Jankowski spoke to business members and officials at Partnership Lake Houston’s 2021 Economic Outlook Luncheon on Feb. 23. At the virtual luncheon, Jankowski shared insight on struggling and emerging industries as well as the 181,000-plus Houston-area jobs that were lost during the pandemic that have still not been recouped.
Jobs lost
The Greater Houston area lost 350,200 jobs in March and April of last year but gained 214,500 jobs between May and December, according to Jankowski. This left 135,700 Houston-area jobs unrecovered as of December; however, Jankowski said historic data shows layoffs are common in the month of January across a majority of sectors, which brings Houston's estimated job loss up to 181,700.
Many jobs lost in the Houston area have been in the oil and gas industry. Bill Gilmer, the director of the University of Houston’s Bauer Institute for Regional Forecasting, said he estimates Houston is down 31,000 energy jobs since the second quarter of 2019, as Community Impact Newspaper previously reported.
Although the price for a barrel of oil returned to $50.43 in January, Jankowski said the energy industry is unlikely to fill positions that were lost in the layoffs.
“The damage has already been done; we've already seen so many layoffs in the oil and gas industry,” Jankowski said. “We're not going to see a significant uptick in hiring. If there's demand for more oil, the industry is going to handle it just by taking their existing workforce and giving them overtime or pushing a little bit harder.”
Comparatively, several white-collar sectors have recovered completely from the pandemic, including finance and insurance; utilities; and professional, scientific and technical services, Jankowski said. However, data for Harris County showed nail salons, barbershops, mechanics, hotels, and the arts, entertainment and recreation industry have not yet reached 50% recovery from the pandemic.
“[Harris County] jobs in the high-wage sector are doing better than any other sector out there," he said. "Middle-wages have just got back to where they should be, but the low-wage sector is struggling."
Emerging sectors
As more vaccines are administered and COVID-19 case counts continue to drop, Jankowski said the Houston region will see an economic surge around mid-2021 due to pent-up demand. There will be increased demand for U.S. exports, and businesses investments will resume. The hotel, restaurant and travel industries—first domestically, then internationally—will also see increased interest, he said.
“As more people get vaccines, they’ll be more willing to go out, and you'll start to see people making investment decisions,” he said.
However, Jankowski said the region will still face major challenges—specifically, in the energy, commercial, industrial and health care industries. Moreover, the loss of oil and gas industry jobs will lead to downturns in manufacturing, transportation and housing industries, he said.
Some new, emerging sectors, such as alternative energy and technology, could help take some of the economic strain off the region, Jankowski said. He pointed to Greentown Labs, a clean-energy incubator, opening in the former Midtown Fiesta grocery store; Aerospace company Axiom's proposal to build the first commercial space station at the Houston Spaceport; and Hewlett Packard Enterprise moving its global headquarters to Springwoods Village.
"These are all fairly new sectors, but they're sectors which hold great promise for Houston," he said. "Any one by themselves won't replace oil and gas—at least, not anytime soon—but as a group and as they grow, we have great potential and great promise. Oil and gas is ever going to go completely away, but it's not going to be the growth engine."
