Houston Economic Update

by CoyDavidson on December 12, 2014

iStock_OffshoreRig

Lower Energy Prices Soften 2015 Outlook

The Houston commercial real estate market has been on an extended run thanks primarily to high energy prices and a drilling boom. The blistering Houston economy has created a boom for Houston office space construction. Office space is leasing up quickly in Texas and rents are appreciating and healthy levels.

West Texas Intermediate broke below $60 a barrel Thursday and today Baker Hughes announced the U.S Rig Count is down 27 from a week ago. While a WSJ survey this past week indicates that oil prices may have bottomed out, Houston is not expected to see the same pace of job growth in 2015 as it has in the last several years. The good news is the Houston economy just isn’t about the Energy Industry, and while job growth will slow, it had to at some point, the economic outlook is still positive.

Dallas Fed: Houston Economic Indicators – December 2014
The Houston Business-Cycle Index increased 7.7 percent in October after climbing a revised 10.8 percent in September. Indicators for manufacturing and service industries improved. Energy prices have continued to ease since July but haven’t taken the steam out of Houston’s economic engine. In the context of positive national indicators, recent data suggest that the Houston economy is growing rapidly… read the full report

Houston Economy at a Glance – December 2014
This year began with great promise. Houston had finished four years of robust job growth.Home, auto and retail sales were near record levels. And traffic through the Houston Airport System and the Port of Houston continued to grow. But in June, oil prices began to slip. Houstonians, always optimistic, shrugged off the decline as a temporary phenomenon. But then oil prices continued to fall, and by November they had lost 40 percent of their mid-year value. Now everyone in Houston … read the full report

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