The Greater Houston Partnership predicts the Houston area will add 84,600 jobs this year. Some economic observers are speculating the estimate may be conservative – especially since the most recent data from the Texas Workforce Commission shows that Houston-area employers created 87,900 from November 2010 to November 2011.
We asked experts in finance, real estate, recruiting and economic development to assess the area economic picture. Here is what they said:
Q: Where is Houston’s economy headed in 2012?
A: “I think it’s headed up,” said James Weston, associate professor of finance at Rice University. “Everything I see points to a return to moderate economic growth.”
He ticked off the factors: Energy prices are stable; housing prices were essentially flat in Houston last year even as they fell nationwide; and Houston is adding jobs at a faster clip than the nation as a whole.
The likelihood of a double-dip recession – which was a worry not that long ago – has faded, he added.
Regina Morales, director of economic development for the city of Sugar Land, characterized 2011 as the year of recovery, when the region regained the jobs it lost during the recession.
“Now we’re poised for expansion in 2012,” said Morales, who predicted that energy, technology, health care, education and food service will drive the growth.
The real estate community looks at job growth, and those 87,900 new jobs last year are a good sign, said Bruce McClenny, president of Apartment Data Services, which gathers information on pricing, occupancy and rents on apartments.
Job growth is tied directly to the demand for multifamily housing, especially from people who are moving to Houston from other states and new college graduates.
That sets the stage for the same kind of growth in 2012, McClenny said.
Here the distinction between the city of Houston and the greater Houston area is made more clearly than in the earlier story about real estate projections. Note that the region has about a quarter of the state’s population but nearly half of its projected job growth for the year. Either one of those projections is out of whack or the state isn’t in such great shape overall. The story also notes the likelihood of flat property tax revenues and a continued shrinking of the government sector. Some different policy decisions, mostly but not entirely at the state level, could have led to a better outcome, but it’s way too late for any of that now. Maybe we’ll get lucky with sales tax revenues and not have as big a problem this year. We can hope, anyway.