New issue of Economy at a Glance - Houston

Energy, recession, jobs

Wendy Natt, Jun 02, 09.

The Greater Houston Partnership just released the June issue of their monthly economic indicators summary report for Houston - Economy at a Glance.

Some highlights from the current issue:
Oil prices in Houston are on the rise, climbing from the $30s in the winter of ‘08-‘09 into the $60s today. GHP says that this is good news for the oil industry, as “prices need to reach $70 to support a solid level of international activity.”

Meanwhile, GHP says that natural gas prices are still falling hard, and domestic rotary rig activity has decreased by over half since last September. GHP says that low natural gas prices do have a silver lining, because Houston can sell natural gas feedstock to petrochemicals producers at competitively low prices, compared to oil-based feedstock.

This said, GHP notes that Houston’s recovery from the current recession depends on both moderately higher oil prices, and much higher natural gas prices caused by a resurgence in demand. Even when the economy recovers, soaring rig counts in Houston’s future are unlikely, says GHP, due to lower demand and improvements in rig technology.

Thus far, Houston and the state of Texas have fared better than the rest of the nation in terms of recession-related job losses over the past year. Total nonfarm payroll employment in the 10-county region fell by 1.4 percent, in comparison with a national net loss of 3.8 percent of jobs.

However, steady losses of high-paying jobs in two of Houston’s “upstream industries” - oil and gas extraction support activities - are still being seen for the fourth straight month. Another high-paid sector that’s been slipping since November is architectural and engineering services, reports GHP.

Despite these downturns, GHP says that Houston still maintains a low cost of living advantage over most other large metro areas (pop. over 2 million) who reported their data to the ACCRA Cost of Living Index. Houston, St. Louis, and Cincinnati were tied for lowest living costs.

GHP attributes Houston’s advantage to the low cost of housing, a scenario made possible “thanks to a combination of low regulatory barriers, plentiful land for residential development, minimal weather-related construction delays, and relatively inexpensive labor.”

Economy at a Glance provides comparison charts and graphs from original source documents for all of the above trends and conditions.

Back issues of the Economy at a Glance can be viewed from GHP’s website.

(Photo credit: swisscan)