houston economy at a glance - august 2014

August 2014 ©2014, Greater Houston Partnership

A publication of the Greater Houston Partnership Volume 23, Number 8 August 2014

Long-Term Outlook Remains Bright — By 2023, Houston’s gross regional product

(GRP) will approach $1.1 trillion, more than double where it stands today. The region will

add nearly 1.2 million residents, more than 700,000 jobs, and $300 billion in personal in-

come. Even after accounting for inflation, Houston’s prospects look impressive, with real

GRP, personal income, and retail sales growing 35 to 55 percent over the decade. The re-

gion’s growth will outpace that of the nation and the state, as well. Houston’s economy

will grow 4.5 percent annually over the decade, compared to 3.3 percent for the nation and

4.3 percent for the state. That’s the latest forecast by Ray Perryman, the Waco-based econ-

omist who has studied the U.S., Texas and metro economies since the ’70s.1

Houston-Sugar Land-Baytown Economic Forecast Key Indicator ’13 ’23 Δ ’13 – ’23 % CAGR1

Population (hundreds) 6,331.1 7,507.7 1,176.6 1.72

Wage and Salary Employment (hundreds) 2,924.9 3,640.6 715.7 2.21

Gross Regional Product (billions) $532.9 $1,093.9 $561.0 7.46

Real GRP (billions)2 $415.6 $644.4 $228.8 4.48

Personal Income (billions) $319.7 $622.7 $303.0 6.89

Real Personal Income (billions)2 $274.2 $419.3 $145.1 4.34

Retail Sales (billions) $115.1 $228.2 $113.0 7.08

Real Retail Sales (billions)2 $98.7 $153.6 $54.9 4.52

Housing Permits 51,334 62,830 See Note See Note

1 Compound Annual Growth Rate 2 ’05 constant dollars

Note: Perryman projects the region will permit more than 620,000 single- and multi-family homes over the forecast period.

Source: The Perryman Economic Forecast: Long-Term Outlook for the United States, Texas, Major Metropolitan Areas, and Regions, Summer 2014

Perryman’s forecast calls for every sector in Houston to expand over the next 10 years,

with the greatest output gains in mining (i.e., oil and gas) and services, and the greatest

employment gains in services and trade (i.e., retail and wholesale).2

1 The Perryman Economic Forecast: Long-Term Outlook for the United States, Texas, Major Metropolitan Areas, and Re-

gions, is available for purchase from The Perryman Group, 800.749.8705 or [email protected]. 2 Perryman uses a broader definition of services than does the Bureau of Labor Statistics. He includes any firm that provides

services to an individual, company or government enterprise. This definition lumps together sectors such as health care, busi-

ness and professional services, hotels, restaurants, amusements and personal services that elsewhere would be reported sepa-

rately.

mailto:[email protected]


METRO HOUSTON GROSS REGIONAL PRODUCT FORECAST- BILLIONS (Nominal $)

Year Mining Con-

struction Manufac-

turing Trade TWU

Infor-mation

FIRE Services Govern-

ment

’13

$102.936 $24.784 $97.734 $56.093 $37.080 $7.752 $63.388 $111.33 $31.158

’23

263.884 43.880 186.984 105.471 65.102 12.727 113.986 246.617 54.708

$ Change 160.948 19.096 89.25 49.378 28.022 4.975 50.598 135.287 23.55

% Change 156.4 77.0 91.3 88.0 75.6 64.2 79.8 121.5 75.6

Trade = Wholesale and Retail; TWU = Transportation, Warehousing, Utilities, FIRE = Finance, Insurance, Real Estate

Source: The Perryman Economic Forecast: Long-Term Outlook for the U.S., Texas, Major Metropolitan Areas, and Regions, Summer 2014

