By all indications—unemployment rate, office space occupancy and interest from companies looking to do business in The Woodlands—the falling price of oil has had little effect on the area’s economic climate. According to The Woodlands Area Economic Development Partnership, Class A office vacancy rates hover around 5 percent, no major Woodlands-based companies have announced significant layoffs and companies are still converging on The Woodlands to either do business or relocate their own businesses. The EDP also reports that The Woodlands area unemployment rate is 2.49 percent, compared with 4.9 percent for the rest of Montgomery County and 5.6 percent for the Greater Houston area. "We have no indications from the energy sector that there have been any major changes to their workforce or capital investment," said Gil Staley, CEO of The Woodlands Area EDP. "But that could change in six months, certainly. For all indications right now, we don't see any impact [from the price of oil]." However, there are indicators that the effects of the recent energy downtun are being felt in The Woodlands. Layne Christensen, a water management, construction and oil drilling company, relocated its corporate headquarters from Mission Woods, Kansas, to the new Hughes Landing development in The Woodlands in 2012, bringing with it 135 executive-level jobs with a promise to hire 80 more. Both The Woodlands Township and Montgomery County brokered a deal in June 2013 with Layne Christensen in the form of a seven-year tax abatement—essentially a tax break for the company in exchange for bringing jobs and more than $22 million in salaries to the community. But in December 2014, Layne Christensen backed out of its deal with the township and the county, saying it could not meet its promise of job creation. Representatives from Layne Christensen did not return messages to Community Impact Newspaper for comment on this story. The case of Layne Christensen, however, may not be indicative of a Woodlands job economy that experts say may be too strong to suffer major losses. ExxonMobil's relocation of nearly 3,000 jobs to its 385-acre campus in Spring, which has prompted several companies to follow in its wake, has created an economic driver that could be recession-proof, experts say. The Woodlands economy "I believe The Woodlands is going to be in pretty good shape," said Adam Perdue, economist for the University of Houston's Bauer Institute for Regional Forecasting. "It is going to take a few years for all of the new development that ExxonMobil spurred to come online. Those that service ExxonMobil are still going to want to be there. The Woodlands is going to fare the least badly [among surrounding areas] out of the professional side of oil and gas." The energy industry makes up 32 percent of The Woodlands area job market among major employment sectors, making it the economic leader in the area. More than 8,800 workers are employed in the oil and gas industry in The Woodlands area. Some of the industry's largest companies are either headquartered in The Woodlands or have offices in The Woodlands, including Anadarko Petroleum Corporation, Huntsman LLC, Baker Hughes, Chevron Phillips Chemical and Halliburton Company. The Woodlands Area EDP works to recruit businesses to The Woodlands area as well as retain established companies. Over the past three years, the EDP has played a role in the corporate relocations to The Woodlands of Strike LLC, Newfield Exploration and Talisman Energy, among others. "At this point, [the energy recession] has not impacted us," Staley said. "But I think we have to be prepared for [a recession] to potentially happen." While experts say the local economy has yet to experience firsthand a significant fallout from plummeting oil prices, some believe indicators of a weakening economy could show up in the other forms. "If you're not that person being laid off, people start to fear they will be laid off," said Patrick Jankowski, vice president of research for the Greater Houston Partnership, or GHP. "Even if their job is safe, they will be cautious with their spending. If you work in a restaurant, you might not see as many people go out on a Wednesday night anymore." Perdue said financial losses at local oil companies have a trickle-down effect on other industries. "In Houston, what you are going to see is when oil companies do badly, their employees do badly, and they won't be able to spend as much money at any other local industries," he said. "You will see less spending throughout the economy—less spending on dry cleaning, less people going out to restaurants." Real estate market The local real estate market, which by some measures was the strongest it has ever been in 2014, is also expected to prove its resilience through the current energy downturn, said Ken Brand, sales manager for Better Homes and Gardens Real Estate Gary Greene Realtors. "Oil prices are falling and some people are concerned," Brand said. "But the market is not going to come back to Earth. There are thousands of people moving to the area, and they have to buy a home." According to the Houston Association of Realtors, the Greater Houston area housing market had its strongest year ever in 2014, with 75,319 homes sold, an increase of 3 percent over 2013. Last year, southwest Montgomery County was second in the Greater Houston area in the number of homes sold with 4,453 at an average price of $260,500. Brand said even if overall home sales do fall because of the energy recession, home prices should remain strong in The Woodlands area. "Even during the height of the last economic recession—when people lost their retirement incomes—prices never fell in The Woodlands," he said. "There were fewer sales, but The Woodlands is much different than it was then. This is not a recession, and people aren't bailing." Cautious optimism Local industry experts remain cautiously optimistic that the local economy will remain strong, despite the volatility of the price of oil. In its monthly "Economy at a Glance" publication, the GHP reports that the price of oil will not significantly increase this year. The GHP reports that the price of oil could rebound in 2016 if "low oil prices drive a significant amount of production from the market and global economic growth heats up, stimulating a demand for energy." Although there are fears of a return to the mid-1980s crash, Jankowski said Houston is more diversified and the U.S. economy is stronger. "I see some people panicking and some people who are nonchalant," he said. "They should be somewhere in between. [The energy recession] will cause some pain for Houston, but [it will not be] a repeat of the 1980s. We learned our lesson then. Growth will slow down, but the economy isn't going to implode."