,000 65.0 365,426,000 221,516,000 65.0

Residential Jan '11 310,095,000 364,955,000 -15.0 310,095,000 364,955,000 -15.0

Building Permits ($, City of Houston) Feb '11 207,259,860 204,433,159 1.4 412,976,235 426,994,770 -3.3

Nonresidential Feb '11 128,803,399 121,190,524 6.3 277,210,051 264,571,866 4.8

New Nonresidential Feb '11 34,408,046 47,440,465 -27.5 93,223,153 96,181,754 -3.1

Nonresiden tial Add itions/Al tera tions/Conversions Feb '11 94,395,353 73 ,750 ,059 28.0 183,986,898 168,390,112 9 .3

Residential Feb '11 78,456,461 83,242,635 -5.7 135,766,184 162,422,904 -16.4

New Residential Feb '11 64,890,112 52,646,711 23.3 108,217,370 116,950,378 -7.5

Residential Additi ons/Alterations/Conversions Feb '11 13,566,349 30,595,924 -55.7 27,548,814 45,472,526 -39.4

Multiple Listing Service (MLS) ActivityClosings Feb '11 3,906 3,923 -0.4 7,345 7,041 4.3

Median Sales Price - SF Detached Feb '11 151,900 146,200 3.9 151,996 * 144,880 * 4.9

Active Listings Feb '11 49,839 46,658 6.8 49,681 * 45,934 * 8.2

EMPLOYMENT (Houston-Sugar Land-Baytown MSA)

Nonfarm Payroll Employment Feb '11 2 ,541,000 2,490,300 2 .0 2 ,536,200 * 2 ,483 ,000 * 2.1

Goods Producing (Natural Res ources /Mining/Cons t/Mfg) Feb '11 475,600 464,000 2.5 474,900 * 464,000 * 2.3

Service Providing Feb '11 2,065,400 2,026,300 1.9 2,061,300 * 2,019,000 * 2.1

Unemployment Rate (%) - Not Seasonally Adjusted

Houston-Sugar Land-Baytown MSA Feb '11 8.4 8.6 8.6 * 8.7 *

Texas Feb '11 8.2 8.4 8.4 * 8.5 *

U.S. Feb '11 9.5 10.4 9.7 * 10.5 *

Unemployment Insurance Claims (Gulf Coast WDA)

Initial Claims Feb '11 15,957 20,574 -22.4 19,033 * 22,233 * -14.4

Continuing Claims Feb '11 73,995 108,345 -31.7 81,230 * 116,406 * -30.2

TRANSPORTATION

Port of Houston Authority Shipments (Short Tons) Dec '10 3 ,473,295 2,981,289 16 .5 40 ,247,841 36 ,787 ,204 9.4

Air Passengers (Houston Airport System) Jan '11 3,890,106 3,758,226 3.5 3,890,106 3,358,226 15.8

Domestic Passengers Jan '11 3,136,417 3,057,743 2.6 3,136,417 2,657,743 18.0

International Passengers Jan '11 753,689 700,483 7.6 753,689 700,483 7.6

Landings and Takeoffs Jan '11 70,015 71,851 -2.6 70,015 71,851 -2.6

Air Freight (000 lb) Jan '11 68,533 64,106 6.9 68,533 64,106 6.9

Enplaned Jan '11 35,470 34,277 3.5 35,470 34,277 3.5

Deplaned Jan '11 33,063 29,829 10.8 33,063 29,829 10.8

CONSUMERS

New Car and Truck Sales (Units, Houston MSA) Feb '11 18,110 16,227 11.6 40,578 39,901 1.7

Cars Feb '11 7,720 7,584 1.8 17,232 18,298 -5.8

Trucks, SUVs and Commercials Feb '11 10,390 8,643 20.2 23,346 21,603 8.1

Total Retail Sales ($000,000, Houston MSA, NAICS Basis) 3Q10 22,150 21,282 4.1 67,230 61,116 10.0

Consumer Price Index for All Urban Consumers ('82-'84=100)

Houston-Galveston-Brazoria CMSA Feb '11 197.224 192.412 2.5 196.538 * 192.042 * 2.3

