Bobby Lieb took the opportunity with his presentation to focus on the more localized Houston Northwest economy. Yet, the two economies differ slightly in percentage of jobs within the different industry sectors. This is attributed to the fact that Houston Northwest is primarily a suburban area of Houston.
She works with senior management in planning the company's marketing strategy and public relations support for local and national conferences, luncheon meetings, recruitment programs, and special events.
Lisa works closely with the company's brokers to develop effective custom market research material specific to existing and potential clients. CPRC is the first and only accreditation for commercial real estate research professionals. By Lisa Bridges Jun 26, The latest rounds of stimulus spending then saw sales spike to 30, units in March of this year and stay at high levels through June, only to fall back to 22, units in July as stimulus finally waned.
Everything related to Houston single-family housing is booming. Low interest rates are playing a role, stimulus checks helped with the down payment, and having your spouse and school-age children home for 24 hours a day argued for an extra bedroom or two.
Figure 12 shows the early pandemic collapse in sales of existing homes during the stay-home orders, followed by an on-going surge to seasonally-adjusted 10, units by January. Sales have peaked with the end of fiscal stimulus, but still are running 6. Existing home inventory fell from an already low 3. The shock absorber for strong demand and zero supply was a jump in the median single-family price by How bad was this downturn? The employment figures show a devastating recession, while the personal income data and spending point to continued good times.
Since March , I have argued that the outcome of the current pandemic for Houston would be a moderate to serious recession once gains from stimulus payments offset and stabilized losses from wild swings in employment. Moderate U. The index is shown in Figure 13 along with a similar U. Looking at the more recent data in the right hand chart, we see the local economy currently sits on a line somewhere between moderate to strong growth.
Local growth is positive through July but much slower than the rest of the country. While the index tells us little about the level of the economy, just its direction and rate of change, this slow progress again confirms Houston status as laggard in the state and national recovery.
There is another way to ask how serious this downturn was — the regional economic base. To find the key drivers of expansion and contraction in a local economy, economists often look at a select group of sectors called the economic base.
Exports bring fresh revenue and income into the metro area, drive local expansion, and create growth opportunities among secondary, inherently local activities like bars, restaurants, retail, dry cleaners, barbers, or most of health care.
When COVID stuck, most of the impact of social-distancing fell on the secondary industries with little ability to affect regional growth. After all, base customers were not here but scattered across the state or around the world.
Vaccines are strongly clearing the way for a return of contact-sensitive activity. But the base is less fortunate. While progress on vaccination is moving forward rapidly in the U. The right side of the figure shows how the total base — oil plus not-oil — has moved through a oil-industry credit crunch and then the pandemic.
Most of the pain from these base losses was concentrated in U. Instead of quickly finding their footing after the lockdown ended, the base losses — oil and non-oil — simply continued to mount through February of this year.
Losses stabilized in February, and by this July 18, base jobs were back 4, in oil , accounting for the return of only How do we think about this recovery?
We have restored Further recovery will come from three sources that should follow one after the other and into the COVID distance-sensitive jobs are already returning first as the vaccine is effective and public health restrictions are lifted, followed by the economic base jobs that must wait for the national and global economy to heal, and finally a slower return of oil-related jobs in late and beyond.
The last of the COVID social-distancing losses return slowly through the rest of this year as we wait for broader public vaccination, for school to begin in September to free up many low-wage caretakers, and for the end of all federal pandemic unemployment payments. We have already made great progress in bringing back many of these social-distancing jobs, with recovery of The economic base is about our capacity to sell to the rest of the nation or world, and it drives the critical pieces of the local business cycle.
The national recovery in employment is expected sometime in mid-to-late , and the global GDP data is also forecast to return to pre-pandemic levels next year. This brings local non-oil activity back on track by sometime next year. And while global oil demand may return to pre-pandemic levels in late , U. This is discussed below. Figure 16 It does not imply a rush back into the oil fields, as indicated by the slow recovery seen so far in U.
Oil demand is still weak. From pre-pandemic highs near million barrels per day, global oil demand fell to Any global oil demand forecast is still conditioned by serious and on-going pandemics in large countries like India and Brazil that lack good access to the vaccine. Renewed Iranian compliance with the nuclear deal in exchange for relief from oil sanctions is sought by the Biden administration, but with prospects currently in limbo.
The agreement would allow Iran to export 1. Meanwhile, U. As we discuss further below, U. Many have committed to holding the line on expansion of production until world growth stabilizes and OPEC spare capacity has been absorbed.
This is a formula for higher oil prices — but not for increases in capital spending, rig counts, or new oil jobs. Slow and methodical recovery is underway in the oil fields, and Figure 17 shows the latest data on the rig count. Working rigs have made only limited progress over the past year. In the rig count fell from near rigs in to a seasonally-adjusted all-time low of The pandemic then crushed this record in August with a fall to rigs.
By August, the rig count averaged , still only As a leading indicator of oil-field activity, the rig count has long been the industry bellwether in terms of the outlook for hiring and oil production.
But current events and the structure of the fracking industry have modified this perspective, though not displaced it. Fracking requires two major stages that each entail similar costs, but which are timed differently and bring different industry resources to bear. After a well is drilled and the rig is removed, it may be days, weeks, or months before another crew and a fleet of trucks and equipment arrives to pressurize, fracture and complete the well.
This lag between first and second stage leaves an inventory of wells that are drilled but uncompleted DUCs and await further work. The industry was holding a large inventory of such wells as the pandemic began, and as it struggles with capital constraints, it made sense to first turn to fracking and completion as the least costly way to replace reserves or expand production. According to the Department of Energy, there were about 9, such wells waiting for completion before the pandemic began.
This was a very large backlog left over from , but the number has since fallen steadily to under 6, by last July. This decline is seen on the left side of Figure 20, while the right side shows the month-to-month change in the number of DUCs. Since the oil-market collapse May , the number of DUCs has shrunk by an average of per month, and in recent months this accelerated to a steady decline of However, the current inventory is now thought to be near steady-state levels, i.
The easy increases in production from DUCs is over. Primary Menu. Search for: Search. May 14, Realty News Report Copyright Houston No.
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