According to Robert W. Gilmer, director of the Institute for Regional Forecasting and University of Houston C.T. Bauer College of Business, Houston’s economic future likely holds positive growth this year. However, Gilmer had tempered expectations regarding the size of the growth.
“The big wheel is turning again here for the Houston business cycle. It always turns from bad to good and then swings from good to bad,” Gilmer said. “This time it’s caused by an unexpected event, without question.”
The unexpected event he’s referring to is the announcement last year from Saudi Arabian oil leaders and the Organization of the Petroleum Exporting Countries (OPEC) that they were giving up control of the oil market prices. This action led to uncertainty for Houston’s economy and resulted in layoffs from energy jobs and over half the nation’s drilling rigs being shut down.
“We are America’s oil headquarters. We produce no oil in Houston, but 39 percent of the oil employees in the state of Texas are here,” Gilmer said. “Three things are really crucial right now — the prospects for oil prices, the continued uncertainty that surrounds those prospects of oil prices, and ultimately the implications for Houston’s jobs and real estate.”
Gilmer discussed the other factors that are weighing heavily on the Houston metro area’s future, but he also spoke of the positive potential as well. The Houston metro area is in a construction boom which will help counterbalance the hits across the energy industry.
Gilmer continues to discuss other factors that will heavily influence the health of Houston’s economy in the coming year. If you’re interested in getting some more details on Gilmer’s talk, you can read more in Danielle Ponder’s story on Bauer’s news site.