METRO HOUSTON EMPLOYMENT FORECAST

Year Mining Con-

struction Manufac-

turing Trade TWU

Infor-mation

FIRE Services Govern-

ment

’13

110,543 203,102 253,212 456,925 136,235 33,395 149,385 1,200,959 377,409

’23

139,634 234,090 281,294 562,141 160,547 40,120 172,567 1,625,077 421,377

# Change 29,091 30,988 28,082 105,216 24,312 6,725 23,182 424,118 43,968

% Change 26.3 15.3 11.1 23.0 17.8 20.1 15.5 35.3 11.6

Trade = Wholesale and Retail; TWU = Transportation, Warehousing, Utilities, FIRE = Finance, Insurance, Real Estate

Source: The Perryman Economic Forecast: Long-Term Outlook For The U.S., Texas, Major Metropolitan Areas, and Regions, Summer 2014

The long-term outlook is equally bright. By 2040, Perryman expects Houston’s GRP to

approach $2.8 trillion (6.3 percent CAGR), personal income to exceed $1.7 trillion (6.5

percent CAGR), wage and salary employment to exceed 4.7 million (1.8 percent CAGR),

and the region’s population to stand at 9.9 million (1.7 percent CAGR).

Mid-Year Review — As of August 1, the Houston Astros had won 41 games, 10 wins shy

of the team’s total wins for the ’13 season. Houston had recorded 26.6 inches of rainfall so

far this year, nine inches ahead of where the region stood last August. And so far this

summer, Houstonians have endured only six days with temperatures of 95 degrees or more,

compared with 36 days by this time last year.3 On many accounts, ’14 is shaping up to be

better than ’13. That’s also evident when one looks at Houston’s key economic indicators.

Over the next few pages, the GHP takes a mid-year look at those indicators and examines

what they suggest for the remainder of the year.

Employment — The Houston-Sugar Land-Baytown metro area created 46,400 jobs in the

first half of ’14, one of the best starts on record, according to the Texas Workforce Com-

mission (TWC). This pace comes as something of a surprise since employment growth had

3 Temperatures are measured from June 1 through August 7.


slowed considerably toward the end of last year, especially in key parts of Houston’s eco-

nomic base—exploration, oil field services, manufacturing and engineering.

Several events reversed that trend earlier in the year. The harsh winter caused natural gas

prices, which averaged $3.70 per million Btu in ’13, to spike above $8.00 on the spot

market in February, creating a windfall that local energy firms plowed into exploration ac-

tivities. Chevron Phillips, ExxonMobil and Dow

Chemical started construction on multi-billion-

dollar ethane crackers, spurring growth in con-

struction employment. Health care employment

held steady in spite of changes brought on by

Obamacare. Local engineering firms added staff

to handle growing project backlogs. And local res-

taurateurs continued to hire cooks, wait staff, bus-

boys and hostesses to handle Houstonians’ grow-

ing penchant for dining out.

A strong start suggests a strong finish, but one

shouldn’t expect a mirror performance. The eco-

nomic base needs to continue expanding for the

secondary sectors to grow. A drop in oil prices, a

cutback in exploration, slower export growth,

fewer people moving here, a construction slowdown, the U.S. slipping back into reces-

sion—all would impact Houston’s economy. But oil continues to trade above $95 a barrel.

The rig count is up 138 rigs since January. Year to date, exports are up nearly nine percent

over last year. The demand for housing remains strong. Houston continues to draw talent

from across the globe. In short, the outlook remains bright through the end of ’14 and be-

yond.

A note of caution: TWC reports that June had one of the weakest job gains since the start

of the recovery. On a seasonally adjusted basis, Houston lost 1,400 jobs in June. And the

Houston PMI (see below) suggests the economy is slowing. One month does not make a

trend, however. The preponderance of data suggests ’14 should end with substantially

more jobs than it began with. Total nonfarm payroll employment will likely hit 2.9 million

early this fall.

