Although the conversations at the event centered largely around inflation and supply chain problems, Jankowski said Houston is well-positioned heading into 2023.
Houston outlook
According to GHP research, Houston has the most jobs it has ever had after reaching a record high in September. A total of 488,700 jobs were created in Houston from May 2020-September 2022; this trumps the 359,400 jobs lost in the area from March-April 2020.Jankowski referenced other major U.S. metropolitan areas—such as New York, San Francisco and Los Angeles—which have not recovered their 2020 job losses.
"Overall, Houston's economy is really in pretty good shape,” Jankowski said. “We have built up a lot of muscle mass.”
In his keynote speech, Jankowski predicted three possible scenarios for Houston's economy in 2023: a mild recession, a "near miss," and a deep, longer recession.
A near miss could see 79,225 jobs gained, while a mild recession would see approximately 60,800 jobs gained. A deeper recession would see 30,375 jobs gained, according to GHP research.
Jankowski said there is a 50% chance of a short, mild recession, a 30% chance of a near miss and a 20% chance of a deep recession.
National scale
Between the three recent stimulus packages—the Coronavirus Aid, Relief and Economic Security Act, the Consolidated Appropriations Act, and the American Rescue Plan Act—the federal government injected $6.4 trillion into the U.S. economy. Adjusted for inflation, this is more money than the U.S. spent on World War II, Jankowski said, and is a contributing factor to the country’s economic state alongside supply chain issues and a workforce that has not grown in three years.The solution, Jankowski said, is the Federal Reserve raising interest rates, “in the guise of medicine,” to regulate the economy.
“[What] we're going to see next year—we're seeing already now—is the industries which are most interest-rate-sensitive are going to be the ones who are going to be most impacted next year,” Jankowski said.
Those industries include real estate and construction, he said.
Recession is not inevitable
Regarding recession, Jankowski said to “be careful in believing that things are inevitable, because they're not.” The economy is performing better than people may realize, he said, including job growth and stability.Jankowski projected the highest performing industries in the area for 2023, which will create 5,000 or more jobs, will be health care; government; construction; professional, scientific and technology services; restaurants and bars; administrative support; manufacturing; and energy. He said a recession is not a finite state, and the economy's normal state is one of expansion and growth.
“I still think Houston is going to do very well next year, especially compared to other metros,” Jankowski said. “Even if we do have some problems next year, it's not permanent.”
