Houston Economic Update July 2011

8/6/2019 Houston Economic Update July 2011

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July 2011 2011, Greater Houston Partnership

A publication of the Greater Houston Partnership Volume 20, Number 7July 2011

The Recovery Celebrates a Birthday Last month theeconomic recovery turned two. The National Bureau ofEconomic Research, the organization that officially datesU.S. business cycles, determined that the recession endedin June 09. The recovery has been weak, though. Thebroadest measure of economic activity, gross domesticproduct, has passed its previous peak, but many sectorsemployment, housing, auto sales, and industrial produc-tion, to name a fewremain well below prerecessionlevels. Houston continues to outperform the nation butfaces challenges of its own.

Though this newsletter focuses on the local economy (hence the name), what happens on thenational stage is important to Houston. The U.S. economy is one of three exogenous factorsthat drive the local economy, the others being the value of the dollar and the price of oil. Theweak dollar has kept affordable the goods and services that Houston exports overseas. The

price of oil has more than doubled from its recession low and stimulated exploration activitya key component of Houstons economic base. The weakness in the U.S. economy offsetsthe benefits (to Houston) of the other two. As proud Texans, we often dismiss asunimportant what happens outside the state, but tepid growth north of the Red Rivercontinues to restrain Houstons recovery.

The National EconomyThe Bureau of Economic Analysis (BEA) estimates that U.S. realgross domestic product (GDP), the value of all final goods and services produced in thenation and adjusted for inflation, peaked at $13.363 trillion1 in the fourth quarter of 07Over the course of the recession, real GDP fell $555.0 billion, or 4.1 percent, before hitting

bottom in late 09. BEAs most recent estimates place real GDP at $13.444 trillion in thefirst quarter of 11, an $80.8 billion, or 0.6 percent increase, over the previous peak.

GDP remains sluggish due to weak consumer spending, the lack of residential and com-mercial construction, cuts in state, local and federal government budgets, and lack ofbusiness confidence. The recent drop in oil prices has led to a drop in prices at the pump,

1 2005 dollars

This issue of Glance looks

at the U.S. economy two

years into the recovery, the

status of the recovery in

Houston, and the potential

impact the Panama Canal

expansion will have on

trade at the port.


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HOUSTONTHE ECONOMY AT A GLANCE

June 2011 2011, Greater Houston Partnership

which may free up consumer dollars for purchases elsewhere. However, the bickering inWashington over the debt ceiling, the annual federal deficit and the national debt underminesbusiness and consumer confidence.

Industrial productionthe output of all mines, manufacturing plants and utilities peaked

in September 07, according to Board of Governors of the Federal Reserve System. Duringthe recession, industrial production index fell 17.2 percent to its low point in June 09 beforerebounding to 93.0 this May. Industrial production remains 7.7 percent below its previouspeak.

The effects of the earthquake in Japan on the supply chain have begun to wane, but demandfor autos and light trucks remains weak. U.S. manufacturing would welcome an uptick inhome construction, which would boost demand for everything that goes into building andfurnishing a home, but construction remains well below prerecession levels. Mining output,as measured by the index, is now above prerecession levels driven mainly by higher com-

modity prices, especially higher oil prices.

New home construction peaked at an average annual rate of 2.273 million units in January06, according to data compiled by BEA. By January 09, starts fell to an annual rate of490,000, or less than one-fourth the prerecession levels. Home starts saw a brief but shallowrecovery in late 09 and early 10, spurred by the first-time home buyers tax credit. Startshave since trended downward. In May, the seasonally adjusted annual rate stood at 560,000.

The current oversupply of resale homes depresses demand for new homes. The NationalAssociation of Realtors estimates that at current sales levels the nation has a 9.3 month

supply of homes on the market. A 6.0 month supply is considered normal. By some esti-mates, more than one million foreclosed homes are on the market, depressing prices anddemand. In Houston, one in five home sales is a foreclosure; the typical foreclosure sells forless than half a traditional home sale price. Lackluster job growth has led to a slowdown innew household formation, further reducing the demand for new homes.

Sales oflight trucks and autos peaked at a seasonally adjusted annual rate of 17.57 millionunits in January 06, fell to 9.325 million units in February 09, and stood at 11.758 millionunits this May, according to the BEA. Lack of subprime financing, the absence of factoryand dealer incentives and lagging consumer confidence continue to plague sales.