United States Feb '11 221.309 216.741 2.1 220.766 * 216.714 * 1.9

Hotel Performance (Harris County)Occupancy (%) 3Q10 54.4 52.4 56.3 * 57.6 *

Average Room Rate ($) 3Q10 88.63 90.64 -2.2 92.60 * 97.10 * -4.6

Revenue Per Available Room ($) 3Q10 48.24 47.47 1.6 52.10 * 56.10 * -7.1

POSTINGS AND FORECLOSURES

Postings (Harris County) Mar '11 3,986 3,947 1.0 12,602 11,692 7.8

Foreclosures (Harris County) Mar '11 878 1,111 -21.0 2,462 3,410 -27.8

YEAR-TO-DATE

TOTAL OR AVERAGE*MONTHLY DATA





SourcesRig Count Baker Hughes IncorporatedSpot WTI, Spot Natural Gas U.S. Energy Information AgencyHouston Purchasing Managers National Association ofIndex Purchasing Management –

Houston, Inc.Electricity CenterPoint EnergyBuilding Construction Contracts McGraw-Hill ConstructionCity of Houston Building Permits Building Permit Department, City

of HoustonMLS Data Houston Association of Realtors Employment, Unemployment Texas Workforce Commission

Port Shipments Port of Houston AuthorityAviation Aviation Department, City of

HoustonCar and Truck Sales TexAuto Facts Report , InfoNation,

Inc., Sugar Land TXRetail Sales Texas Comptroller’s Office Consumer Price Index U.S. Bureau of Labor StatisticsHotels PKF Consulting/Hospitality Asset

Advisors InternationalPostings, Foreclosures Foreclosure Information & Listing

Service

STAY UP TO DATE!

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The foregoing table is updated whenever any data change — typically, 11 or so times per month. Ifyou would like to receive those updates by e-mail, usually accompanied by commentary, please e-maiyour request for Key Economic Indicators to [email protected] with the same identifying infor-mation.

You may request Glance and Indicators in the same e-mail.

mailto:[email protected]











HOUSTON MSA NONFARM PAYROLL EMPLOYMENT (000) Change from % Change from

Feb ' 11 Jan '11 Feb '10 Jan '11 Feb '10 Jan '11 Feb '10

Total Nonfarm Payroll Jobs 2,541.0 2,531.4 2,490.3 9.6 50.7 0.4 2.0

Total Private 2,155.3 2,149.7 2,109.0 5.6 46.3 0.3 2.2

Goods Producing 475.6 474.2 464.0 1.4 11.6 0.3 2.5

Service Providing 2,065.4 2,057.2 2,026.3 8.2 39.1 0.4 1.9

Private Service Providing 1,679.7 1,675.5 1,645.0 4.2 34.7 0.3 2.1

Mining and Logging 84.0 83.5 77.9 0.5 6.1 0.6 7.8

Oil & Gas Extraction 47.0 46.7 45.4 0.3 1.6 0.6 3.5

Support Activities for Mining 36.0 35.7 31.5 0.3 4.5 0.8 14.3

Construction 171.9 171.7 169.8 0.2 2.1 0.1 1.2

Manufacturing 219.7 219.0 216.3 0.7 3.4 0.3 1.6

Durable Goods Manufacturing 142.3 142.2 137.6 0.1 4.7 0.1 3.4

Nondurable Goods Manufacturing 77.4 76.8 78.7 0.6 -1.3 0.8 -1.7

Wholesale Trade 131.7 130.8 129.9 0.9 1.8 0.7 1.4

Retail Trade 260.4 262.6 256.1 -2.2 4.3 -0.8 1.7

Transportation, Warehousing and Utilities 123.7 123.5 120.7 0.2 3.0 0.2 2.5

Utilities 16.2 16.2 16.0 0.0 0.2 0.0 1.3

Air Transportation 23.6 23.6 24.3 0.0 -0.7 0.0 -2.9

Truck Transportation 20.6 20.3 19.2 0.3 1.4 1.5 7.3

Pipeline Transportation 10.2 10.2 10.0 0.0 0.2 0.0 2.0

Balance, incl Warehousing, Water & Rail Transport 53.1 53.2 51.2 -0.1 1.9 -0.2 3.7

