Houston official: Economy likely will not return to pre-coronavirus state until mid-2021

As the ongoing coronavirus pandemic and oil and gas downturn continue to cripple the Greater Houston area's economy, Patrick Jankowski, vice president of research for the Greater Houston Partnership, said he suspects the local economy will not return to its pre-coronavirus state until mid-2021 at the earliest. (Courtesy Adobe Stock)
As the ongoing coronavirus pandemic and oil and gas downturn continue to cripple the Greater Houston area's economy, Patrick Jankowski, vice president of research for the Greater Houston Partnership, said he suspects the local economy will not return to its pre-coronavirus state until mid-2021 at the earliest. (Courtesy Adobe Stock)

As the ongoing coronavirus pandemic and oil and gas downturn continue to cripple the Greater Houston area's economy, Patrick Jankowski, vice president of research for the Greater Houston Partnership, said he suspects the local economy will not return to its pre-coronavirus state until mid-2021 at the earliest. (Courtesy Adobe Stock)


As the ongoing coronavirus pandemic and oil and gas downturn continue to cripple the Greater Houston area's economy, Patrick Jankowski, vice president of research for the Greater Houston Partnership, said he suspects the local economy will not return to its pre-coronavirus state until mid-2021 at the earliest.

"The virus is in the driver's seat," Jankowski said in a May 12 webinar. "If we feel like we've got this thing in check and we're not going to have a huge second surge, then, yeah, by [quarter one] 2021, we should start seeing significant [economic] growth. But if we have a [coronavirus] resurgence, it's going to push the recovery back another quarter or two."

While the national unemployment rate has climbed to a historic 14.7%, Jankowski said a more accurate rate would be about five percentage points higher when taking into consideration those who are incorrectly classified and those who have dropped out of the workforce or are not searching for a job.

"The real unemployment rate in the U.S. is probably over 20%, probably closer to 21%—that would mean one in every five workers in the U.S. is unemployed, and that really is scary," Jankowski said.

Nationally, Jankowski said initial claims for unemployment insurance have declined each week after peeking in the week of March 22-28 at 6.86 million. However, the same trend could not be seen for the state of Texas. According to Texas Workforce Commission data, Texans filed 365,700 claims in the week of April 18-25, the highest number of claims filed in one week in the past two months.


"We're not seeing that sharp downward trend in Texas like we saw in the rest of the U.S.," Jankowski said. "I don't have a good explanation for this other than maybe the virus is [attacking] us a lot later than it attacked the rest of the nation. It could [also] be an issue with processing [claims]."

By comparison, claims in the Greater Houston area seemed to peak in the week of March 29-April 4 at 76,007 claims and have since steadily declined. 45,687 claims were filed the week of April 26-May 2.

"It's kind of heartening to see that it looks like claims peaked at the end of March [or the] beginning of April, and we're starting to get a steady decline in claims," Jankowski said. "It's still elevated, ... but you can definitely see the pattern. You can definitely see that claims are coming out at a lower rate each week, and so I hope this is a symbol that the worst of the layoffs and the worst of the downturn is over at least as far as unemployment goes."

In total, Jankowski said Greater Houston-area residents have filed about 388,000 claims for unemployment insurance since March 21.

"We're going to finish 2020 with a smaller economy, with less [gross domestic product] and less jobs than we started 2020 with," Jankowski said. "We're looking at some very serious downturns in the second quarter [of 2020], almost all of the forecasts that I've looked at show upturns starting in the third quarter and continued growth in the fourth quarter, but even by the end of the fourth quarter, we won't be back to where we started the year at, and we probably won't get back to where we started this year at probably until sometime in the middle of 2021."

Despite these job losses, Jankowski said there is hope on the horizon.

"It's been very trying times for us, but it looks like we're starting to see a little bit of improvement, a little bit of reopening," he said. "We really need to start seeing some growth and some economic activity, and hopefully, we'll start to see that in the third quarter [of 2020]."
By Hannah Zedaker
Born and raised in Cypress, Texas, Hannah Zedaker graduated from Sam Houston State University in 2016 with a bachelor's degree in mass communication and a minor in political science. She began as an intern with Community Impact Newspaper in 2015 and was hired upon graduation as a reporter for The Woodlands edition in May 2016. In January 2019, she was promoted to serve as the editor of the Spring/Klein edition where she covers Spring ISD and Harris County Commissioners Court, in addition to business, development and transportation news.