Seasonally adjusted payroll employment peaked at 137.9 million jobs in January 08, thenfell to 129.2 million in February 10a drop of 8.75 million, or 6.3 percent, according to theU.S. Bureau of Labor Statistics (BLS). Since the recovery began, the nation has added 1.8million jobs, recouping 20.5 percent of the jobs lost in the recession. BLS reports that thenumber of unemployed in May stood at 13.9 million unemployed in May, including 6.2million workers unemployed 27 weeks or more. Another 8.5 million are working part-time


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involuntarily. The 13.9 million unemployed doesnt include the 2.2 million marginallyattached workerspeople who were available for work but had stopped looking, andtherefore werent considered to be in the labor force.

Employment is a Catch-22. Companies are reluctant to hire because the recovery has been

sluggish, and the economy remains sluggish because companies are not adding to theirpayrolls. Job growth would stimulate demand for autos, housing and other consumerpurchases, in turn leading to additional capital investment that would stimulate more hiring.Washington attempted to replace a lack of private sector demand with government spending(i.e., The American Recovery and Reinvestment Act of 2009) and the Federal Reserve triedto stimulate demand by lowing interest rates (i.e., Quantitative Easing), but those actionswerent enough to kick-start the economy. As a result, the recovery has become a slog, not afoot race.

The Local EconomyBEA estimates that Houstons real2 gross regional product (GRP)

the metro equivalent of real national GDP, peaked at $342.8 billion in 06, fell 1.8 percent to$336.7 billion in 07, but rebounded to $336.7 billion in 08. Real GDP stood at $344.7billion in 09, 0.6 percent above the previous peak.

BEA provides almost no industry-level detail for Houstons GRP. However, based on therebound in energy prices, the climbing North American rig count, and strong earningsreports from the oil field service companies suggest that much of Houstons economicgrowth has occurred in the energy industry and the sectors that service it. Though health carereform remains a concern, employment in that industry has grown nearly 11 percent sincethe recession began. Two factors feed that growthan aging population and a growing

population. Both stimulate demand for more health care services.

The Houston Purchasing Managers Index (PMI), a short-term indicator of regionalproduction, averaged 60.9 in the three years leading up to the recession (05-07) beforefalling to 39.0 in March 09, according to the Institute for Supply Management-HoustonThe PMI has since recovered, hitting 61.4 this May, and it represents the 20th consecutivemonth above 50. Readings above the neutral point of 50 indicate likely growth in productionover the next three to four months; readings below 50 suggest contraction.

The Baker Hughes count of active domestic rotary rigs peaked at 2,031 in September 08,

fell to 876 in June 09, and has since rebounded to 1,882 the last week of June. Drilling inthe shale playsMarcellus, Fayetteville, Haynesville, Woodford, Eagle Ford and Bakkendrives the surge in drilling activity. Shale drilling should remain well into the future. TheU.S. Energy Information Administration (EIA) expects shale gas to account for about 46percent of U.S. natural gas production by 35.

2 2005 dollars


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The price for West Texas Intermediate, the benchmark for U.S. crude, averaged $103 perbarrel in March, $110 per barrel in April, and $101 per barrel in May. EIA expects WTI spotprices to average $102 per barrel in 11 and $107 in 12. As a rule of thumb, prices above$70 a barrel sustain the profitability of deep offshore drilling and prices above $90 a barrelsustain activity in North American tar sands.

The number ofnewcars and trucks sold by dealers in the Houston metro area peaked at361,365 in the 12 months ending July 07, fell to a recession low of 218,710 in December09, and have since rebounded to 247,789 for the 12 months ending May 11, according toTexAuto Facts, published by InfoNation, Inc., of Sugar Land. Local auto sales have nowincreased for four consecutive months.

Over the past decade, auto sales in metro Houston averaged 265,000 to 270,000 per year.The record was set in 01, when local dealers sold more than 371,000 autos, light trucks andsport utility vehicles. Many of these sales benefited from easy financing that has since dried

up, explains Steve McDowell of TexAuto Facts. McDowell believes that local automobilesales may have stabilized at a sustainable level. Future growth will depend more on job andincome growth and less on the availability of subprime financing and dealer incentives.

Seasonally adjusted payroll employment in the 10-county Houston metro area peaked at2.616 million jobs in August 08, fell to 2.495 million jobs in December 09, and stood at2.584 million this May, according to estimates by the Texas Workforce Commission.Houston has recouped 89,100, or 73.5 percent, of the 121,200 jobs it lost in the recession.

