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Houston Economic Update October 2011

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A publication of the Greater Houston Partnership


Volume 20, Number 10  October 2011
Houston Recessions Mar ’81 – Jan ’87 Oil price crash, local savings & loan debacle Jun ’91 – Jan ’92 First Gulf War, consumer pessimism Jun ’01 – Jun ’03 Dot.com bubble, Y2K, 911 and Enron Dec’08 – Jan ’10 Global financial crisis Houston Employment Booms Jan ’80 – Mar ’82 235,000 net new jobs July ’96 – Dec ’98 250,600 net new jobs Jan ’05 – Oct ’08 324,000 net new jobs Houston Employment Busts Apr ’82 – Aug ’83 163,800 jobs lost Jun ’85 – Jan ’87 133,800 jobs lost Dec ’08 – Jan ’10 156,800 jobs lost Houston Housing Starts ’87: 7,720 single-family homes ’06: 55,080 single-family homes Houston Home Sales (12-month total) Jan ’84: 12,878 Feb ’07: 88,504 Oil Prices $/barrel, monthly average, WTI Dec ’98: $11.35 Jun ’08: $136.95 N. American Rig Count, monthly average Apr ’99: 499 Dec ’81: 4,520
Sources: Texas Workforce Commission, CDS Market Research, Houston Association of Realtors, U.S. Energy Information Administration and GHP internal databases

When will Houston’s economy return to normal? — To answer that question, one must first define what‘s ―normal‖ for Houston1. That poses a challenge considering that over the past 30 years Houston has slogged through four recessions, sprinted through three employment booms, endured three employment busts, and watched a host of industries—housing, construction, manufacturing, real estate, energy and trade—soar, plummet, rebound and soar again. Watching Houston‘s economy makes one dizzy. In spite of the vertigo, the region has compiled an impressive record over the past 30 years. Since 1981, Houston has:
      

Added 2.8 million residents, Created more than one million jobs Built 760,000 single-family homes Sold more than 7.6 million vehicles Erected 75 million square feet of office space Handled 4.7 billion tons of cargo Served more than 1 billion air passengers.

Rather than asking what‘s ―normal‖ for Houston, a better question might be ―What‘s sustainable for Houston?‖ Or given the current economic uncertainty, perhaps we should ask, ―What should Houston reasonably hope for?‖ This newsletter attempts to answer those questions for housing, construction, energy and employment.

1

Unless otherwise noted, ―Houston‖ refers to the Houston-Sugar Land-Baytown Statistical Area, which consists of Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto and Waller Counties. October 2011 ©2011, Greater Houston Partnership Page 1

HOUSTON—THE ECONOMY AT A GLANCE Home Construction — Household formation and the need to replace obsolete units drives home construction. Three factor— in-migration, young adults leaving the nest and couples splitting up—drive household formation. If one can gauge the pace of household formation, one can gauge the demand for new homes and apartments. A look at the data for the past decade shows how badly we misread the meter. According to the U.S. Census Bureau, Houston added 414,373 households during the ‘00s, or about 41,400 per year. Census data also show that 63 percent of all Houstonarea housing units are owner-occupied and 37 percent are renter-occupied. That suggests Houston needed net additions (new construction less losses due to destruction and conversion to nonresidential uses) of about 26,100 single-family and 15,300 multi-family housing units each year during the ‘00s. In reality, Houston overbuilt houses and under-built apartments. The region added 488,600 housing units—37,400 single-family homes and 11,400 multi-family units each year—from ‘01 to ‘10, according to the Census Bureau2. Subprime financing distorted market signals, tipping the balance toward single-family construction and away from multi-family. Construction Permits, Single- and Multi-Family Homes Two years into the recovHouston Metro Area 71.7 ery, the market continues 63.3 62.1 to correct itself. As of late 56.0 53.3 August, the region was on 47.1 pace to build about 18,000 42.7 37.6 single-family homes and 27.3 27.5 9,000 apartment units this year. Over the long run, however, home construction '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 should keep pace with Source: U.S. Cenus Bureau household formation, and household formation should mirror the past decade. Woods & Poole Economics, a Washington-based forecasting firm, expects the region to add about 42,000 new households per year though ‘20. The University of Houston‘s Institute for Regional Forecasting (IRF) expects Houston to add about 44,000 households per year over the same period3. That implies an annual need to add 25,000 to 28,000 single-family units and 15,500 to 16,500 multi-family units per year—when the market returns to normal.
2 3

Annual averages may not equal the 10-year total due to rounding. The Woods & Poole forecast is for the 10-county metro area. The IRF forecast is the Houston Primary Metropolitan Statistical Area which includes Chambers, Fort Bend, Harris, Liberty, Montgomery and Waller counties but excludes Austin, Brazoria, Galveston and San Jacinto counties. October 2011 ©2011, Greater Houston Partnership Page 2