Houston Purchasing Managers Index — The Houston Purchasing Managers Index

(PMI), a short-term leading indicator for regional production, registered 52.4 in June,

down from 59.2 in May. The PMI stood at 57.1 in January.4 While June’s reading still

4 The PMI is compiled by the Institute for Supply Management-Houston (ISM-Houston). The indicator has a possible range from

zero to 100. Readings above the neutral point of 50 indicate likely growth in production over the next three to four months; read-

CHANGE IN HOUSTON NONFARM PAYROLL EMPLOYMENT

Year As of Mid-

year For the

Full Year

’05 21,600 89,200

’06 35,300 106,000

’07 43,100 89,100

’08 6,800 19,900

’09 -88,500 -108,800

’10 18,500 47,300

’11 33,100 80,500

’12 55,200 115,400

’13 35,100 76,200

’14 46,400 TBD

Source: Texas Workforce Commission


points to expansion, seven of the PMI’s eight components weakened from May to June—

sales, production, employment, purchases, prices paid, lead times, and finished goods in-

ventory.

"The June survey results

point to continued growth

at a slower pace,” explains

Ross Harvison of ISM-

Houston. “Production rates

and inventory levels are my

current concern. The In-

ventory indexes have point-

ed to contraction for a cou-

ple of months, and while

the Production index still

points to expansion, it fell

significantly in June. In-

creasing Finished Goods

Inventories tend to lead to

lower production. The June numbers are in line with this concern."

Home Sales — Houston home sales were up 2.3 percent in the first six months of this

year compared to the same period last year, according to the Houston Association of

REALTORS® (HAR). That’s slightly above mid-year ’13 and well above historic mid-

year totals. If the second half of ’14 follows historical trends, with more homes sold July

to December than January to June, this could be another record-setting year for Houston.

July and August,

among the strongest

months for home sales,

will signal how the

year should conclude.

If they outperform last

year, Houston could

log more than 90,000

closings. Houston area

realtors sold 89,602

homes in the 12

months ending June ’14, well ahead of 81,833 homes sold in the preceding 12 months, so

ings below 50 suggest contraction. The Houston PMI is derived from monthly surveys of local purchasing managers representing

various industries including manufacturing, healthcare, electronics, finance and energy.

METRO HOUSTON HOME SALES

Year As of June 30 Calendar Year % of Annual

Sales, Jul - Dec

’09 29,110 63,801 54.4

’10 32,364 61,004 46.9

’11 30,975 63,606 51.3

’12 34,894 74,164 53.0

’13 42,563 88,612 52.0

’14 43,553 90,000+ TBD

Source: Houston Association of REALTORS® and GHP projections

30

35

40

45

50

55

60

65

70

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Source: Institute for Supply Management-Houston

Houston Purchasing Managers Index50 = Neutral


a record total this year is clearly attainable. One caveat: inventories remain low. At the end

of June, HAR had 3,000 fewer homes in its MLS database than in June of last year. In a

normal market, that situation might portend a drop in sales. But anecdotal evidence sug-

gests many homes are now being sold without ever being listed. Those homes only enter

the system after closing. If that’s the case, and the market maintains its current pace, ’14

should be the first year in which the Houston market records more than 90,000 closings.

It’s almost certain that Houston will set another dollar volume record this year. Sales

topped $22.3 billion in the 12 months ending June ’14, a 21.0 percent increase over the

$18.4 billion recorded in the prior 12 months. Last year finished with $18.4 billion in total

sales, so unless the bottom falls out of the market, this year’s total should exceed $23.0

billion.

Vehicle Sales — Houston auto dealers sold 195,164 vehicles in the first half of ’14, a 16.9

percent increase over the 167,011 sold in the first half of ’13, according to TexAuto Facts,

published by InfoNation, Inc. of Sugar Land.

“Sales for the region should re-

main strong for the remainder

of the year,” opines Steve

McDowell, owner of InfoNa-

tion. “Job growth appears likely

with demand running ahead of

supply for skilled jobs. Interest

rates are now expected to re-

main low until ’15. Financing

continues to be available and

loan terms have been increas-

ing, resulting in lower monthly

payments. Lower maintenance

costs and increased fuel efficiency in new models are moderating overall cost to consum-

ers who are purchasing new vehicles.”

