Houston’s Labor Market Title Goes Here Houston’s Labor Market By Firstname Lastname

Houston Labor Market Overview Economy Population The structure of Houston’s labor market Drivers of recent job growth and losses Short-term outlook for job growth Long-term outlook for job growth

Houston - Fourth Largest Economy 2014 Gross Domestic Product of 525.4 Billion 31st Largest economy if it were a country Houston is the 4th largest economy in the U.S. with a GDP of 525.4 billion in 2014. If it were a nation it would rank the 31st in the world, larger than Norway, Venezuela, and Columbia to name a few. The economy, long dominated by oil and gas exploration and production, continues to become increasingly diversified. Home to the largest medical center in the world. Its central southern location with easy access to the Port of Houston makes it an ideal distribution point ranking 1st in the nation for U.S. foreign tonnage presenting opportunities for numerous maritime, railroad, airline, and motor freight companies. With living costs some 19 percent below the average for major metropolitan areas it ranked number one in the number of housing starts in the U.S in 2015. Source: U.S. Bureau of Economic Analysis

Leads the Nation in Population Growth Home to Houston MSA 2015 Population 6.7 Million Leads the Nation in Population Growth Adding 159,000 Residents July 2014 to July 2015 4 Texas Metro Areas Lead Pop. Gains among Top 20 #1 Houston #2 Dallas #14 Austin #15 San Antonio Houston MSA 4th Largest U.S. City 5th Largest U.S. Metro Area Population as of July 2015: 6.7 million +709,000 Residents July 2010 to July 2015 Houston leads the U.S. in population gains adding nearly 160,000 residents between 2014 and 2015.

Makeup of Houston’s Economy 3 million jobs total as of June 2016 3 Major Sectors with Jobs Related to Oil & Gas 26% of Total Emp. Houston is home to some 3 million jobs, with approximately 26% of them closely related to oil and gas.

Strong Job Growth Until 2015 H-W-S MSA Most Recent Peak 4.6% February 2013 4 Texas Metro Areas Lead Pop. Gains among Top 20 #1 Houston #2 Dallas #14 Austin #15 San Antonio Houston MSA 4th Largest U.S. City 5th Largest U.S. Metro Area Population as of July 2015: 6.7 million +159,000 Residents July 2014 to July 2015 Crude Prices Crash! The pace of job growth in Houston began a rapid decline by early 2015 with the number of jobs up a mere 0.2 percent by June.

Houston vs U.S. Seasonally Adjusted Growth Since Recession But, comparing current job levels to pre-recession highs we find that Houston continues to outpace the nation with the number of jobs up 13.0% over its pre-recession high compared to the nation’s 4.1%.

What’s driving Houston’s job growth and losses?

Drivers of Houston’s Job Growth Houston added 54,400 jobs over the past year 38.4% from Leisure and Hospitality 34.4% from Educational and Health Services 15.1% from Government Houston lost 49,200 jobs over the past year 31.5% from Professional and Business Services 30.9% from Manufacturing 27.6% from Mining and Logging 54,400 – 49,200 = Net Gain of 5,200 jobs

Change in Jobs by Industry 2015-2016 Consumer and Population Driven Job Growth Virtually all of the most recent job growth has been tied to our regions rapid population growth.

Energy Losses are Accumulating Mining and Logging Energy Losses are Accumulating Mining and Logging 25,300 Durable Goods Manufacturing 33,500 Professional and Business Services 17,400 Total 76,200 Since crude oil prices have collapsed we have lost some 76,000 energy related jobs.

Mining and Logging Down 22.6% during current downturn compared to a 13.6% decline during the Great Recession. The good news is that the rate of losses have been started to decline, down 7,600 jobs ytd as of June compared to a loss of 11,700 in 2015.

Durable Goods Manufacturing Down 18.7% during current downturn compared to a 14.7% decline during the Great Recession. Like Mining and Logging, the rate of losses have also declined considerably in durable goods mfg, down 6,600 jobs ytd as of June compared to a loss of 15,000 in 2015.

Professional and Business Services 11,100 of the jobs lost were in Architectural, Engineering and Related Services.

Labor Force and Unemployment The rate of unemployment in the MSA has steadily increased surpassing the rate of unemployment at the national level in April, currently nearly one-half a percentage point higher than the U.S. and seven-tenths of a percentage point higher than one year earlier. June 2016 May 2016 June 2015 Civilian Labor Force 3,285,288 3,264,176 3,257,658 Total Employed 3,105,339 3,106,896 3,100,165 Unemployed 179,949 157,280 157,493 Unemployment Rate 5.5% 4.8%% 4.8%

What does the near future hold?

Houston Jobs Forecast - 2016 and Beyond Source: University of Houston - Institute for Regional Forecasting

What’s the long-term outlook? 2012 to 2022

13-County Gulf Coast Region +712,000 new jobs over 10-year period 2015 Average Annual Wages: $51,605 71,245 new job openings each year 141,000 total job openings each year 141,000 total job openings each year

Top 10 Industries Adding Most Jobs 6 of 10 industries projected to add the most jobs are driven by population growth. About 186,000 jobs. 3 of 10 have close ties to oil and gas exploration and production. About 79,500 jobs.

2015 Average Annual Wages: $51,605 Population Growth Will Continue Regardless of Oil Prices! Health Care Repair and Service Companies Restaurants 2015 Average Annual Wages: $51,605 141,000 total job openings each year +712,000 new jobs over 10-year period Education Port Activity (shipping, trucking, rail, warehousing, logistics) While oil production has finally started to decline, there are a number of uncompleted wells ready to be completed that will slow the rate of decline prolonging low oil prices. As a result, many place odds in favor of $40 a barrel in the near future with $60 possible sometimes in the next 3 years. But rest assured, oil pricing forecasts are quite unpredictable in todays market. Basically, prices will need to come back to the $70 range to encourage healthy recovery and even at that price, some will return while others will not. Luckily, population growth will continue regardless of oil prices driving growth in many sectors of the Houston economy. Retail Trade Petrochemicals Personal Care Construction