GHP: The Economy at a Glance - October 2010

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GHP: The Economy at a Glance - October 2010

  1. 1. A publication of the Greater Houston Partnership Volume 19, Number 10 • October 2010 The Recession’s Over? — When the National Bureau of Economic Research (NBER) announced the recession was over—it officially ended June ’09—the news was met with skepticism. How could it be over with so many people out of work, so many homeowners facing foreclosure, and gross domestic product (GDP) barely growing? To understand why the committee made the announcement, one needs to understand how the committee dates the peaks and valleys of a business cycle. With that knowledge in hand, one can use a similar approach to determine when the recession ended in Houston. NBER’s Business Cycle Dating Committee (BCDC) is the offici- al body that dates the beginning and end of all U.S. business cycles. Economists from five universities—Harvard, MIT, Northwestern, Princeton and Stanford—sit on the committee. They monitor a variety of indica- tors to determine when a busi- ness cycle peaks, begins its de- cline, hits bottom, and enters re- covery. The path of a typical business cycle is shown in the graph on the right. Not Just Two Bad Quarters — The media often defines a recession as a decline in GDP over two consecutive quarters. That’s partially correct. In dating a reces- sion, NBER looks for a significant decline in economic activity spread across the economy, lasting more than a few months and normally visible in real GDP, real income, employment, industrial production, and real wholesale and retail sales. Though unemployment insurance claims and unemployment rates make headlines, they aren’t reliable barometers for dating the business cycle. Unemployment rates tend to remain low in the early stages of a recession and high well into the re- covery. For example, when the previous recession ended in November ’01, the un- employment rate inched up for 19 months before it declined. Nor does NBER rely October 2010 ©2010, Greater Houston Partnership Page 1
  2. 2. HOUSTON—THE ECONOMY AT A GLANCE on unemployment insurance claims to date a business cycle. There is too much “noise” in the data. There is no fixed rule as to when the committee issues its pronouncement. There are lags in reporting the data, frequent errors in measuring change, and often substantial revisions to original estimates. The committee waits for all the data to be in and revisions to be completed, before dating the beginning and end of a recession. It waited 11 months to announce that the cycle peaked in December ’07 and 15 months to announce the recession ended in June ’09. In making its announcement, the committee determined that the trough for real GDP, real manufacturing, real wholesale and retail trade and industrial production occurred in June ’09. The lows for real income and aggregate hours worked oc- curred in October ’09. The bottom for employment was December ’09. Based on those indicators, NBER determined the recession ended 16 months ago. It also issued a caveat: “In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or the economy has returned to operating at normal capacity. Rather, the committee determined only that the reces- sion ended and a recovery be- gan that month,” the official release stated. Nonetheless, the recession is over. The path of the recent U.S. business cycle is shown on the right. Houston Has its Own Indictors — NBER dates the national business cycle. It doesn’t date local recessions. The point in the U.S. business cycle at which an indi- vidual metro slides into recession and emerges from the trough depends on its own economy. Though there is no official organization to date Houston’s business cy- cle, the concepts that NBER applies to the U.S. economy apply to Houston as well. When a recession begins in Houston it is seen across a variety of indicators. Those indicators and the messages they send are explained on the following page. October 2010 ©2010, Greater Houston Partnership Page 2