InfoNation forecasts local dealers will sell in excess of 360,000 vehicles this year, having

sold 347,859 in ’13. If the second half of ’14 finishes as strong as the second half of ’13,

auto dealers could exceed that forecast. The record was set in ’01, when dealers sold

371,160 vehicles.

Commercial Real Estate — Houston is experiencing a commercial construction boom.

Twenty-three office projects totaling 5.8 million square feet broke ground in the first half

of the year, according to CBRE. That activity brings the total office space under construc-

150

200

250

300

350

400

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Ve

hic

les

(0

00

s)

Source: TexAuto Facts Report by InfoNation

Vehicle Sales, 12-Month Total, Houston Metro Area


tion to 16.3 million square feet, more than double the amount of space under construction

at mid-year last year.

Sixty-five percent of the space under construction is either pre-leased or owner-occupied,

notes CBRE, and the market has absorbed 900,000 or more square feet per quarter over the

past 12 quarters, so the hope is that Houston isn’t over-building. However, six of the pro-

jects started this year were “spec” buildings, as were 11 started in Q4/13. Of further con-

cern, CBRE estimates that 4.1 million square feet of space will come on the market when

tenants leave existing space for new buildings. These moves will be made in phases, so the

impact could be modest.

CBRE reports that 96 industrial buildings totaling 7.9 million square feet were under con-

struction at the end Q2/14. That compares with 81 buildings totaling 8.0 million square feet

at the end of Q2/13. Both numbers

represent an addition of less than 2.0

percent to the industrial market, so

overbuilding of industrial space is not

yet a concern. The industrial vacancy

rate stood at 5.4 percent mid-year, on-

ly marginally up from 5.3 percent at

year’s end, and the average monthly

lease rate was $0.66 per square foot in

Q2/14, up from $0.63 in Q4/13.

The amount of retail space under construction tripled over the past year, from 0.8 million

in Q2/13 to 2.7 million in Q2/14. In a market with 209.4 million square feet of retail space,

current construction represents an increase in space of just 1.3 percent, not enough to have

a significant impact on availability or lease rates. Roughly 2.0 million of the retail space

under construction is grocery related, as HEB, Walmart, Kroger, Aldi and Whole Foods

hope to tap Houston’s employment and population growth.

Oil and Gas — Exploration activity remained strong in much of the U.S., but especially in

Texas. The number of wells drilled in the Eagle Ford and Permian Basins, the state’s two

largest plays, rose significantly during the first half of the year. The activity in the field was

felt here in Houston as well. In the 12 months ending in June ’14, the region added 3,500

jobs in exploration, 2,800 in oil field services, and 1,100 in oil field equipment manufactur-

ing. This job growth has supported the construction of industrial, office and retail space

noted earlier.

Oil prices have held above $90 a barrel since the first of the year. In fact, prices have not

slipped below $70 a barrel since May ’10, and then only briefly. Seventy dollars is a criti-

HOUSTON COMMERCIAL REAL ESTATE*

Under Construction YTD Absorption

Q2/14 Q2/13 Q2/14 Q2/13

Office 16.3 8.0 2.8 1.6

Retail 2.7 0.8 1.4 1.2

Industrial 7.9 8.0 3.3 3.6

* Millions of square feet Source: CBRE, Inc.


cal threshold below which drilling in Texas shale plays is no longer feasible. The U.S. En-

ergy Information Administration forecasts West Texas Intermediate to average $100.98 per

barrel this year and $95.17 next, prices which should sustain exploration activity at or

above current levels through the end of ’15. Oil prices have held steady in spite of tensions

in Ukraine, sanctions against Russia, and violence in Iraq, Syria, Israel, Gaza, and Libya.

