Greater Houston area could see economic relief from pandemic around mid-2021, economist says

Emerging technology and alternative energy sectors could help ease the blow of an oil and gas industry downturn in Houston caused by the COVID-19 pandemic, a Houston-area economist said. (Courtesy Visit Houston)
Emerging technology and alternative energy sectors could help ease the blow of an oil and gas industry downturn in Houston caused by the COVID-19 pandemic, a Houston-area economist said. (Courtesy Visit Houston)

Emerging technology and alternative energy sectors could help ease the blow of an oil and gas industry downturn in Houston caused by the COVID-19 pandemic, a Houston-area economist said. (Courtesy Visit Houston)

Following more than a year of strain caused by the ongoing coronavirus pandemic, the Greater Houston area’s economy could see some relief by the middle of 2021, according to Patrick Jankowski, senior vice president of research with the Greater Houston Partnership.

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."
By Kelly Schafler

Editor, Lake Houston | Humble | Kingwood

Kelly Schafler is the editor for the Lake Houston, Humble and Kingwood edition of Community Impact Newspaper, covering public education, city government, development, businesses, local events and all things community-related. Before she became editor, she was the reporter for the Conroe and Montgomery edition for a year and a half.



MOST RECENT

Active COVID-19 cases at Humble and New Caney ISDs are moving in opposite directions as of April 22. (Courtesy Adobe Stock)
Humble ISD sees rise in active COVID-19 cases; New Caney ISD cases decrease slightly

HISD cases increased among students and staff, while NCISD cases decreased since Community Impact Newspaper reported April 8.

The privately owned business will offer memory care services and assisted living for individuals with Alzheimer's disease and dementia. (Rendering courtesy The Bradford Memory Care)
Assisted-living facility The Bradford Memory Care to open in Atascocita

The privately owned business will offer memory care services and assisted living for individuals with Alzheimer's disease and dementia.

Maverick Remodeling and Construction employees use electronic gauges to determine how well a League City house that flooded from bust pipes is drying. (Jake Magee/Community Impact Newspaper)
Freeze-damaged homes might qualify for property tax reduction

As of March 31, HCAD said it had only received about 150 applications for the exemption.

As part of President Joe Biden’s plan to reopen schools safely nationwide, the department’s National School Lunch Program Seamless Summer Option is being expanded beyond the summertime. (Courtesy Adobe Stock)
USDA extends free school meals provision through 2021-22 school year

Schools nationwide will be able to serve nutritious meals to all students free of charge regardless of eligibility through June 30, 2022, officials announced.

Houston City Council approved a $500,000 grant ask that targets updates to the city’s parks master plan. (Courtesy Visit Houston)
Houston City Council approves $500,000 grant ask for parks plan

The city of Houston is asking for $500,000 in grant funding to help pay for updates to its parks master plan.

Appointments for a coronavirus vaccine are not needed at Woodforest Bank Stadium. (Courtesy Adobe Stock)
Appointments no longer required at The Woodlands-area vaccination hub

Everybody age 16 and up is eligible for a vaccine at the hub.

Six Fitbomb rooms will allow patrons to train in an infrared sauna with workout videos ranging from yoga to mixed martial arts. (Courtesy Euro Glo and Fit Spa)
Euro Glo and Fit Spa to offer infrared fitness rooms, therapeutic wellness services from Kingwood location

A second Euro Glo and Fit Spa location will open in Montgomery by the end of 2021.

George Floyd protest
Houston-area officials, advocates react to guilty verdicts in George Floyd murder

Across the city of Houston, local officials and advocates shared messages of solidarity and urged for more reforms in the wake of the announcement.

Hurricane Harvey hit the Houston region in 2017. (Vanessa Holt/Community Impact Newspaper)
How Harris County residents can prepare for hurricane season

After the most active hurricane season on record in 2020, Harris County officials said residents should be prepared for the upcoming season starting June 1.