At the November 13th symposium, the IRF released its most recent updated short-term forecast for the Houston regional economy. Those in attendance should know that the forecast graphs shown in the symposium handouts were those completed in mid October because of a printing deadline. A week before the symposium, the IRF’s forecasting model was rerun with more up-to-date information then available. This altered the forecasts slightly. The actual PowerPoint slide presentation at the symposium included the updated numbers. We are now including in this issue of Houston Update the actual forecasts so there is no confusion among our symposium guests.
After 3 consecutive years of stellar growth and a solid year last year, Houston is expected to see modest job declines in 2009. The IRF forecasts an estimated 3.96% job loss in mining, 4.04% in manufacturing, 2.16% in finance and real estate. This will lead to a .42% decline in overall employment which translates into about 10,000 jobs. That compares with a .60% loss in jobs in 2002 and 2003 in the aftermath of 9/11 and the fall of Enron.
Mining, manufacturing, and construction are expected to continue to lose jobs in 2010, so the Houston economy will remain anemic that year as well, squeezing out a mere .6% job growth overall. Furthermore, we warned those in attendance that the regional economy could do even worse if we don’t at least see some signs of a stabilization in the national economy by spring. Signs to look for that might indicate a stabilizing economy would be growth in M2 of at least 10%; a reduction in initial claims for unemployment falling towards 400,000; a partial recovery in stocks with the S&P 500 hovering near 1,000; and for Houston in particular, oil prices rebounding to $70 per barrel and natural gas prices holding above $6.50/mcf.
|