These conflicts have the potential to disrupt global oil supplies, but prices have remained

steady on the futures markets. The nation’s reduced dependence on imported crude should

help minimize impact of potential price shocks. Imports of crude have fallen to 8.3 million

barrels a day, down from 12.2 million barrels in August ’10.

Natural gas prices spiked to $8.15 per million Btu in February due to the harsh winter and

have trended down since, averaging less than $4 per million Btu in July. To have a signifi-

cant impact on drilling, natural gas prices need to remain above $6.00 per million Btu. At

present, there is enough natural gas associated with oil production to meet demand. Once

the nation begins exporting significant quantities of liquefied natural gas, or the ethane

crackers now under construction begin production, prices may rise, but those two events

are several years away.

The current weakness in gas prices has continued the long-running shift from gas-directed

to oil-directed drilling. In late July, five out of every six rigs working in North America

drilled for oil and one in six looked for natural gas. In August ’08, the ratio was the reverse.

Reports for Houston-area oil field service companies suggest exploration and production

activities should remain strong through the end of the year.

ENERGY INDUSTRY OVERVIEW - KEY INDICATORS - YEAR TO DATE

Through June 30 Δ, Jun’13 - Jun ’14

’14 ’13 # %

U.S. Land Rig Count – Avg. 1,760 1,707 53 3.1

U.S. Land Well Count – Total 18,360 17,545 815 4.6

Texas Wells Drilled – Total 14,880 11,773 3,107 26.4

Texas Drilling Permits Issued – Total 11,860 11,578 282 2.4

Spot Price, West Texas Intermediate, $/bbl – Avg. $101.16 $94.15 $7.01 7.4

Spot Price, Henry Hub Gas, $ MBtu – Avg. $3.77 $3.57 $0.20 5.6

Sources: Baker Hughes, Texas Railroad Commission, U.S. Energy Information Administration


Aviation Update — The Houston Airport System (HAS) handled more than 26.0 million

passengers in the first half of ’14, a 4.0 percent increase from the 25.0 million in the same

period last year. The strong performance surpasses the previous January-to-June record

reached in the first half

of ’08. The airport sys-

tem has benefited from

strong international traf-

fic growth, up 10.9 per-

cent from 4.4 million

travelers June ’13 YTD

to 4.9 million June ’14

YTD. During the same

period, domestic pas-

senger traffic rose 2.5

percent, from 20.6 mil-

lion passengers to 21.1

million.

HAS either announced or launched nonstop service to several international destinations

in the first half of this year. Of particular note were nonstop flights to Korea, Norway,

Chile and the Dominican Republic. These additions have shifted passenger flow in recent

years, with Central/South America, Canada, and Asia/Australia/Africa now garnering

larger market shares and Mexico gathering a smaller share than four years ago.

Foreign Trade — Through the first half of ’14, more than $127.3 billion in foreign trade

passed through the Houston-Galveston Customs District, up 4.7 percent from the $121.6

30.0%

36.3%

17.4%

9.2%

3.2% 3.8%

31.6%30.0%

17.6%

10.7%

6.2%3.8%

Central/S Amer Mexico Europe Canada Asia/Africa/Aus Middle East

HAS International Market Share

CY '10 YTD '14

Source: Houston Airport System Note: Regions defined by HAS.

0

5

10

15

20

25

30

June'04

June'05

June'06

June'07

June'08

June'09

June'10

June'11

June'12

June'13

June'14

Pas

sen

gers

, Mill

ion

s

Houston Airport System Passenger VolumeJune YTD Comparisons

International Domestic

Source: Houston Airport System


billion handled in the first half of ’13. Since ’04, district trade has grown at a 10.3 percent

CAGR. Six months into

’14, Houston has already

handled more trade than

it did in all of ’04. Ex-

ports through the cus-

toms district spurred

much of the growth, in-

creasing at a CAGR of

14.1 percent since ’04,

nearly double the CAGR

of 7.3 percent for im-

ports. During the first

half of ’14, exports to-

taled $65.8 billion, up

8.8 percent from the $60.5 billion during the same period last year. Imports totaled $61.5

billion, down 0.6 percent from the $61.1 billion handled in the first half of ’13.