While the region as a whole is three-fourths of the way to full recovery, the recovery has

been uneven. Employment in eight sectorshardware stores, food and beverage stores,computer systems design, education services, health care, accommodation and food servicesfood services and drinking establishments, and personal servicesis higher now than priorto the recession. Employment in five sectorsconstruction, nondurable goodsmanufacturing, air transportation, finance and real estatehas yet to recover. Those sectorshave either recovered less than 10 percent of what they lost or continue to lose jobs. Thedecline in information employment continues a trend that began more than a decade ago.

Growth in private sector employment has been particularly strong. During the past 12months, the private sector created 52,300 jobs its strongest performance since August 08,

the month before the recession hit Houston. Since the beginning of the recovery, the privatesector has created 96,000 jobs.

Most of the recovery in private sector employment has occurred in services, which haverecouped 73,600 jobs, or 85.0 percent of the jobs lost. The goods producing sectorsmining, construction, manufacturinghave not fared as well, regaining just 22,400 jobs, or


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27.6 percent of the jobs lost. Construction, which lost 38,900 jobs in the recession, continuesto struggle, having restored 3,800 jobs, or less than 10 percent of those lost.

Two sectors, oil and gas and government stand out, but for different reasons. The rise inoil prices over the past 12 months, new opportunities in the oil shale plays, and the

reopening (albeit slowly) of the Gulf of Mexico have fueled employment growth in theenergy sector, where 6,700 more people are working now than in June 10. Given that oiland gas is one of Houstons best-compensated sectorsaverage annual income exceeds$190,000this robust growth bodes well for the future of many of Houstons consumer-oriented sectors, such as retail, restaurants, arts and entertainment.

Conversely, government employment fell 7,300 jobs in May, an over-the-year decline of 1.8percent, but that is a once-a-decade artifact of census staffing. May 10 was the peak month,when field enumeratorsnearly all of whom were hired to work for a matter of weekswere out scouring for those who failed to respond by mail. The federal government now

employs 27,500 workers in Houston, the lowest level since March 04. Employment inpublic education fell 700 jobs in May, and that number is almost sure to grow as schooldistricts deal with budget shortfalls.

Panama Canal ExpansionThe much-touted expansion of the Panama Canalscheduledfor completion in 15will be a game-changer for Houston. The $5.2-billion project willadd a new traffic lane, deepen the existing lanes to 60 feet, and widen the existingnavigational channels to 180 feet.

The improvements will allow significantly larger ships to use the canal. The largest

container ships now transiting have a maximum capacity of 4,400 twenty-foot equivalentunits3 (TEUs). The expansion will allow ships with a 12,600-TEU capacity to use the canal.The Panama Maritime Authority expects container traffic to surge from 6.6 million TEUs in10 to 8.4 million TEUs in 15.

Many container ships now calling on West Coast ports will be diverted through the PanamaCanal and destined for Gulf Coast and East Coast ports. Several containers now offloaded inLos Angeles, Long Beach, Seattle and Tacoma and shipped inland via truck or rail will soonbe offloaded in Houston, Savannah and New York and shipped much shorter distances toinland markets. Based on analysis by the GHP Research Department, trade with Houstons

major Asian trading partners (the most likely candidates to pursue lower costs via theexpanded canal), could grow an additional $1.3 to $2.8 billion over the next five years.

GHP Research looked at trade growth under three scenarios:

3 A TEU is a 20-foot-long intermodal container, a standard-sized metal box that can be easily transferred between different modes oftransportation such as ships, trains and trucks.


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Baseline ScenarioTrade growth follows historical patterns, the expansion has noimpact on traffic from Asia. Net increase from 10: $4.7 billion by 16.

Scenario 1A portion of the cargo diverted from West Coast ports comes to Houston.Net increase from 10: $7.5 billion, $2.8 billion above trend.

Scenario 2Container traffic grows 15 percent per Port of Houston Authority public

statements. Net increase from 10: $6.1 billion, $1.3 billion above trend.