  3. 3. HOUSTON—THE ECONOMY AT A GLANCE The Houston Purchasing Managers Index (PMI) is a short-term leading indicator of regional economic activ- ity. It is based on a survey of 80 local purchasing execu- tives who are asked about over-the-month changes at their firms in employment, sales production, cost of goods sold, inventories, lead times and prices paid for major purchases. PMI read- ings below 50 signal likely contraction within the next three to four months; read- ings above 50 signal likely expansion. The Houston PMI peaked at 60.6 in June ’08, fell to 39.0 in March of ’09, and returned to 50-plus readings in October ’09. In the graph above, note how closely the PMI mirrors the typical business cycle. The PMI currently stands at 52.5, signaling continued expansion through the end of the year. When the PMI turned up last spring, it was the first indictor to suggest the economy had begun to recover. The Baker Hughes North American Rig Count is a good barometer for the health of the exploration in- dustry. The industry ac- counts for roughly half of Houston’s economic base employment. The base in- cludes those sectors of the economy that export goods and services outside the re- gion. The base must remain healthy if the secondary sectors (stores, restaurants, dry cleaners, etc.) are to re- main healthy. The rig count peaked in September ’08 at 2,014 then plummeted to 895 rigs in June ’09. Drilling activity began to recover in July ’09—four months after the PMI signaled a pending recovery—and averaged 1,656 last month. In the graph above, note how closely the rig count mirrors the typical business cycle. October 2010 ©2010, Greater Houston Partnership Page 3
  4. 4. HOUSTON—THE ECONOMY AT A GLANCE Houston Airport System (HAS) Traffic is weighted toward business travel. Houston is not a leisure destination. In a recession, travel budgets are among the first expenses to be cut. If the economy doesn’t im- prove, jobs, R&D and ca- pital budgets are next. Traffic through HAS peak- ed at 53.3 million pas- sengers (annualized) in July ’08 then fell for 13 consecutive months reach- ing a nadir of 47.6 million passengers in August ’09. As businesses realized they needed face-to-face meet- ings to maintain relationships with existing clients and court new ones, travel bud- gets were restored, though not at pre-recession levels. Starting September ’09, pas- senger traffic began to pick up. In August ’10, annualized HAS traffic exceeded 49.0 million passengers. Though not as pronounced, the typical pattern is clear in the graph above. TexasAuto Facts publish- ed by InfoNation, Inc. of Sugar Land reports local vehicle sales and the Houston Association of Realtors® reports sales of single-family homes. Both are measures of consumer confidence. Consumers don’t make big-ticket purchases or take on long-term debt if uncertain about their fi- nancial future. Vehicle sales peaked at 358,306 annual units in January ’08, fell to 218,710 in December ’09, and have somewhat recovered to 235,504 units in August ’10. Single-family home sales peaked at 73,809 in February ’07, bottomed at 51,666 in August ’09, and rebounded to 54,285 units in August ’10. Both auto and home sales are up from their recession bottoms. October 2010 ©2010, Greater Houston Partnership Page 4
  5. 5. HOUSTON—THE ECONOMY AT A GLANCE Payroll employment is a lagging indicator. It confirms the direction of the economy's move- ments in recent months. Employment in Houston peaked at 2.62 million jobs (seasonally adjust- ed) in August ’08, de- clined for 16 months to 2.51 million jobs in Jan- uary ’10, and began to slowly improve in Feb- ruary. Employment now stands at 2.54 million jobs. It, too, has followed the patterns of the typical business cycle, as the graph above shows. Houston’s Recession is Over — Based on the PMI, rig count, air passenger traf- fic, vehicles sales, home sales and employment, it appears that Houston entered the recession in August ’08, eight months after