Speakers also reflected on the damage caused by Hurricane Harvey and subsequent recovery efforts, along with the lasting impact the storm will have on the region’s economic future.
Job growth and losses
Patrick Jankowski of Greater Houston Partnership said the region’s economy shifted away from oil and gas after oil prices dropped in 2015, but new jobs have largely been in lower-paying job sectors.
“The bad news is, we’ve just got the data for the past few years and it turns out that Houston did not perform as well as originally thought in 2015 and 2016,” Jankowski said. “Previously, we could make the claim that we had gone through the downturn without any net loss in jobs … but we actually lost jobs in 2015-16. A very shallow loss, but that shallow loss represents the 'R' word,” Jankowski, said referring to a recession.
The good news is that job growth has picked up, he said.
The area lost about 78,000 jobs in oil and gas from December 2014 to December 2017 and gained 87,800 non-energy jobs. Industries that gained jobs included those in hotels, restaurants, bars, health care, retail and public education, Jankowski said. Those jobs, however, generally have lower wages, he said.
Adjusted for inflation, the area has lost $5.8 billion in wages, which in turn limits the amount that people are able to spend, he said.
Lack of job growth has translated to lower population growth numbers, Jankowski said, except in international migration, which remains robust.
Growth in retail
Retail has seen huge growth, particularly in Northwest Houston, HNWCC Director of Economic Development Bobby Lieb said.
“Retail has been a very strong sector for Houston Northwest,” Lieb said. “We’ve had decreasing vacancies and dramatically increasing rental rates.”
For the past 12 months, Houston Metro added 5 million square feet of retail, of whichNorthwest Houston absorbed 1.35 million square feet of that space. That’s a 44 percent increase over the five-year average for the region, he said.
Harvey challenges
In addition to the economic downturn that hit the energy industry, the area’s greatest challenge in recent years was the damage caused by Hurricane Harvey.
The estimate for damage caused in the Greater Houston area is now $73.5 billion, Jankowski said.
While many businesses have renovated and reopened after flooding, other challenges include how to use vacated space such as the 2 million square feet of office space formerly used by Hewlett Packard Enterprise near Hwy. 249, Lieb said.
“I believe we will struggle for the next few years while we have the stigma of Harvey, and it will be difficult to attract new significant employers that are not location dependent,” Lieb said. “We will attract companies that need to be in Houston, but the Amazons of the world are going to look the other way until Harvey is a distant memory.”
Lieb said he believes Houston will continue to add energy and manufacturing jobs in 2018 if oil remains more than $60 a barrel, and growth in the retail and service sector will begin to taper off.
Other speakers at the forum included Jim “Mattress Mack” McIngvale, who discussed community efforts for Hurricane Harvey recovery, as well as representatives from the rail, port and aviation industries. U.S. Rep. Ted Poe, R-Humble, and U.S. Rep. Kevin Brady, R-The Woodlands, also spoke at the event, and Texas Association of Business CEO Jeff Moseley gave the keynote address.