Potential Impact of the Panama Canal Expansion onHouston-Galveston Customs District* on Trade in 16 ($Million)

Major AsianTrading Partner

10 Baseline Scenario 1 Scenario 2

China $2,680.9 $5,943.8 $6,463.9 $6,835.4

S. Korea 677.8 155.6 1,691.7 1,789.9

Singapore 496.6 803.8 874.1 924.4

Japan 292.3 477.2 518.9 548.7

Taiwan 131.7 215.1 233.9 247.4

Total $4,279.4 $8,995.6 $11,798.7 $10,344.9

* The primary ports of the Houston-Galveston Customs District are the Port of Houston, Port of Galveston, Port of Freeport, Portof Texas City and George Bush Intercontinental Airport.

Source: GHP calculations based on data from the International Monetary Fund and the U.S. Bureau of the Census

Baseline ScenarioThe baseline is based on a regression analysis using historical andforecasted gross domestic product growth rates from the International Monetary Fund andhistorical trade data from the U.S. Census Bureau. The baseline growth from $4.3 billion in10 to $9.0 billion in 16 is the equivalent to an 11.2 percent compound annual growth rate

(CAGR).

Scenario 1The Council of State Governments Southern Office estimates that after thecanals expansion, the East Coast and Gulf Coast ports could capture up to 25 percent of theWest Coasts container traffic, specifically from the ports of Los Angeles, Long Beach,Oakland, Seattle, Portland and Tacoma. Assuming that the Gulf Coast and the East Coastports split that amount evenly and given that Houston is responsible for 70 percent of allcontainerized traffic in the Gulf, Houstons ports would acquire 8.75 percent4 of thecontainerized cargo that was originally destined for the West Coast.

Given this scenario, trade will increase by a compound annual growth rate of 15.6 percentfrom $4.3 billion in 10 to $11.8 billion in 16. This growth is 4.4 percentage points greaterthan the CAGR from the baseline scenario and $2.8 billion more in trade from East Asiaafter the expansion.

4 8.75%=25% of West Coast loss to East and Gulf Coast * 50% going to Gulf Coast * 70% of Gulf Coast going to Houston.


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Scenario 2The Port of Houston Authority anticipates that containerized cargo will grow15.0 percent annually as a result of the Panama Canal expansion. Given this scenario, tradewith Houstons major Asian trading partners could reach $10.3 billion by 16.

A variety of other factors will influence the outcome as well.

Although the expanded canal will be able to handle 12,000-TEU ships, the tradepublication Cargo Business News believes vessels in the 10,000-12,000 range will beconfined to Asia-Europe routes.

Not all cargos are likely to be diverted. Some analysts expect that discretionary cargo,such as furniture and household products, will most likely be diverted to ports alongthe Gulf or East Coast while high-value cargo is expected to remain on route to theWest Coast.

West Coast ports and the rail and truck lines serving those ports may reduce their feesto remain competitive. Anecdotal evidence suggests that is already occurring.

Fees to transit the canal may rise to cover the cost of the expansion, and the increasemay offset some of the cost benefits of using the canal. These tolls have more thandoubled over the past five years, from $32 per TEU in 05 to $72 per TEU in 10.

Finally, the health of the global economy, the strength of the U.S. dollar, the price of fueland the passage of free trade agreements will influence how much additional cargo comes toHouston via the expanded canal. Regardless, Houston stands to benefit significantly fromthe expansion of the Panama Canal.

Patrick Jankowski andJenny Hsu contributed to this issue of

The Economy at a Glance.

____________________________________The Greater Houston Partnership is the primary advocate of Houstons business community

and is dedicated to building regional economic prosperity.

Visit the Greater Houston Partnership on the World Wide Web at www.houston.org.Contact us by phone at 713-844-3600.


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Houston Economic Indicators

A Service of the Greater Houston Partnership

Most Year % Most Year %

Month Recent Earlier Change Recent Earlier Change

ENERGY

U.S. Active Rotary Rigs May '11 1,836 1,507 21.8 1,755 * 1,404 * 25.0

Spot Crude Oil Price ($/bbl, West Texas Intermediate) May '11 98.95 72.19 37.1 98.02 * 78.12 * 25.5

Spot Natural Gas ($/MMBtu, Henry Hub) May '11 4.19 4.15 1.0 4.17 * 4.66 * -10.5UTILITIES AND PRODUCTION

Houston Purchasing Managers Index May '11 61.4 59.0 4.1 56.8 * 51.4 * 10.5

Nonresidential Electric Current Sales (Mwh, CNP Service Area) May '11 4,315,317 4,150,542 4.0 20,019,110 19,545,221 2.4

