Houston’s economy continues to demonstrate strength with employers expanding their payrolls by 81,900 jobs over the past 12 months ending in August, representing a 2.7% year-over-year gain. Job growth continues to be balanced across a range of key sectors with Professional and Business Services (22,800); Manufacturing (11,500); Other Services (9,700) registering the largest gains. The Houston area continues to outperform the nation registering a 3.6% unemployment rate in July, which is noteworthy given the 3.7% national unemployment rate which, prior to this year, had not been achieved for 50 years.
There is consensus among local and national economists that Houston is poised for continued growth. Moody’s Analytics projects 72,200 new jobs in 2019 with continued expansion through 2024. The University of Houston Institute for Regional Forecasting predicts a healthy employment picture with an average of 60,300 new jobs per year through 2021, conditional on oil maintaining a $60-$65 price range through that time frame.
Energy markets showed modest contraction as WTI crude averaged $56/bbl in Q3, down $3.50/bbl from Q2 and down $13/bbl since last year. Despite recent declines, the Energy Information Association still projects oil prices to close 2019 at $60/bbl. Lower oil prices have encouraged churn as firms push to cut costs and expand their presence in the key shale markets triggering a new round of M&A activity. Occidental Petroleum officially closed its $55 billion acquisition of Anadarko with major implications for three Houston submarkets. Prior to the merger, Oxy purchased the former ConocoPhillips campus in the Energy Corridor in anticipation of relocating from their current space in Greenway Plaza. Now the move to West Houston has been suspended and the campus relisted for sale as The Woodlands lobbies for Oxy to relocate North.