the U.S. recession began. Houston’s recession appears to have ended in September ’09, three months after the U.S. recession ended. The recovery in employment did not begin until February ’10. This does not suggest that conditions are ideal or that the economy is operating near capacity. It only means that the reces- sion in Houston is over. The path of Houston’s recent business cycle can be seen in the graph above. Houston’s recovery has been much like that of the U.S. so far—a clear bottom but only a gradual return to growth. Given that oil has generally traded between $70 and $80 a barrel for the past 13 months, it’s somewhat surprising that Houston’s recovery hasn’t been stronger. Nationally, the Great Recession has been exac- erbated by the Great Uncertainty—the unknown impacts of health care reform, new financial regulations, possible cap-and-trade carbon legislation, and the pend- October 2010 ©2010, Greater Houston Partnership Page 5
  6. 6. HOUSTON—THE ECONOMY AT A GLANCE ing expiration of the Bush-era tax cuts. Houston continues to deal with uncertain- ties of its own—the impact of the offshore drilling moratorium and potential lay- offs at NASA. In spite of all that, Houston’s recovery has begun. The question re- mains: how long before consumers feel comfortable spending and businessmen feel comfortable investing and hiring again? Job Market Recovering — The Texas Workforce Commission (TWC) reports that the 12-month job loss for the Houston-Sugar Land-Baytown Metro Area fell to 900 jobs, or less than 0.1 percent, from August ’09 to August ’10. As recently as November ’09, the 12-month loss stood at 103,800 jobs. The loss has declined con- sistently over the past eight months and if the trend continues Houston’s 12-month job count should turn positive next month. Austerity measures at local school districts are evident in the August employment numbers. Employment in local education fell by 5,100 in August ’10, a month when payrolls traditionally grow by 3,000 to 6,000 jobs. Gains in other sectors could not offset the steep losses in this sector. Private sector employment continues to recover. The region added 5,700 private sector jobs in August ’10. The 12-month loss has fallen to 6,300 jobs this year compared to a 12-month loss of 71,500 jobs the same time last year. Since January ’10, the private sector has added 49,600 jobs. However, this should be taken with a note of caution. First, the numbers are not seasonally adjusted. Second, they are subject to change when TWC issues its benchmark revisions in March ’11. But the data do suggest the economy is into recovery and that employment is beginning to rebound. Several sectors continue to perform well. Health care and social assistance added 8,700 jobs over the past 12 months and 22,500 jobs since the recession began, though the rate of job growth appears to have tapered off in recent months. Oil and gas extraction added 2,500 jobs over the past 12 months and 4,200 since the reces- sion began. The industry seems to grow by 100 to 300 jobs every month regardless of what’s happening in Washington, D.C. or the Gulf of Mexico. Manufacturing continues to recover, having added 4,500 jobs since the first of the year, yet em- ployment remains 23,800 jobs below the previous peak. Most of the recovery has occurred in durable goods manufacturing, up 2,500 jobs over the year, while em- ployment in non-durable goods manufacturing is down by 1,500 jobs over the year. Several sectors continue to struggle. The construction industry lost 11,200 jobs over the past 12 months. While one month does not make a trend, construction did add 700 jobs in August ’10 and is up by 1,200 jobs since January ’10. The industry has a long way to go, however, before it recovers the nearly 40,000 jobs lost during the recession. Strong employment growth in other sectors is needed to spur the demand for housing, office and industrial space which in turn would generate construction jobs. October 2010 ©2010, Greater Houston Partnership Page 6