CONSTRUCTION

Total Building Contracts ($, Houston MSA) May '11 706,972,000 839,872,000 -15.8 3,405,098,000 3,779,557,000 -9.9

Nonresidential May '11 291,740,000 384,289,000 -24.1 1,384,078,000 1,410,365,000 -1.9

Residential May '11 415,232,000 455,583,000 -8.9 2,021,020,000 2,369,192,000 -14.7

Building Permits ($, City of Houston) Apr '11 308,687,279 292,516,073 5.5 996,147,609 994,708,781 0.1

Nonresidential Apr '11 196,980,815 186,202,144 5.8 654,167,304 624,409,507 4.8

New Nonresidential Apr '11 25,490,805 69,578,711 -63.4 180,469,089 241,602,011 -25.3

Nonresidential Additions/Alterations/Conversions Apr '11 171,490,010 116,623,433 47.0 473,698,215 382,807,496 23.7

Residential Apr '11 111,706,464 106,313,929 5.1 341,980,305 370,299,274 -7.6

New Residential Apr '11 95,653,439 84,110,357 13.7 278,219,310 285,055,228 -2.4

Residential Additions/Alterations/Conversions Apr '11 16,053,025 22,203,572 -27.7 63,760,995 85,244,046 -25.2

Multiple Listing Service (MLS) Activity

Closings May '11 5,948 6,701 -11.2 24,318 25,830 -5.9Median Sales Price - SF Detached May '11 220,210 206,816 6.5 153,108 * 153,368 * -0.2

Active Listings May '11 51,652 51,185 0.9 51,652 * 51,185 * 0.9

EMPLOYMENT (Houston-Sugar Land-Baytown MSA)

Nonfarm Payroll Employment May '11 2,586,800 2,541,800 1.8 2,558,100 * 2,507,400 * 2.0

Goods Producing (Natural Resources/Mining/Const/Mfg) May '11 486,300 467,900 3.9 479,100 * 465,400 * 2.9

Service Providing May '11 2,100,500 2,073,900 1.3 2,079,000 * 2,042,000 * 1.8

Unemployment Rate (%) - Not Seasonally Adjusted

Houston-Sugar Land-Baytown MSA May '11 8.2 8.0 8.3 * 8.5 *

Texas May '11 7.9 7.7 8.1 * 8.2 *

U.S. May '11 8.7 8.7 9.2 * 10.0 *

Unemployment Insurance Claims (Gulf Coast WDA)

Initial Claims May '11 20,832 20,893 -0.3 19,697 * 22,192 * -11.2

Continuing Claims May '11 83,643 99,319 -15.8 79,265 * 109,779 * -27.8

TRANSPORTATION

Port of Houston Authority Shipments (Short Tons) Mar '11 26,375,065 25,422,604 3.7 73,901,403 68,116,089 8.5

Air Passengers (Houston Airport System) May '11 4,361,542 4,198,301 3.9 19,849,014 19,604,344 1.2

Domestic Passengers May '11 3,638,118 3,513,684 3.5 16,310,573 16,235,336 0.5

International Passengers May '11 723,424 684,617 5.7 3,538,441 3,369,008 5.0

Landings and Takeoffs May '11 73,856 70,371 5.0 356,604 349,096 2.2

Air Freight (000 lb) May '11 78,661 77,757 1.2 383,817 356,136 7.8

Enplaned May '11 39,611 40,658 -2.6 193,140 187,410 3.1

Deplaned May '11 39,050 37,099 5.3 190,677 168,726 13.0

CONSUMERS

New Car and Truck Sales (Units, Houston MSA) May '11 22,621 21,910 3.2 108,150 101,015 7.1

Cars May '11 10,191 10,131 0.6 47,648 46,468 2.5

Trucks, SUVs and Commercials May '11 12,430 11,779 5.5 60,502 54,547 10.9

Total Retail Sales ($000,000, Houston MSA, NAICS Basis) 4Q10 27,634 26,953 2.5 94,866 88,070 7.7

Consumer Price Index for All Urban Consumers ('82-'84=100)

Houston-Galveston-Brazoria CMSA May '11 201.624 194.037 3.9 196.071 * 191.986 * 2.1

United States May '11 225.964 218.178 3.6 220.441 * 216.546 * 1.8

Hotel Performance (Harris County)

