Presented byJenny Philip, Manager of Economic Research

Greater Houston Partnership

Houston’s Economic Outlook

Presented byPatrick Jankowski, Vice President Research

Greater Houston Partnership

The Recession and Recovery

Cliffs Notes Version

Recession and Recovery

Nonfarm Payroll Employment - Houston MSA*

Unadjusted Adjusted

Jobs Lost 152,800 116,900

Source: Texas Workforce Commission

* Through August

Recession and Recovery

Nonfarm Payroll Employment - Houston MSA*

Unadjusted Adjusted

Jobs Lost 152,800 116,900

% Jobs Lost 5.8% 4.5%

Source: Texas Workforce Commission

* Through August

Recession and Recovery

Nonfarm Payroll Employment - Houston MSA*

Unadjusted Adjusted

Jobs Lost 152,800 116,900

% Jobs Lost 5.8% 4.5%

Jobs Recovered* 207,400 189,600

Source: Texas Workforce Commission

* Through August

Recession and Recovery

Nonfarm Payroll Employment - Houston MSA*

Unadjusted Adjusted

Jobs Lost 152,800 116,900

% Jobs Lost 5.8% 4.5%

Jobs Recovered* 207,400 189,600

% Recovered* 135.7% 162.2%

Source: Texas Workforce Commission

* Through August

Now you know enough to pass.

Houston vs. The Competition

24.6%

21.5%

26.7%

29.4%

35.0%

62.5%

82.0

101.5%

115.7

Philadelphia

Miami

Los Angeles

Chicago

Atlanta

New York

Boston

Dallas

DC

Houston 162.2%

Percent of jobs recovered through Aug ’12Houston vs. Top 10 Metros

Source: U.S. Bureau of Labor Statistics

100%

Miami

Philadelphia

Los Angeles

Chicago

Atlanta

New York

Boston

Dallas

DC

Houston

Percent of jobs recovered through Aug ’12Houston vs. Top 10 Metros

Source: U.S. Bureau of Labor Statistics

162.2%

117.0%

101.5%

82.0%

62.5%

35.0%

29.4%

26.7%

24.6%

21.5%

Detroit

Riverside

St. Louis

Phoenix

Tampa

San Diego

San Francisco

Minneapolis

Seattle

Baltimore

Houston

Percent of jobs recovered through Aug ’12Houston vs. Second 10 Metros

Source: U.S. Bureau of Labor Statistics

162.2%

55.1%

61.4%

55.0%

43.1%

43.5%

34.2%

31.6%

18.7%

23.1%

21.8%

In the competition among U.S. metros for job creation?

In the competition among U.S. metros for job creation?

Houston has already won the

super bowl.

So what makes Houston hot?

Us Them

Houston never had a housing bubble.

2.3 2.1 2.5 2.7

2.3 2.2 2.6

2.1 2.0

4.5

2.1

3.3 3.9

3.1

6.9

2.6 2.0 2.2

3.0 3.1

*Years of Income to Buy a Home, Q1/’00

No Housing Bubble

Source: GHP calculations based on National Association of Homebuilders data

* Median-priced home divided by median household income for each metro area.

No Housing Bubble

Source: GHP calculations based on National Association of Homebuilders data

*Years of Income to Buy a Home, Q1/’06

No Housing Bubble

Source: GHP calculations based on National Association of Homebuilders data

*Years of Income to Buy a Home, Q1/’00 vs ’06

2.6

3.4

2.7

5.5

2.8

3.6

4.2

4.8

1.7

7.6

2.9

4.6

8.9

6.7

8.2

3.3 3.6

1.7

3.6

8.0

1.9

2.7 2.5

3.0 2.6

2.0 2.3

3.1

1.8

4.3

2.1

3.6

4.9

2.8

6.3

2.3 2.5

1.6

3.6

6.3

No Housing Bubble

Source: GHP calculations based on National Association of Homebuilders data

*Years of Income to Buy a Home, Q1/’06 vs Q2/’12

No Housing Bubble

No zoning = lower housing costs

Market forces determine best use of resources

No Housing Bubble

– “Large metro areas with the least restrictive zoning have housing cost gaps that are 40 to 63 percentage points lower than metro areas with the most exclusionary zoning.”