  7. 7. HOUSTON—THE ECONOMY AT A GLANCE Hotel Market Stabilizes — The Houston area hotel market has begun to stabilize. Occupancy, average daily rate and revenue per available room (RevPAR) appear to have leveled out and are forecasted to grow in ’11. Hotel occupancy was at 57.6 percent in Q2/10, up slightly from 56.8 percent in Q1/10, Colliers PKF Consulting reports. The average daily rate in Houston hotels in Q2/10 was $95.17, 1.4 percent above Q1/10 rates. RevPAR, a measure that com- bines occupancy and room rate, averaged $54.84 in the quarter, up 2.9 percent from Q1/10. Colliers PKF Consulting expects occupancy to remain relatively flat for the re- mainder of ’10 due to new rooms coming into the market. Although many projects were put on hold or canceled with the onset of the recession, projects that had started prior to the recession continued as planned. Supply of new rooms is pro- jected to rise 6.7 percent in ’10, but then slow to a 3.1 percent increase in ’11 and 1.8 percent in ’12. “2010 has ushered in cautious optimism among Houston hotels. Occupancies and average daily rates have seemed to flatten out and appear ready to start growing in a positive direction,” says Randy McCaslin in Colliers PKF’s Texas Trends. Over 100,000 Hispanic-Owned Firms in Houston Region — The number of Hispanic firms in the Houston region more than doubled from ’97 to ’07, ac- cording to data released this month by the U.S. Census Bureau. In ’97, Hispanics owned 44,632 businesses and represented 12.4 percent of all firms in the region, while in ’07, there were 104,370 Hispanic-owned firms, accounting for 20.0 per- cent of all firms. Even with the growth in the number of Hispanic-owned businesses in the metro area, Hispanics, based on their share of the region’s population, are underrepresented in the business community. Hispanics represent 34.4 percent of the region’s population, but own only 20.0 percent of the region’s businesses. The majority of Hispanic firms are small. The Census distinguishes between “em- ployer” and “non-employer” firms. Employer firms have payrolls and paid em- ployees, while non-employer firms consist of self-employed individuals operating very small unincorporated businesses. Non-employer firms account for 93.3 per- cent of Houston’s Hispanic-owned firms and employer firms represent 6.7 percent. Hispanic firms in Houston reported $16.5 billion in revenue in ’07, 1.8 percent of the region’s total revenue. Hispanic-owned firms in the wholesale trade and con- struction industries accounted for nearly half of total Hispanic business revenue. Wholesale trade accounted for 30 percent, while construction firms represented 18 percent. October 2010 ©2010, Greater Houston Partnership Page 7
  8. 8. HOUSTON—THE ECONOMY AT A GLANCE Data on Asian-owned, Black-owned and women-owned businesses is set for re- lease in late ’10 and early ’11. More People Flying — The Houston Airport System (HAS) served 4.4 million passengers in August ’10, bringing its 12-month total to 49.0 million passengers. This represents a 2.8 percent increase in total passengers from August ’09. International travel continues to be the main contributor to this growth with a 7.8 percent increase over the last 12 months. Domestic travel increased by 1.9 percent over the same period. Air freight volumes also continue to grow. HAS handled 74.7 million pounds of air freight in August ’10, up 20.0 percent from August ’09. Year-to-date, HAS has handled 582.6 million pounds of air freight, up 18.0 percent compared to the same eight-month period last year. Trade Continues to Grow — The Houston-Galveston Customs District handled $118.7 billion in trade over the first seven months of this year, up 29.8 percent from $91.4 billion during the same period last year. Exports totaled $52.1 billion, up 26.4 percent from ’09, and imports totaled $66.5 billion, up 32.6 percent from the same period last year. Five commodities accounted for 73.7 percent of all exports through Houston so far this year: non-crude oil ($14.7 