Occupancy (%) 4Q10 53.8 51.6 51.5 * 56.2 *

Average Room Rate ($) 4Q10 90.51 91.29 -0.9 92.04 * 95.80 * -3.9

Revenue Per Available Room ($) 4Q10 48.67 47.14 3.2 51.46 * 54.05 * -4.8

POSTINGS AND FORECLOSURES

Postings (Harris County) May '11 2,973 3,492 -14.9 19,669 19,468 1.0

Foreclosures (Harris County) May '11 773 958 -19.3 4,169 5,548 -24.9

YEAR-TO-DATE

TOTAL OR AVERAGE*MONTHLY DATA


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SourcesRig Count Baker Hughes IncorporatedSpot WTI, Spot Natural Gas U.S. Energy Information AgencyHouston Purchasing Managers National Association ofIndex Purchasing Management

Houston, Inc.Electricity CenterPoint EnergyBuilding Construction Contracts McGraw-Hill ConstructionCity of Houston Building Permits Building Permit Department, City

of HoustonMLS Data Houston Association of RealtorsEmployment, Unemployment Texas Workforce Commission

Port Shipments Port of Houston AuthorityAviation Aviation Department, City of

HoustonCar and Truck Sales TexAuto Facts Report,InfoNation,

Inc., Sugar Land TXRetail Sales Texas Comptrollers OfficeConsumer Price Index U.S. Bureau of Labor StatisticsHotels PKF Consulting/Hospitality Asset

Advisors InternationalPostings, Foreclosures Foreclosure Information & Listing

Service

STAY UP TO DATE!

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number and your companys name and address. Archivedcopies are available to Partnership Membersin the Members Only section at www.houston.org. For information about joining the Greater HoustonPartnership and gaining access to this powerful resource, call Member Services at 713-844-3683.

The foregoing table is updated whenever any data change typically, 11 or so times per month. Iyou would like to receive those updates by e-mail, usually accompanied by commentary, please e-maiyour request for Key Economic Indicators to [email protected] with the same identifying infor-mation.

You may request Glanceand Indicatorsin the same e-mail.


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HOUSTON MSA NONFARM PAYROLL EMPLOYMENT (000)Change from % Change from

May '11 Apr '11 May '10 Apr '11 May '10 Apr '11 May '10

Total Nonfarm Payroll Jobs 2,586.8 2,570.3 2,541.8 16.5 45.0 0.6 1.8

Total Private 2,199.1 2,181.9 2,146.8 17.2 52.3 0.8 2.4

Goods Producing 486.3 478.4 467.9 7.9 18.4 1.7 3.9

Service Providing 2,100.5 2,091.9 2,073.9 8.6 26.6 0.4 1.3

Private Service Providing 1,712.8 1,703.5 1,678.9 9.3 33.9 0.5 2.0

Mining and Logging 87.3 86.4 79.8 0.9 7.5 1.0 9.4

Oil & Gas Extraction 47.8 47.4 45.5 0.4 2.3 0.8 5.1

Support Activities for Mining 37.6 37.4 33.2 0.2 4.4 0.5 13.3

Construction 174.4 169.8 171.5 4.6 2.9 2.7 1.7

Manufacturing 224.6 222.2 216.6 2.4 8.0 1.1 3.7

Durable Goods Manufacturing 146.6 143.8 138.6 2.8 8.0 1.9 5.8

Nondurable Goods Manufacturing 78.0 78.4 78.0 -0.4 0.0 -0.5 0.0

Wholesale Trade 134.1 133.7 130.7 0.4 3.4 0.3 2.6

Retail Trade 265.4 266.8 259.9 -1.4 5.5 -0.5 2.1

Transportation, Warehousing and Utilities 122.2 121.1 121.5 1.1 0.7 0.9 0.6

Utilities 16.3 16.3 16.0 0.0 0.3 0.0 1.9

Air Transportation 23.8 23.8 24.0 0.0 -0.2 0.0 -0.8Truck Transportation 20.9 20.7 19.8 0.2 1.1 1.0 5.6

Pipeline Transportation 10.3 10.3 10.1 0.0 0.2 0.0 2.0

Balance, incl Warehousing, Water & Rail Transport 50.9 50.0 51.6 0.9 -0.7 1.8 -1.4