Houston-Galveston Customs District Traffic - $ Billions

Exports June ’13 YTD June ’14 YTD % Change

Mineral Fuel, Oil $21.694 $26.784 23.5

Industrial Machinery, Incl. Computers 9.836 9.787 -0.5

Organic Chemicals 8.081 7.796 -3.5

Plastics 3.918 3.575 -8.7

Electrical Machinery 2.328 2.574 10.6

All Other Commodities 14.633 15.275 4.4

Total Exports $60.493 $65.794 8.8

Imports June ’13 YTD June ’14 YTD % Change

Mineral Fuel, Oil $33.276 $30.455 -8.5

Industrial Machinery, Incl. Computers 4.458 5.410 21.4

Articles of Iron or Steel 4.074 4.472 9.8

Electric Machinery 2.384 3.150 32.1

Organic Chemicals 2.834 3.131 10.5

All Other Commodities 14.058 14.862 5.7

Total Imports $61.088 $61.483 0.6

Data provided by WISER, at http://www.wisertrade.org, from US Census Bureau, Foreign Trade Division

Patrick Jankowski and Jenny Philip

contributed to this issue of

Houston: The Economy at a Glance

0

50

100

150

200

250

300

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14YTD

$, B

illio

ns

Houston-Galveston Customs District Trade Value

Exports ImportsSource: WiserTrade


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HOUSTON—THE ECONOMY AT A GLANCE