billion), industrial machinery ($9.6 billion), organic chemicals ($7.7 billion), plastics ($3.9 billion) and electric machinery ($2.4 bil- lion). Five commodities accounted for 84.8 percent of all imports through Houston so far this year: crude oil ($45.1 billion), industrial machinery ($5.0 billion), iron and steel ($2.7 billion), organic chemicals ($2.1 billion) and electric machinery ($1.4 billion). Houston’s top 20 trade partners generated 71.6 percent of the region’s total trade. All but three are showing increases in trade during the first seven months of ’10, compared to the same period last year. Patrick Jankowski, Marycruz García and Jenny Hsu contributed to this issue of The Economy at a Glance. ____________________________________ The Greater Houston Partnership is the primary advocate of Houston’s business community and is dedicated to building regional economic prosperity. Visit the Greater Houston Partnership on the World Wide Web at www.houston.org. Contact us by phone at 713-844-3600. October 2010 ©2010, Greater Houston Partnership Page 8
  9. 9. HOUSTON—THE ECONOMY AT A GLANCE Houston Economic Indicators YEAR-TO-DATE A Service of the Greater Houston Partnership MONTHLY DATA TOTAL OR AVERAGE* Most Year % Most Year % Month Recent Earlier Change Recent Earlier Change ENERGY U.S. Active Rotary Rigs Aug '10 1,638 973 68.3 1,474 * 1,091 * 35.1 Spot Crude Oil Price ($/bbl, West Texas Intermediate) Aug '10 76.17 71.08 7.2 77.47 * 55.90 * 38.6 Spot Natural Gas ($/MMBtu, Henry Hub) Aug '10 4.24 3.01 40.9 4.61 * 3.86 * 19.4 UTILITIES AND PRODUCTION Houston Purchasing Managers Index Aug '10 52.5 46.8 12.2 54.9 * 41.9 * 31.0 Nonresidential Electric Current Sales (Mwh, CNP Service Area) Aug '10 4,656,313 4,851,837 -4.0 33,199,596 32,951,667 0.8 CONSTRUCTION Total Building Contracts ($, Houston MSA) Aug '10 543,396,000 734,116,000 -26.0 5,615,808,000 6,060,397,000 -7.3 Nonresidential Aug'10 188,910,000 337,763,000 -44.1 2,150,570,000 2,755,694,000 -22.0 Residential Aug '10 354,486,000 396,353,000 -10.6 3,465,238,000 3,304,703,000 4.9 Building Permits ($, City of Houston) July '10 264,381,291 391,776,848 -32.5 1,915,292,501 2,441,359,244 -21.5 Nonresidential July '10 200,339,600 291,032,204 -31.2 1,276,957,838 1,891,272,020 -32.5 New Nonresidential July '10 80,418,076 206,294,123 -61.0 429,393,202 779,950,337 -44.9 Nonresidential Additions/Alterations/Conversions July '10 119,921,524 84,738,081 41.5 847,564,636 1,111,321,683 -23.7 Residential July '10 64,041,691 100,744,644 -36.4 638,334,663 550,087,224 16.0 New Residential July '10 48,077,428 72,165,892 -33.4 488,185,903 402,091,142 21.4 Residential Additions/Alterations/Conversions July '10 15,964,263 28,578,752 -44.1 150,148,760 147,996,082 1.5 Multiple Listing Service (MLS) Activity Closings Aug '10 4,977 5,873 -15.3 42,135 41,669 1.1 Median Sales Price - SF Detached Aug '10 159,000 160,000 -0.6 154,201 * 150,644 * 2.4 Active Listings Aug '10 55,079 46,023 19.7 50,652 * 45,482 * 11.4 EMPLOYMENT (Houston-Sugar Land-Baytown MSA) Nonfarm Payroll Employment Aug '10 2,511,200 2,512,100 0.0 2,507,500 * 2,546,800 * -1.5 Goods Producing (Natural Resources/Mining/Const/Mfg) Aug '10 480,100 487,500 -1.5 474,800 * 505,100 * -6.0 Service Providing Aug '10 2,031,100 2,024,600 0.3 2,032,700 * 2,041,700 * -0.4 Unemployment Rate (%) - Not Seasonally Adjusted Houston-Sugar Land-Baytown MSA Aug '10 8.8 8.4 8.6 * 7.3 * Texas Aug '10 8.4 8.1 8.3 * 7.5 * U.S. Aug '10 9.5 9.6 9.9 * 9.1 * Unemployment Insurance Claims (Gulf Coast WDA) Initial Claims Aug '10 23,007 22,922 0.4 22,642 * 26,504 * -14.6 Continuing Claims Aug '10 106,578 150,524 -29.2 108,493 * 132,218 * -17.9 TRANSPORTATION Port of Houston Authority Shipments (Short Tons) Aug '10 3,620,028 2,788,711 29.8 26,357,655 24,298,408 8.5 Air Passengers (Houston Airport System) Aug '10 4,402,074 4,400,473 0.0 33,286,035 32,786,804 1.5 Domestic Passengers Aug '10 3,623,568 3,629,365 -0.2 27,471,664 27,382,854 0.3 International Passengers Aug '10 778,506 771,108 1.0 5,814,371 5,403,950 7.6 