Tag Archives: Federal Reserve Bank

Houston economy showed steady growth in 2019

Jobs in Houston in 2019 grew by 1.6 percent (49,000 jobs).  This is according to the latest economic indicators published by the Federal Reserve of Dallas. That rate is actually below the metro’s historical average of 2.1 percent.The main sectors to change were:

  • Professional & business services (+21,400)
  • Education and health services (+10,800)
  • Construction (+8,600)
  • Trade transportation and utilities (-1,700)
  • Mining – meaning E&P (-1,000)



The Houston unemployment rate dropped slightly to 3.7 percent in December. That’s above the Texas and US rates (both 3.5 percent).

According to NAI Partners, the overall Houston office vacancy rate stood at 21.1 % at the end of December. That is down 0.7 per cent on the previous quarter, but up slightly year-on-year. The market actually absorbed 843,000 sq ft in 2019, the highest yearly figure since 2014. This was overshadowed by the 1.7 million sq ft of new office space coming onto the market. Currently, a further 3.3 million sq ft is under construction (38% spoken for).

Houston’s industrial vacancy rate at the end of December was 6.9% (41 million sq ft) , up 1.5% on a year ago. The rising vacancy rate was also caused by 9.6 million sq ft of new construction completed in 2019.

https://www.dallasfed.org/research/indicators/hou/2020/hou2002.aspx

NAI Partners – Houston office Q4 19 Market overview

NAI Partners – Houston Industrial Q4 19 Market overview

 

 

Houston job growth slows as manufacturing jobs lost

Houston jobs grew 3.1 percent annualized over the three months ending in July. Construction increased by 6,500 jobs, transportation, wholesaling and utilities by 6,700 jobs, and Leisure and hospitality by 4,900. However the area lost 1,000 manufacturing jobs and education and health jobs fell by 800.



This is according to the latest research from the Federal Reserve of Dallas which publishes data on the Houston-Sugarland-The Woodlands metropolitan area on a monthly basis.

In the year to July 2019, Houston added 76,400 new jobs, slightly higher than the comparable prior year (68,400 jobs). This included 5,600 manufacturing jobs year-on-year. However manufacturing jobs have dropped by 1,579 since March.

First quarter job growth was revised downwards by 15,000 (wonder if the 2nd quarter will also be revised down later?). Through July, that means that Houston employment has grown at an annual pace of 1.9 percent for 2019. That’s slightly below the historical annual growth rate of 2.1 per cent.

The unemployment rate in Houston rose from 3.6 percent in June to 3.8 percent in July. It’s now back above the US national average of 3.7 percent. The rate in Texas is 3.4 percent.

The Bank use 11 indicators to produce a composite Houston leading index. Compared with the quarter ended April 2019, the index has turned negative. All the index components have declined. However the biggest decline was in new orders for manufacturing which went from an annual 9.9 percent growth rate in the three months to April to a 1.3 percent contraction over the three months ending July.

As a result, the Bank expects more moderate growth for the local economy through the end of the year.

https://www.dallasfed.org/research/indicators/hou/2019/hou1909.aspx

 

 

Houston unemployment rate drops to 4.1%

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

  • Houston employment grew 3.9% over the three months ending in September. Biggest gains were in Construction (8,700 jobs), Manufacturing (6,200) and education and health services (4,900). Last month’s figure was 3.8%.
  • Year-over-year job growth increased to 3.9% in September (116,000). Last month the figures were 3.1% and 93,000 jobs. The September year-over-year figures are a little inflated as a result of some job losses post-Hurricane Harvey.
  • Houston unemployment rate dropped to 4.1% in September. The Texas and US unemployment rates were 3.9% and 3.8% respectively. Two years ago, the Houston unemployment rate was 5.6%.
  • Total new housing starts were up 7.2% year-over-year in the first half of 2018.
  • Office vacancy rates (22.9%) dropped for the first time since 2014. The industrial vacancy rate rose a little to 5.1% but the market remains tight. Apartment vacancies rose to 6.5% (the rate was almost 8% just prior to Harvey).

The Feds conclude that the overall outlook remains positive. Houston’s economy continues to grow at a healthy pace despite signs of a slowdown in its core energy-related sectors.

https://www.dallasfed.org/research/indicators/hou/2018/hou1811.aspx

 

 

Houston added 93,000 jobs in the past year

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

  • Houston employment grew 3.8% over the three months ending in August. Biggest gains were in Construction (13,600 jobs) and education and health services (5,600). Last month’s figure was 2.7%.
  • Year-over-year job growth increased to 3.1% in August (93,000). Last month the figure was 2.7%.
  • Houston unemployment rate dropped to 4.2% in August. The Texas and US unemployment rates were both 3.9%.
  • The outstanding value of loans at banks headquartered in Houston grew at 11.6% from the 2nd quarter of 2017 to the 2nd quarter of 2018. This is slightly lower than the 1st quarter figure of 13.6% but well ahead of the US lending growth of 4.3%.