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

June '14 May '14 June '13 May '14 June '13 May '14 June '13

Total Nonfarm Payroll Jobs 2,886.5 2,883.0 2,799.0 3.5 87.5 0.1 3.1

Total Private 2,512.0 2,499.1 2,434.5 12.9 77.5 0.5 3.2

Goods Producing 570.1 566.8 550.9 3.3 19.2 0.6 3.5

Service Providing 2,316.4 2,316.2 2,248.1 0.2 68.3 0.0 3.0

Private Service Providing 1,941.9 1,932.3 1,883.6 9.6 58.3 0.5 3.1

Mining and Logging 114.1 111.7 107.4 2.4 6.7 2.1 6.2

Oil & Gas Extraction 62.3 61.3 58.8 1.0 3.5 1.6 6.0

Support Activities for Mining 50.3 49.1 47.5 1.2 2.8 2.4 5.9

Construction 196.3 196.8 190.7 -0.5 5.6 -0.3 2.9

Manufacturing 259.7 258.3 252.8 1.4 6.9 0.5 2.7

Durable Goods Manufacturing 173.9 173.3 171.7 0.6 2.2 0.3 1.3

Nondurable Goods Manufacturing 85.8 85.0 81.1 0.8 4.7 0.9 5.8

Wholesale Trade 158.0 156.0 150.3 2.0 7.7 1.3 5.1

Retail Trade 286.6 286.8 283.3 -0.2 3.3 -0.1 1.2

Transportation, Warehousing and Utilities 136.8 135.6 130.7 1.2 6.1 0.9 4.7

Utilities 16.4 16.3 16.3 0.1 0.1 0.6 0.6

Air Transportation 23.1 23.1 23.1 0.0 0.0 0.0 0.0

Truck Transportation 24.9 24.5 23.9 0.4 1.0 1.6 4.2

Pipeline Transportation 9.7 9.7 9.5 0.0 0.2 0.0 2.1

Information 33.2 32.9 32.7 0.3 0.5 0.9 1.5

Telecommunications 15.2 15.1 14.6 0.1 0.6 0.7 4.1

Finance & Insurance 91.6 90.9 90.9 0.7 0.7 0.8 0.8

Real Estate & Rental and Leasing 53.9 53.5 52.3 0.4 1.6 0.7 3.1

Professional & Business Services 442.2 438.6 429.7 3.6 12.5 0.8 2.9

Professional, Scientific & Technical Services 216.6 213.7 202.7 2.9 13.9 1.4 6.9

Legal Services 24.5 23.9 24.2 0.6 0.3 2.5 1.2

Accounting, Tax Preparation, Bookkeeping 20.5 20.7 20.1 -0.2 0.4 -1.0 2.0

Architectural, Engineering & Related Services 75.1 74.4 69.3 0.7 5.8 0.9 8.4

Computer Systems Design & Related Services 31.8 31.3 29.4 0.5 2.4 1.6 8.2

Admin & Support/Waste Mgt & Remediation 200.5 200.2 202.7 0.3 -2.2 0.1 -1.1

Administrative & Support Services 189.6 189.9 193.1 -0.3 -3.5 -0.2 -1.8

Employment Services 78.4 76.2 77.3 2.2 1.1 2.9 1.4

Educational Services 51.0 51.6 48.3 -0.6 2.7 -1.2 5.6

Health Care & Social Assistance 297.4 295.7 287.6 1.7 9.8 0.6 3.4

Arts, Entertainment & Recreation 33.0 31.6 31.4 1.4 1.6 4.4 5.1

Accommodation & Food Services 256.4 256.2 246.1 0.2 10.3 0.1 4.2

Other Services 101.8 102.9 100.3 -1.1 1.5 -1.1 1.5

Government 374.5 383.9 364.5 -9.4 10.0 -2.4 2.7

Federal Government 27.2 27.3 27.5 -0.1 -0.3 -0.4 -1.1

State Government 70.7 72.8 70.2 -2.1 0.5 -2.9 0.7

State Government Educational Services 37.6 39.6 37.3 -2.0 0.3 -5.1 0.8

Local Government 276.6 283.8 266.8 -7.2 9.8 -2.5 3.7

Local Government Educational Services 191.1 198.9 183.9 -7.8 7.2 -3.9 3.9

SOURCE: Texas Workforce Commission



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 July '14 1,876 1,766 6.2 1,825 * 1,760 * 3.7

Spot Crude Oil Price ($/bbl, West Texas Intermediate) July '14 102.10 105.43 -3.2 101.48 * 95.78 * 6.0

Spot Natural Gas ($/MMBtu, Henry Hub) July '14 3.96 3.63 9.1 4.63 * 3.72 * 24.5

UTILITIES AND PRODUCTION

Houston Purchasing Managers Index June '14 52.4 57.1 -8.2 57.3 * 58.9 * -2.7

Nonresidential Electric Current Sales (Mwh, CNP Service Area) June '14 4,675,695 4,668,384 0.2 25,417,761 24,560,828 3.5

CONSTRUCTION

Total Building Contracts ($, Houston MSA) June '14 4,067,677,000 952,689,000 327.0 15,580,499,000 5,997,087,000 159.8

Nonresidential June '14 3,334,661,000 283,335,000 1076.9 10,835,975,000 1,745,468,000 520.8

Residential June '14 733,016,000 669,354,000 9.5 4,744,524,000 4,251,619,000 11.6

Building Permits ($, City of Houston) June '14 561,461,160 390,616,363 43.7 4,205,528,707 2,795,567,960 50.4

Nonresidential June '14 402,775,097 231,924,628 73.7 2,828,230,849 1,790,328,118 58.0

New Nonresidential June '14 181,382,592 65,552,428 176.7 1,754,925,253 835,161,352 110.1

Nonresidential Additions/Alterations/Conversions June '14 221,392,505 166,372,200 33.1 1,073,305,596 955,166,766 12.4

Residential June '14 158,686,063 158,691,735 0.0 1,377,297,858 1,005,239,842 37.0

New Residential June '14 138,147,264 141,184,870 -2.2 1,223,993,928 897,064,584 36.4

Residential Additions/Alterations/Conversions June '14 20,538,799 17,506,865 17.3 153,303,930 108,175,258 41.7