Landings and Takeoffs Aug '10 73,693 77,940 -5.4 569,725 596,400 -4.5 Air Freight (000 lb) Aug '10 74,696 62,256 20.0 582,623 493,955 18.0 Enplaned Aug '10 38,085 32,413 17.5 305,064 263,940 15.6 Deplaned Aug '10 36,611 29,843 22.7 277,559 230,015 20.7 CONSUMERS New Car and Truck Sales (Units, Houston MSA) Aug '10 23,399 25,683 -8.9 163,218 146,424 11.5 Cars Aug '10 10,024 13,075 -23.3 73,663 67,738 8.7 Trucks, SUVs and Commercials Aug '10 13,375 12,608 6.1 89,555 78,686 13.8 Total Retail Sales ($000,000, Houston MSA, NAICS Basis) 1Q10 20,456 18,791 8.9 20,456 18,791 8.9 Consumer Price Index for All Urban Consumers ('82-'84=100) Houston-Galveston-Brazoria CMSA Aug '10 195.165 191.687 1.8 193.822 * 190.061 * 2.0 United States Aug '10 218.312 215.834 1.1 217.692 * 213.752 * 1.8 Hotel Performance (Harris County) Occupancy (%) 2Q10 57.6 57.5 55.3 * 60.1 * Average Room Rate ($) 2Q10 95.17 98.64 -3.5 94.50 * 100.52 * -6.0 Revenue Per Available Room ($) 2Q10 54.84 56.72 -3.3 52.30 * 60.43 * -13.5 POSTINGS AND FORECLOSURES Postings (Harris County) Sep '10 4,691 3,385 38.6 35,037 29,047 20.6 Foreclosures (Harris County) Sep '10 1,604 818 96.1 10,502 7,952 32.1 October 2010 ©2010, Greater Houston Partnership Page 9
  10. 10. HOUSTON—THE ECONOMY AT A GLANCE Sources Rig Count Baker Hughes Incorporated Port Shipments Port of Houston Authority Spot WTI, Spot Natural Gas U.S. Energy Information Agency Aviation Aviation Department, City of Houston Purchasing Managers National Association of Houston Index Purchasing Management – Car and Truck Sales TexAuto Facts Report, InfoNation, Houston, Inc. Inc., Sugar Land TX Electricity CenterPoint Energy Retail Sales Texas Comptroller’s Office Building Construction Contracts McGraw-Hill Construction Consumer Price Index U.S. Bureau of Labor Statistics City of Houston Building Permits Building Permit Department, City Hotels PKF Consulting/Hospitality Asset of Houston Advisors International MLS Data Houston Association of Realtors® Postings, Foreclosures Foreclosure Information & Listing Employment, Unemployment Texas Workforce Commission Service STAY UP TO DATE! If you would like to receive this electronic publication on the first working day of each month, please e- mail your request for Economy at a Glance to rpate@houston.org. Include your name, title and phone number and your company’s name and address. Archived copies are available to Partnership Members in the Members Only section at www.houston.org. For information about joining the Greater Houston Partnership and gaining access to this powerful resource, call Member Services at 713-844-3683. The foregoing table is updated whenever any data change — typically, 11 or so times per month. If you would like to receive those updates by e-mail, usually accompanied by commentary, please e-mail your request for Key Economic Indicators to rpate@houston.org with the same identifying information. You may request Glance and Indicators in the same e-mail. October 2010 ©2010, Greater Houston Partnership Page 10
  11. 11. HOUSTON—THE ECONOMY AT A GLANCE HOUSTON MSA NONFARM PAYROLL EMPLOYMENT (000) Change from % Change from Aug' 10 July ' 10 Aug '09 July '10 Aug '09 July '10 Aug '09 Total Nonfarm Payroll Jobs 2,511.2 2,510.8 2,512.1 0.4 -0.9 0.0 0.0 Total Private 2,155.6 2,149.9 2,161.9 5.7 -6.3 0.3 -0.3 Goods Producing 480.1 478.5 487.5 1.6 -7.4 0.3 -1.5 Service Providing 2,031.1 2,032.3 2,024.6 -1.2 6.5 -0.1 0.3 Private Service Providing 1,675.5 1,671.4 1,674.4 4.1 1.1 0.2 0.1 Mining and Logging 90.2 90.1 87.4 0.1 2.8 0.1 3.2 Oil & Gas Extraction 51.5 51.3 49.0 0.2 2.5 0.4 5.1 Support Activities for Mining 37.5 37.6 37.3 -0.1 0.2 -0.3 0.5 Construction 168.4 167.7 179.6 0.7 -11.2 0.4 -6.2 Manufacturing 221.5 220.7 220.5 0.8 1.0 0.4 0.5 Durable Goods Manufacturing 142.2 141.6 139.7 0.6 2.5 0.4 1.8 Nondurable Goods Manufacturing 79.3 79.1 80.8 0.2 -1.5 0.3 -1.9 Wholesale Trade 128.2 128.0 130.2 0.2 -2.0 0.2 -1.5 Retail Trade 261.4 260.3 263.5 1.1 -2.1 0.4 -0.8 Transportation, Warehousing and Utilities 120.5 120.1 