Information 29.9 29.8 32.0 0.1 -2.1 0.3 -6.6

Telecommunications 15.1 15.2 16.2 -0.1 -1.1 -0.7 -6.8

Finance & Insurance 86.8 87.4 86.6 -0.6 0.2 -0.7 0.2

Real Estate & Rental and Leasing 47.5 47.1 49.0 0.4 -1.5 0.8 -3.1

Professional & Business Services 376.3 367.0 359.9 9.3 16.4 2.5 4.6

Professional, Scientific & Technical Services 177.0 177.7 174.3 -0.7 2.7 -0.4 1.5

Legal Services 22.7 22.7 22.9 0.0 -0.2 0.0 -0.9

Accounting, Tax Preparation, Bookkeeping 17.3 18.4 17.0 -1.1 0.3 -6.0 1.8

Architectural, Engineering & Related Services 56.6 57.5 58.5 -0.9 -1.9 -1.6 -3.2

Computer Systems Design & Related Services 25.6 25.4 24.5 0.2 1.1 0.8 4.5 Admin & Support/Waste Mgt & Remediation 180.4 168.3 166.2 12.1 14.2 7.2 8.5

Administrative & Support Services 169.3 159.9 158.3 9.4 11.0 5.9 6.9

Employment Services 61.0 59.0 57.2 2.0 3.8 3.4 6.6

Educational Services 43.7 43.7 42.9 0.0 0.8 0.0 1.9

Health Care & Social Assistance 270.2 272.3 266.1 -2.1 4.1 -0.8 1.5

Arts, Entertainment & Recreation 28.3 26.6 29.1 1.7 -0.8 6.4 -2.7

Accommodation & Food Services 213.6 213.9 209.3 -0.3 4.3 -0.1 2.1

Other Services 94.8 94.1 91.9 0.7 2.9 0.7 3.2

Government 387.7 388.4 395.0 -0.7 -7.3 -0.2 -1.8

Federal Government 27.5 27.7 40.1 -0.2 -12.6 -0.7 -31.4

State Government 72.5 73.0 71.7 -0.5 0.8 -0.7 1.1

State Government Educational Services 38.6 39.0 38.0 -0.4 0.6 -1.0 1.6

Local Government 287.7 287.7 283.2 0.0 4.5 0.0 1.6

Local Government Educational Services 200.2 200.5 198.1 -0.3 2.1 -0.1 1.1

SOURCE: Texas Workforce Commission


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Source: Institute for Supply Management-Houston

Source: Texas Workforce Commission

30

35

40

45

50

55

60

65

70

Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

PURCHASING MANAGERS INDEXHOUSTON & U.S. 2002-2012

HOUSTON U.S.

-120

-100

-80

-60

-40

-20

0

20

40

60

80

100

120

140

160

1.95

2.00

2.05

2.10

2.15

2.20

2.25

2.30

2.35

2.40

2.45

2.50

2.55

2.60

2.65


12-MONTHCHANGE(000)

NONFARM

PAYROLLEMPLOYMENT(000,000)

HOUSTON MSA EMPLOYMENT2002-2012

12-MONTH CHANGE JOBS


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1.60

1.65

1.70

1.75

1.80

1.85

1.90

1.95

2.00

2.05

2.10

2.15

2.20

2.25

430

440

450

460

470

480

490

500

510

520

530

540

550


SERVICE-PROVIDING

(000,000)

GOODS-PRODUCING

(000)

GOODS-PRODUCING AND SERVICE-PROVIDING EMPLOYMENTHOUSTON MSA 2002-2012

GOODS-PRODUCING JOBS SERVICE-PROVIDING JOBS

0

1

2

3

4

5

6

7

8

9

10

11

Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

PERCENTOFLABORFORCE

UNEMPLOYMENT RATEHOUSTON & U.S. 2002-2012

HOUSTON U.S.


13/13



Source:U.S. Energy Information Administration

Source: U.S. Bureau of Labor Statistics

0

4

8

12

16

20

24

28

0

20

40

60

80

100

120

140


HENRYHUBNATURALGAS($/MMBTU)

WESTTEXASINTERMEDIATE($/BBL)

SPOT MARKET ENERGY PRICES2002 - 2012

WTI MONTHLY WTI 12-MO AVG GAS MONTHLY GAS 12-MO AVG

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%


INFLATION: 12-MONTH CHANGE2002-2012

HOUSTON CPI-U U.S. CPI-U

Houston Economic Update July 2011

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Transcript of Houston Economic Update July 2011