Multiple Listing Service (MLS) Activity

Property Sales June '14 9,099 8,638 5.3 43,553 42,563 2.3

Median Sales Price - SF Detached June '14 214,000 192,320 11.3 192,800 * 175,137 * 10.1

Active Listings June '14 29,513 32,518 -9.2 28,406 * 32,805 * -13.4

EMPLOYMENT (Houston-Sugar Land-Baytown MSA)

Nonfarm Payroll Employment June '14 2,886,500 2,883,000 0.1 2,852,933 * 2,766,067 * 3.1

Goods Producing (Natural Resources/Mining/Const/Mfg) June '14 570,100 566,800 0.6 562,783 0 542,517 * 3.7

Service Providing June '14 2,316,400 2,316,200 0.0 2,290,150 0 2,223,550 * 3.0

Unemployment Rate (%) - Not Seasonally Adjusted

Houston-Sugar Land-Baytown MSA June '14 5.4 6.7 5.3 * 6.4 *

Texas June '14 5.5 6.9 5.4 * 6.5 *

U.S. June '14 6.3 7.8 6.5 * 7.7 *

TRANSPORTATION

Port of Houston Authority Shipments (Short Tons) June '14 4,023,010 3,573,849 12.6 22,915,308 22,095,322 3.7

Air Passengers (Houston Airport System) June '14 4,773,664 4,626,977 3.2 26,028,617 25,023,886 4.0

Domestic Passengers June '14 3,846,045 3,794,771 1.4 21,100,402 20,579,452 2.5

International Passengers June '14 927,619 832,206 11.5 4,928,215 4,444,434 10.9

Landings and Takeoffs June '14 68,551 68,309 0.4 404,443 402,023 0.6

Air Freight (metric tons) June '14 35,327 33,924 4.1 210,462 205,972 2.2

Enplaned June '14 18,652 18,705 -0.3 111,560 108,768 2.6

Deplaned June '14 16,675 15,219 9.6 98,902 97,204 1.7

CONSUMERS

New Car and Truck Sales (Units, Houston MSA) June '14 31,662 26,418 19.9 195,164 167,011 16.9

Cars June '14 16,798 13,635 23.2 86,850 75,182 15.5

Trucks, SUVs and Commercials June '14 14,864 12,783 16.3 108,314 91,829 18.0

Total Retail Sales ($000,000, Houston MSA, NAICS Basis) 4Q13 35,486 31,561 12.4 114,476 108,258 5.7

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

Houston-Galveston-Brazoria CMSA June '14 214.668 207.882 3.3 212.836 * 206.584 * 3.0

United States June '14 238.343 233.504 2.1 236.384 * 232.367 * 1.7

Hotel Performance (Houston MSA)

Occupancy (%) 1Q14 73.3 70.4 73.3 * 70.4 *

Average Room Rate ($) 1Q14 107.17 100.46 6.7 107.17 * 100.46 * 6.7

Revenue Per Available Room ($) 1Q14 78.58 70.76 11.1 78.58 * 70.76 * 11.1

YEAR-TO-DATE TOTAL or

YTD AVERAGE*MONTHLY DATA



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 Port of Houston Authority Aviation Aviation Department, City of Houston Car and Truck Sales TexAuto Facts Report, InfoNation, Inc.,

Sugar Land TX Retail Sales Texas Comptroller’s Office Consumer Price Index U.S. Bureau of Labor Statistics Hotels PKF Consulting/HospitalityAsset Advisors International Postings, Foreclosures Foreclosure Information &Listing Service



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Nonfarm Payroll Employment, Houston MSA

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Goods-Producing and Service-Providing EmploymentHouston MSA

Goods-Producing Jobs Service-Providing Jobs



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Houston Texas U.S.

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Source: U.S. Energy Information Administration

Spot Crude and Natural Gas PricesMonthly Averages

WTI Natural Gas

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