121.6 0.4 -1.1 0.3 -0.9 Utilities 16.6 16.6 16.7 0.0 -0.1 0.0 -0.6 Air Transportation 24.0 24.0 24.6 0.0 -0.6 0.0 -2.4 Truck Transportation 18.5 18.5 18.7 0.0 -0.2 0.0 -1.1 Pipeline Transportation 8.9 9.0 8.7 -0.1 0.2 -1.1 2.3 Balance, incl Warehousing, Water & Rail Transport 52.5 52.0 52.9 0.5 -0.4 1.0 -0.8 Information 32.5 32.6 34.4 -0.1 -1.9 -0.3 -5.5 Telecommunications 17.3 17.3 18.0 0.0 -0.7 0.0 -3.9 Finance & Insurance 86.7 86.4 88.0 0.3 -1.3 0.3 -1.5 Real Estate & Rental and Leasing 51.1 51.2 51.0 -0.1 0.1 -0.2 0.2 Professional & Business Services 353.3 352.3 355.1 1.0 -1.8 0.3 -0.5 Professional, Scientific & Technical Services 170.0 169.9 172.7 0.1 -2.7 0.1 -1.6 Legal Services 23.0 23.2 23.3 -0.2 -0.3 -0.9 -1.3 Accounting, Tax Preparation, Bookkeeping 15.6 15.6 16.6 0.0 -1.0 0.0 -6.0 Architectural, Engineering & Related Services 60.8 60.8 60.3 0.0 0.5 0.0 0.8 Computer Systems Design & Related Services 23.6 23.4 24.0 0.2 -0.4 0.9 -1.7 Admin & Support/Waste Mgt & Remediation 162.6 162.4 163.3 0.2 -0.7 0.1 -0.4 Administrative & Support Services 154.8 154.6 155.1 0.2 -0.3 0.1 -0.2 Employment Services 51.4 51.2 52.4 0.2 -1.0 0.4 -1.9 Educational Services 42.2 41.4 41.3 0.8 0.9 1.9 2.2 Health Care & Social Assistance 266.4 264.6 257.7 1.8 8.7 0.7 3.4 Arts, Entertainment & Recreation 30.3 31.2 30.5 -0.9 -0.2 -2.9 -0.7 Accommodation & Food Services 210.2 210.0 208.8 0.2 1.4 0.1 0.7 Other Services 92.7 93.3 92.3 -0.6 0.4 -0.6 0.4 Government 355.6 360.9 350.2 -5.3 5.4 -1.5 1.5 Federal Government 30.2 32.2 28.8 -2.0 1.4 -6.2 4.9 State Government 69.1 69.2 68.4 -0.1 0.7 -0.1 1.0 State Government Educational Services 36.0 36.1 35.0 -0.1 1.0 -0.3 2.9 Local Government 256.3 259.5 253.0 -3.2 3.3 -1.2 1.3 Local Government Educational Services 166.4 171.5 167.0 -5.1 -0.6 -3.0 -0.4 SOURCE: Texas Workforce Commission October 2010 ©2010, Greater Houston Partnership Page 11
  12. 12. HOUSTON—THE ECONOMY AT A GLANCE HOUSTON HOTEL DATA 2000 - 2011 80 115 110 75 AVERAGE OCCUPANCY AND REVPAR, 4 QTR ENDING 105 AVERAGE ROOM RATE, 4 QTR ENDING 70 100 65 95 60 90 55 85 50 80 45 75 Q1/01 Q1/02 Q1/03 Q1/04 Q1/05 Q1/06 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11 Occcupancy Revenue Per Available Room (RevPAR) Room Rate Source: Colliers PKF Consulting (Q1/05 –Q2/10 ), GHP Calculated Qtrly Avg from Hospitality Advisory Services (Q1/00-Q4/04) HOUSTON MSA EMPLOYMENT 2001-2011 2.65 160 2.60 140 2.55 120 NONFARM PAYROLL EMPLOYMENT (000,000) 2.50 100 2.45 80 12-MONTH CHANGE (000) 2.40 60 2.35 40 2.30 20 2.25 0 2.20 -20 2.15 -40 2.10 -60 2.05 -80 2.00 -100 1.95 -120 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 12-MONTH CHANGE JOBS Source: Texas Workforce Commission October 2010 ©2010, Greater Houston Partnership Page 12
  13. 13. HOUSTON—THE ECONOMY AT A GLANCE GOODS-PRODUCING AND SERVICE-PROVIDING EMPLOYMENT HOUSTON MSA 2001-2011 550 2.25 540 2.20 530 2.15 2.10 520 SERVICE-PROVIDING (000,000) 2.05 GOODS-PRODUCING (000) 510 2.00 500 1.95 490 1.90 480 1.85 470 1.80 460 1.75 450 1.70 440 1.65 430 1.60 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 GOODS-PRODUCING JOBS SERVICE-PROVIDING JOBS Source: Texas Workforce Commission UNEMPLOYMENT RATE HOUSTON & U.S. 2001-2011 11 10 9 8 PERCENT OF LABOR FORCE 7 6 5 4 3 2 1 0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-09 Jan-11 HOUSTON U.S. Source: Texas Workforce Commission October 2010 ©2010, Greater Houston Partnership Page 13
  14. 14. HOUSTON—THE ECONOMY AT A GLANCE SPOT MARKET ENERGY PRICES 2001 - 2011 140 28 120 24 HENRY HUB NATURAL GAS ($/MMBTU) WEST TEXAS INTERMEDIATE ($/BBL) 100 20 80 16 60 12 40 8 20 4 0 0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 WTI MONTHLY WTI 12-MO AVG GAS MONTHLY GAS 12-MO AVG Source: U.S. Energy Information Administration INFLATION: 12-MONTH CHANGE 2001-2011 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 HOUSTON CPI-U U.S. CPI-U Source: U.S. Bureau of Labor Statistics October 2010 ©2010, Greater Houston Partnership Page 14

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