Information 30.6 30.7 32.4 -0.1 -1.8 -0.3 -5.6

Telecommunications 15.5 15.6 16.7 -0.1 -1.2 -0.6 -7.2

Finance & Insurance 87.5 87.0 86.8 0.5 0.7 0.6 0.8

Real Estate & Rental and Leasing 47.1 47.1 48.7 0.0 -1.6 0.0 -3.3

Professional & Business Services 359.0 360.0 349.7 -1.0 9.3 -0.3 2.7

Professional, Scientific & Technical Services 174.7 175.0 174.9 -0.3 -0.2 -0.2 -0.1

Legal Services 22.5 22.5 22.5 0.0 0.0 0.0 0.0

Accounting, Tax Preparation, Bookkeeping 19.0 18.8 20.8 0.2 -1.8 1.1 -8.7

Architectural, Engineering & Related Services 57.0 57.6 58.0 -0.6 -1.0 -1.0 -1.7Computer Systems Design & Related Services 25.3 25.2 24.1 0.1 1.2 0.4 5.0

Admin & Support/Waste Mgt & Remediation 165.7 164.4 155.5 1.3 10.2 0.8 6.6

Administrative & Support Services 157.4 156.2 147.7 1.2 9.7 0.8 6.6

Employment Services 57.7 56.8 49.2 0.9 8.5 1.6 17.3

Educational Services 43.7 43.0 42.3 0.7 1.4 1.6 3.3

Health Care & Social Assistance 270.4 268.8 261.5 1.6 8.9 0.6 3.4

Arts, Entertainment & Recreation 24.9 24.5 25.3 0.4 -0.4 1.6 -1.6

Accommodation & Food Services 208.1 205.6 201.1 2.5 7.0 1.2 3.5

Other Services 92.6 91.9 90.5 0.7 2.1 0.8 2.3

Government 385.7 381.7 381.3 4.0 4.4 1.0 1.2

Federal Government 27.8 27.7 28.6 0.1 -0.8 0.4 -2.8State Government 72.1 71.3 71.3 0.8 0.8 1.1 1.1

State Government Educational Services 38.0 37.4 37.6 0.6 0.4 1.6 1.1

Local Government 285.8 282.7 281.4 3.1 4.4 1.1 1.6

Local Government Educational Services 200.0 196.9 196.5 3.1 3.5 1.6 1.8

SOURCE: Texas Workforce Commission





Source: Institute for Supply Management - Houston, Inc.

Source: Texas Workforce Commission

30

35

40

45

50

55

60

65

70

Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

PURCHASING MANAGERS INDEXHOUSTON & U.S. 2002-2012

HOU ST ON U. S.

-120

-100

-80

-60

-40

-20

0

20

40

60

80

100

120

140

160

1.95

2.00

2.05

2.10

2.15

2.20

2.25

2.30

2.35

2.40

2.45

2.50

2.55

2.60

2.65


12-MONTH CHANGE (000)

NONFA

RM PAYROLL EMPLOYMENT (000,000)

HOUSTON MSA EMPLOYMENT2002-2012

12-M ON TH C HAN GE JOB S







1.60

1.65

1.70

1.75

1.80

1.85

1.90

1.95

2.00

2.05

2.10

2.15

2.20

2.25

430

440

450

460

470

480

490

500

510

520

530

540

550


SERVICE-PROVIDING (000,000)

GOODS-PRODUCING (000)

GOODS-PRODUCING AND SERVICE-PROVIDING EMPLOYMENTHOUSTON MSA 2002-2012

GOOD S-PR ODUC ING JOBS SER VI CE-PROVI DI NG JOBS

0

1

2

3

4

5

6

7

8

9

10

11

Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

PERCENT OF LABOR FORCE

UNEMPLOYMENT RATEHOUSTON & U.S. 2002-2012

HOUSTON U.S.





Source: U.S. Energy Information Administration

Source: U.S. Bureau of Labor Statistics

0

4

8

12

16

20

24

28

0

20

40

60

80

100

120

140


HENRY HUB NATURAL GAS ($/MMBTU)

WEST TEXAS INTERMEDIATE ($/BBL)

SPOT MARKET ENERGY PRICES2002 - 2012

WTI MONTHLY WTI 12-MO AVG GAS MONTHLY GAS 12-MO AVG

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%


INFLATION: 12-MONTH CHANGE2002-2012

HOUSTON C PI-U U.S. C PI -U

houston economic update april 2011

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