MOST RECENT

Houston City Hall in rainbow lighting
Greater Houston LGBT Chamber of Commerce celebrates five years of service

The organization is open to all and serves members throughout the Greater Houston area.

All nine Spring- and Klein-area ZIP codes experienced an increase in the number of homes sold in December compared to December 2019. (Courtesy Adobe Stock)
See how the Spring, Klein real estate market fared in December 2020

All nine Spring- and Klein-area ZIP codes experienced an increase in the number of homes sold in December compared to December 2019.

The new Fort Bend Epicenter multipurpose facility could be used as a spot for trade shows and sporting events, could act as a large-scale shelter for county residents in an emergency and more. (Community Impact Newspaper staff)
Large multipurpose complex coming to Fort Bend County; Sugar Land to widen University Blvd. and more top Houston-area news

Read the top business and community news from the past week from the Houston area.

Snow covers I-45 in Houston during a winter storm that hit Texas the night of Feb. 14. (Shawn Arrajj/Community Impact Newspaper)
Legislators probe energy officials over power failures, lack of preparation heading into winter storm

The Texas Legislature held hearings Feb. 25 with energy companies including Oncor Electric Delivery and the Electric Reliability Council of Texas in response to last week’s historic winter storm, which left millions of Texans without electricity for days.

Keith Luechtefeld spoke with Community Impact Newspaper about some of the short-term and long-term repercussions of the storm as well as some of the reasons why so many homes saw burst pipes during the freezing weather. (Community Impact staff)
Q&A: Greater Houston Builders Association President Keith Luechtefeld discusses power, plumbing, frozen pipes after Winter Storm Uri

Keith Luechtefeld spoke with Community Impact Newspaper about some of the short-term and long-term repercussions of the storm as well as some of the reasons why so many homes saw burst pipes during the freezing weather.

Klein ISD and Spring ISD were closed Feb. 15-19 due to the winter storm. (Community Impact staff)
Klein, Spring ISDs see drops in COVID-19 case counts after winter weather shutdown

Both school districts were closed last week due to winter weather and school breaks.

Harris County ESD No. 11 commissioners met for a meeting Feb. 25. (Courtesy Cypress Creek EMS)
Harris County ESD No. 11 begins construction process on new facility

District offiicials have said they hope Phase 1 of construction will be complete by August.

Winter Storm Uri led to closures across the Greater Houston area during the third week of February. (Courtesy Metropolitan Transit Authority of Harris County)
‘It’s been a rough year for us’: Expert explains economic effects of winter storm, ongoing pandemic in Houston region

“It's been a rough year for us economically; it's been a rough year for us public health wise. It's just been a rough year for us psychologically—first the coronavirus and then the freeze," said Patrick Jankowski, senior vice president of research with the Greater Houston Partnership.

In addition to produce, Theiss Farms offers grass-fed beef. The family’s herd of cattle grazes in a pasture near the intersection of Spring Cypress and Stuebner Airline roads. (Hannah Zedaker/Community Impact Newspaper)
Theiss Farms Market owner on winter storm: 'I knew everything was going to die, and it did'

Nothing could have prepared local farmers for last week's winter storm, Theiss Farms Market co-owner Dwayne Theiss said.

The $560 million central processor, which is part of the new Mickey Leland International Terminal, will replace the parking garage for terminals D and E. (Courtesy Houston Airport System)
Parking garage at George Bush Intercontinental Airport to be demolished to make way for new Mickey Leland International Terminal

The international central processor, which is part of the new Mickey Leland International Terminal, will replace the parking garage for terminals D and E.

As many as 31 stores across nine states will be shuttered as Fry's Electronics shuts down due to market changes and the pandemic. (Courtesy Qygen, Wikimedia Commons)
Fry's Electronics calls it quits after nearly 36 years in business

As many as 31 stores across nine states will be shuttered as Fry's Electronics shuts down due to market changes and the pandemic.