Experts weigh in on industry trends in Greater Houston at annual forum

Jim Gaines, Chief Economist at the Texas A&M University Real Estate Center

Jim Gaines, Chief Economist at the Texas A&M University Real Estate Center

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Following two years of recovery in 2017 and 2018, job growth in the Greater Houston area is expected to level off and remain stable for 2019, said Patrick Jankowski, senior vice president of research at the Greater Houston Partnership. The Greater Houston area will see an increase of 71,000 jobs this year compared to 73,000 last year, Jankowski said.

“The job growth we are experiencing now is sustainable,” he said at the Houston Northwest Chamber of Commerce’s annual Economic Outlook Forum on March 29. “The economy is in the best shape since the beginning of the decade.”

The majority of the job growth will fall under health care, with an anticipated 9,000 additional positions, followed by construction and administrative support at 8,900 and 7,600 positions, respectively. By comparison, the oil and gas sector is only expected to grow by 1,900 new positions, he said.

But the slowed job growth is partially a result of the industry investing in technologies that streamline processes and improve efficiency. 

“[The industry] is able to produce more oil with fewer people,” Jankowski said. “I hate to say this, but we may never get back up to employment levels of 2014 because the energy industry doesn’t need to have people to grow production.”

That means job growth in Houston will no longer be fueled primarily by the oil and gas sector.

“It’s not going to be the juice to this economy that we had the first part of this decade,” Jankowski said. 

Food retail industry

Despite talks of a food retail market run entirely by Amazon, H-E-B President and Keynote Speaker Scott McClelland said brick-and-mortar stores are here to stay. However, McClelland added grocery stores must adapt to the growing presence of online food delivery services to remain competitive.

H-E-B recently opened a new store in the Spring area at FM 2920 and Gosling Road in 2018.

“We’re really inundated in the Spring and Cypress and North Houston area,” McClelland said at the Economic Outlook Forum. “At the same time, if you look at Kroger and Wal-Mart, they’ve pretty much stopped building altogether because they’re concerned about Amazon.”

Following Amazon’s purchase of Whole Foods in June 2017, stores such as Fed-Ex and Wal-Mart are experimenting with autonomous delivery vehicles and piloting delivery robots. 

“We all have to adapt rapidly or risk being left behind,” he said.

Between February 2018 and February 2019, job growth for food and beverage stores in The Woodlands, Houston and Sugar Land area dipped by 0.3%—a loss of about 700 jobs—according to a February economic report by employment agency Workforce Solutions. The closing of several Randalls grocery stores in the Greater Houston area in 2018 was one driver for this job loss, said Parker Harvey, principal economist of Workforce Solutions’ Gulf Coast Workforce Board.

“Longer term, it’s difficult to say how grocery and clothing retailers will fare. ... The traditional grocery space is likely to remain under pressure,” Harvey said.

To remain competitive, McClelland said H-E-B must work on improving its online delivery services, which costs the chain supermarket $10 per consumer while only costing the customer $5. H-E-B’s online delivery services include Curbside, which allows customers to pick up their orders at the store, and Delivery, which delivers orders to customers’ homes.

“Unfortunately, today our online experience still has some friction,” McClelland said.

But emphasis must also be placed on attracting consumers to continue shopping in store, he said. The H-E-B located at 20311 Champion Forest Drive in Spring, for example, opened in April 2017 with the chain’s first sit-down noodle restaurant as well as an in-store optical shop.

“[In the future], there’s going to be brick-and-mortar [stores], and there’s going to be online,” he said. “We think we can do both, but the brick-and-mortar [store] has got to be exciting and interesting and compelling.”

By Eva Vigh
Eva Vigh joined Community Impact Newspaper in 2018 as a reporter for Spring and Klein. Prior to this position, she covered upstream oil and gas news for a drilling contractors' association.


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