After several years of extraordinary growth, Houston’s economy will grow at a slower pace in 2015, the Greater Houston Partnership estimates.
GHP’s annual Houston Employment Forecast, released Dec. 11, estimates the metropolitan area will add 62,900 jobs in 2015, and the year should finish with more than 3 million total nonfarm payroll jobs.
That figure seems significantly less than the current pace of growth, in which Houston added 120,000 jobs between October 2013 and October 2014, but GHP calls the current pace unsustainable.
For comparison, Houston created an average of 48,600 jobs per year from 1994 to 2013. Even removing the three best years and three worst years, the average is 58,400 jobs per year.
GHP attributes much of the recent economic momentum to the boom in energy and exports, as well as Houston’s population growth. Over the past four years, the city added 500,000 residents, half of which were births and the other half relocations.
Falling oil prices and slower global growth will have a negative impact on Houston’s energy and export sectors next year, but the city will still add another 125,000 residents.
Construction on ethane crackers, chemical plants and liquefied natural gas terminals planned for the region; the opening of William P. Hobby Airport’s new international terminal; and U.S. gross domestic product growth in general will also help Houston’s economy next year.
Here’s where jobs will be added or lost in Houston in 2015:
•Energy: GHP anticipates a significant drop in oil field services (7,900 jobs) and a minor drop in oil and gas exploration (1,300 jobs).
•Construction: Growth expected to slow marginally, with the sector adding 8,200 jobs.
•Manufacturing: Expected to lose 3,300 jobs, as the decline in oilfield equipment and fabricated metals manufacturing will outweigh the increase in demand for chemicals, plastics and other nondurables.
•Wholesale trade: Expected to add 3,500 jobs, though some sectors will struggle
•Retail: Expected to add 6,600 jobs, a slight dip from recent hiring.
•Transportation, warehousing and utilities: Expected to add 2,600 jobs, though the wide variety of subsectors will be affected differently.
•Information: This sector, which includes news media, movies, software and other subsectors, is expected to create only 100 jobs.
•Financial: Expected to slow somewhat, adding 1,900 jobs.
•Professional, scientific and technical services: Growth will slow, with 9,300 jobs added.
•Administrative, support, waste management and remediation services: Expected to add 8,400 jobs, though outsourcing is expected to continue.
•Educational services: Expected to add 1,200 jobs.
•Health care: Expected to add 9,200 jobs.
•Arts, entertainment and recreation: Expected to add 700 jobs.
•Accommodation: Expected to add 1,000 jobs.
•Food services: Expected to add 8,300 jobs, though growth will be tempered compared to recent years.
•Other services: Slower growth expected, with slightly more than 2,200 jobs added.
•Government: Expected to add 1,200 jobs.
Even during periods of prolonged low oil prices, Houston added jobs, GHP’s report concludes. During the 1990s, oil prices averaged about $20, and Houston still added 500,000 jobs, though no individual sector dominated.
“For the third time in three decades, Houston is about to enter an era of relatively low oil prices,” GHP’s report states. “Yet by all measures, Houston is better off now than it was in the ’80s, ’90s or even the past decade. In the short term, growth may slow, but it always rebounds.”