The Feds conclude that the overall outlook remains positive. Houston’s economy continues to grow at a healthy pace despite signs of a slowdown in its core energy-related sectors.

Separately, JLL reported that the total office vacancy rate for Houston declined for the first time since Q4 2014. The vacancy rate dropped from 24.5% in Q2 to 24.2% in Q3, primarily due to new leasing activity in west Houston.

https://www.dallasfed.org/research/indicators/hou/2018/hou1810.aspx

http://houstonblog.jll.com/houston-office-vacancy-decreases-first-time/

Houston jobs growth accelerates but headwinds are ahead

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

  • Houston jobs accelerated to an annualized rate of 5.5% over the three months ending in June (41,600 jobs). Biggest gains were in professional and business services (11,500), construction (6,800) and manufacturing (4,000). Last month’s figure was 4.8%. Construction jobs surged but the growth in manufacturing abated.
  • Year-over-year job growth increased to 2.9% in June (88,500). Last month the figure was 2.6%.
  • Houston unemployment rate dropped to 4.4% in June. The Texas rate also dropped slightly to 4.0%, while the overall rate in the USA rose to 4.0%.
  • Apartment vacancies declined sharply at the end of 2017 to 5.9%, as flooding forced many people out of their homes temporarily. In the first quarter the rate increased to 6.3%.
  • Vacancy rate for commercial office space is still increasing and now stands at 23.1%. Industrial vacancy rates remain low at 4.9%.

The Feds expect the expansion rate in Texas to slow in the second half of the year due to a tight labor market and a slowing in export growth. Additionally growth in Houston will moderate as Hurricane-Harvey induced activity dissipates in the second half of the year.

The Feds also report that ‘Numerous business contacts across a wide range of industries are expressing concern about the impact of the ongoing trade disputes on future growth and prices.’

https://www.dallasfed.org/research/indicators/hou/2018/hou1808.aspx

Houston economic growth accelerates

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

  • Houston jobs grew at an annualized rate of 4.0% over the three months ending in May (30,500 jobs). Biggest gains were in professional and business services (11,200), manufacturing (4,800) and education and health services (3,000).
  • Year-over-year job growth accelerated to 2.6% in May (77,000).
  • Houston unemployment rate dropped to 4.5% in March (Texas 4.1%, USA 3.8%)
  • 2017 job gains were revised downwards slightly to 1.7% (51,100)
  • Exports of oil and gas, including LNG were up 67% from Jan-April, compared to the same period last year. Year-to-year growth in exports of chemicals through April slowed to 5.8% compared to 10.5% in 2017.

Last week, Gov Greg Abbott sent a letter to President Donald Trump in which he warned that tariffs on foreign steel, aluminum and other products risk slowing economic growth in Texas. Texas imported more than $8.3 billion in steel and aluminum last year, much of it pipe that cannot be manufactured in the US. In addition Gov Abbott pointed out that Texas exports $8 billion of tariff-eligible goods to China.

More tariffs between the US and China are set to take effect July 6.

If the tariffs go into effect, it will be interesting to see how long it takes for the effect to show up in the economic indicators for Houston.

https://www.dallasfed.org/research/indicators/hou/2018/hou1807.aspx

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

Houston records strong employment growth in June

The Federal Reserve Bank of Dallas has issued its June report for the Houston metropolitan area and the statistics were generally positive.

Federal Reserve Bank of Dallas – Houston economic indicators

The Houston Business-Cycle Index expanded at an average rate of 3.2% so far in 2017, in line with its historical average and substantially better than the 1.8% decline throughout most of 2016. (The Business cycle index is a composite of leading and lagging indices which is used to forecast changes in the direction of the overall economy).

The Houston metro area has added 33,175 new jobs in the first 6 months of 2017 (2.2% annualized growth). The unemployment rate in June was 5.1%, below the YTD average of 5.4% and slightly below the June 2016 figure of 5.3%. Total job ads surged in June, suggesting healthy employment growth through September. The Feds noted that total job ads have been negative for 31 of the past 32 months.

The inventory of homes for sales rose from 3.6 months of supply in January to 4.1 months in June, while the median price of homes sold has been flat since peaking in February. This suggests the housing market is experiencing a modest cooling.

Construction, both commercial and multi-family are declining since peaking in 2015 and 2016 respectively. This is causing job losses for construction workers, particularly as the petrochemical construction boom is beginning to wind down.

Office vacancy rates were 21.4% in the second quarter, the highest since 1993. The apartment vacancy rate bottomed out in Q1 and was 7.8% in Q2.

Texas employment grew at a 2.8% annualized rate in the second quarter, higher than the national rate of 1.6%.