Institute For Regional Forecasting
Spring 2016 Symposium
Tuesday, May 17, 2016
“Houston's Economy Absorbs the Big Blow from Oil in 2015:
Who Shares the Pain in 2016?"
Featuring: Robert W. Gilmer, Ph.D.
Director, Institute for Regional Forecasting
Tuesday, May 17, 2016
pickup: 11 a.m.
Luncheon & Presentation:
11:30 a.m. - 1:30 p.m.
Online registration is now closed. If you would like to attend, we will have a few seats available at the door for $140/seat. Please see the attendant at the special assistance table in the lobby of the hotel.
- For Houston's economy, the setback from the Fracking Bust and drilling downturn has been accompanied by two big positives -- continued strong U.S. growth and a major east-side boom in refining and petrochemical construction. We will review where we stand on all these important drivers of local growth, and how they come together to determine Houston's job growth in coming years.
- The drilling downturn is already the worst since 1982, with the U.S. rig count already down by over 70 percent. Oil-related layoffs may continue through 2016, but much of the damage to Houston's economy is already done with 40,000 jobs now lost in oil services and oil-related manufacturing.
- With no recovery or slow recovery in drilling, there is time for the economic pain to spread to many sectors that so far have not felt the effect of an energy downturn. Businesses with strong ties to the U.S. economy or to the east side construction boom may never feel the effects of the oil bust, but businesses living off of Houston's past economic momentum or high rates, in-migration may be in the cross-hairs in 2016. Healthcare, leisure, restaurants, retail, real estate, light construction, and government might be good examples of at-risk industries.
- We will look closely at case studies of residential and commercial real estate that show how slower job and population growth have damaged the outlook for specific industries. For example, the local office market felt oil's sting almost immediately, with no job growth to support leasing and major tenants subletting existing space. Meanwhile, the apartment market remained in great shape through 2015, but then failed to heed the storm warnings. Now there is no significant job or population growth to support the 30,000 units still in the pipeline.