Houston economic outlook remains positive

The Federal Reserve Bank of Dallas recently published its monthly economic outlook for Houston. Highlights were

  • Houston jobs grew at an annualized rate of 3.9% in the first quarter (29,200 jobs). Biggest gains were in professional and business services (13,600), trade, transportation and utilities (3,300) and education and health services (3,300).
  • Year-over-year job growth was 2.1% (64,100).
  • Houston unemployment rate was 4.7% in March (Texas 4.0%, USA 4.1%)
  • Post Hurricane Harvey, construction employment grew at an annualized rate of 4.5% in the first quarter.
  • Total commercial office vacancy rate rose to 23.1%, following completion of new office space. Industrial vacancy rate is tight at 5%.
  • Median house prices dropped slightly to $232,200 but supply remains tight at 3.6 months of sales.

The Fed also published data on the Dallas/Fort Worth metro area. Job growth was 3.2% in the first quarter and the unemployment rate was 3.6%. Worryingly, net absorption of office space was negative for the first time since the second quarter of 2010. The office vacancy rate rose to 20.5% and is likely to rise further as there is 4.9 million square feet under construction, much of it speculative.

https://www.dallasfed.org/research/indicators/hou.aspx

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