– Housing Costs, Zoning, and Access to High Performing Schools, Brookings Institute, April 19, 2012

Perhaps you’ve seen the headlines?

Perhaps you’ve seen the headlines?

Perhaps you’ve seen the headlines?

We found shale in our backyard

Harris County

26 94

1,010

2,828

3,230

'08 '09 '10 '11 YTD - July '12

Source: Texas Railroad Commission

Drilling Permits Issued, Texas Eagle Ford Shale

Shale in our backyard

358 84411,986

118,075

282,721

'08 '09 '10 '11 YTD - July '12

Source: Texas Railroad Commission

Texas Eagle Ford Shale ProductionBarrels/Day

Shale in our backyard

8,400 corporate jobs added since May ’09

9,100 oil field service jobs added since Nov ’09

7,400 equipment manufacturing jobs added since Nov ’09

So where are we now?

WTI Spot Price ($/bbl )

• Wednesday close– $90.26

• One year ago– $76.40

• Three years ago– $69.34

• Average over last fifty-two weeks– $95.02

31

Forecast MonthIssued ’13 Average

Barclay’s July $115.00

Bank of America June 100.00

J.P Morgan Chase June 99.00

Deutsche Bank July 96.00

U.S. Energy Information Administration August 90.25

32

WTI Spot Price ($/bbl )

Global trade ties

Exports as a Percent of Gross Metro Product10 Most Populous U.S. Metro Areas

Metro Area ‘05 ‘10

Houston 13.9% 20.7%

Los Angeles 6.6 8.6

Miami 8.6 14.4

Philadelphia 4.3 6.6

Washington, DC 1.7 2.6

Dallas-Ft Worth 6.6 5.9

Boston 6.9 7.0

New York 5.2 6.8

Atlanta 4.5 5.5

Chicago 5.6 6.4

Global Trade Ties

Source: IHS Global Insight

Global Trade Ties

$47.4 $60.2$77.3 $83.2

$58.2

$76.9

$98.8$102.9

YTD '09 YTD '10 YTD '11 YTD '12

Exports Imports

$105.6

$137.1

$176.1$186.1

$ Value, Billions, Houston-Galveston Customs District, Through August

Source: U.S. Census Bureau

Data does not include trade in services

1,500 firms in Houston’s service

sector doing business overseas

Jobs Outlook

Job Creation -- Forecast vs Actual

48,800

Calendar '10

Job Creation -- Forecast vs Actual

48,800

76,800

Calendar '10 Calendar '11

Job Creation -- Forecast vs Actual

48,800

76,800

84,600

Calendar '10 Calendar '11 GHP Forecast

Job Creation -- Forecast vs Actual

48,800

76,800

84,600 83,700

Calendar '10 Calendar '11 GHP Forecast July '11 - July '12

So where are we now?

So where are we now?

We’re cool . . .

So where are we now?

We’re cool . . . . . . and we’re popular.

Don’t take my word for it.

Houston’s Population Clock

Houston’s Population Clock

The region adds 110,000 residents each year.

65,000 via natural increase i.e., more births than deaths

45,000 via net inmigrationi.e., more people moving in than out

Houston’s Population Clock

Every 5.4 minutes a new Houstonian is born.

Houston’s Population Clock

Every 15.7 minutes a Houstonian dies.

Houston’s Population Clock

Every 21.8 minutes someone moves here from overseas.

Houston’s Population Clock

24.2 minutes someone moves here from elsewhere in the U.S.

Houston’s Population Clock

Every 4.8 minutes Houston’s population grows by one resident.

Houston’s Population Clock

In the hour you’ve spent in this meeting, Houston has added another dozen residents.

Presented byJenny Philip, Manager of Economic Research

Greater Houston Partnership

Houston’s Economic Outlook

Presented byPatrick Jankowski, Vice President Research

Greater Houston Partnership