Units, 000s

HOUSTON—THE ECONOMY AT A GLANCE Home Sales — The subprime fiasco disrupted the resale market as well. In the 12 months ending February ‘03, local realtors sold about 58,900 homes. By February ‘07, the 12-month totaled had jumped to 88,500 units, a 50 percent increase in four years. While ‘03 may have been an underperforming market—Houston had just come off a shallow recession—the sales pace of early ‘07 was clearly untenable. So what is sustainable? That depends on a host of factors—the number of first-time homebuyers entering the market, existing home owners seeking to upgrade, emptynesters wanting to downsize, the supply of homes under construction, mortgage rates and household formation. The volume of single-family construction is closely tied to the number of existing homes resold, and visa versa. In fact, the two sectors complement and compete with each other, so much so that over the past 20 years resale activity has moved in tandem with new home construction. From ‘92 to ‘07, the ratio of housing starts to resales has been fairly consistent—1.5 to 2.1 resales for every new home built. The 20-year average is 1.8 to 1. Only in the past three years has the ratio diverged, with 2.7 resales for every single-family home built. The shift in the ratio Houston Area Single-Family Starts & MLS Home Sales suggests that the re100 sale market is faring Single-Famiy Starts MLS Sales 90 better than the con80 struction market. 70 HAR reported that 60 Houston area realtors 50 40 sold 61,640 properties 30 between August ‘10 20 and August ‘11. While 10 that is a far cry from 0 the pace of ‘06-‘08, ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 one must remember Sources: CDS Market Research and Houston Association of Realtors those weren‘t normal years. Those sales were fueled by subprime financing. If growth in the resale market had kept the pace set from ‘00 to ‘03, in which the market grew by 1,500 to 3,000 closings per year, MLS sales in ‘07 would have topped out around between 70,000 and 75,000 units, rather than the nearly 84,000 that were tallied. Given that the market is in recovery mode, the 61,640 homes sold in the 12 months ending August ‘11 is what should be expected, with growth of 2,000-4,000 units per year— a sustainable pace in the near term. Construction — Through the first four years of the past decade, Houston averaged $7.8 to $8.9 billion a year in construction contracts. When subprime financing kicked in, residential construction skyrocketed. When oil prices spiked, nonresidential conOctober 2011 ©2011, Greater Houston Partnership Page 3 Units, 000

HOUSTON—THE ECONOMY AT A GLANCE struction took off. But as subprime financing dried up and oil prices fell, all construction plummeted. If the Houston Area Construction Activty pre-recession average is considered normal, Nonresidential Residential 16 Houston should log 14 about $3.1 billion in 12 commercial and $5.1 in residential construction 10 in a typical year. The 8 region is on pace to log 6 $2.7 billion in commer4 cial and $4.1 billion in 2 residential construction 0 this year. The projected '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 11* total of about $6.8 bilSource: McGraw Hill Construction * projected lion is well below what would be considered normal. Energy – Supply and demand determines oil prices, and a host of factors influences supply and demand. Spot prices, expectations of future prices, exchange rates, capacity in the Organization of Petroleum Exporting Countries (OPEC), non-OPEC capacity, geopolitics, weather, exploration costs, production costs, planned investments in exploration and production and industry innovations (like hydraulic fracturing) determine supply. Economic growth, industrial production, business and personal transportation trends, weather and innovations (like hybrid vehicles) determine demand. The challenge is for oil prices to remain high enough to stimulate exploration (and Houston‘s economy) but not so high that they stifle U.S. economic growth (which would slowdown Houston‘s economy.) The University of Houston‘s IRF estimates that half of all jobs in the economic base—those sectors that export goods and services outside the region—are tied to the energy industry. According to the Wall Street Journal, every $10 increase in the cost of a barrel of oil translates into a 25 cent per gallon increase at the pump and reduces Gross Domestic Product growth by 0.2 percent. Most forecasts for next year call for oil prices to fall, but not dramatically. The U.S. Energy Information Administration forecasts West Texas Intermediate (WTI), the U.S. benchmark crude, to average $94.50 in ‘12. As recently as July, EIA forecast WTI to average $108 per barrel. What‘s most important is for oil prices to remain sufficiently high to support the current healthy level of drilling activity. Much of Houston‘s recent job growth is due to strong demand for oil-field services.
$ Billions

October 2011

©2011, Greater Houston Partnership

Page 4

HOUSTON—THE ECONOMY AT A GLANCE According to the EIA, the three-year (‘07-‘09) average cost for finding and producing oil in the United States was $31.38 onshore and $51.60 offshore. Remember, this was the average. Exploration in the deep water offshore and the use of hydraulic fracturing onshore significantly raises the cost of exploration and production. So what level of oil prices should Houstonians hope for? As a rule of thumb, oil priced at $70 - $80 should help to maintain the current level of drilling activity. Oil prices above $100 a barrel, while good for Houston, would be bad for the U.S. as a whole. Employment — Job growth is the most important of all economic indicators. Most adults know what it means to have a job, and unfortunately too many know what it means to lose one. Job growth influences everything—home construction, retail sales, airport traffic, energy prices and tax revenues, to name a few. The lack of job growth plaguing the nation is both a sign and a symptom of a weak economy. But not in Houston. The Texas Workforce Commission (TWC) reports that Houston added 65,600 jobs between August ‘10 and August ‘11. That compares well with historic patterns. Over the past 30 years, nonfarm payroll employment4 in Houston grew at a compound annual growth rate (CAGR) of 1.89 percent. Houston‘s job growth was stable during most of the ‘90s. The region experienced a moderate recession during the first part of the decade but logged consistent job gains thereafter. Nonfarm payroll employment grew at a 2.65 percent CAGR from Jan ‘90 to Jan ‘01. The two CAGRs suggest normal growth for Houston Metro Houston Employment Outlook falls between 47,800 and 67,100 jobs Based on Historic Growth Rates per year. The recent jobs numbers from 1.89 percent CAGR = 47,800 jobs 2.65 percent CAGR = 67,100 jobs TWC place Houston at the high end of Based on Third-Party Forecasts that range. Current job growth also fits with the long-term forecasts of two outside (i.e., not from Houston, thus presumably unbiased) consulting firms. Washington, D.C.-based Woods & Poole forecasts a 2.11 percent CAGR for Houston over the next 10 years. The Perryman Group, a Waco-based firm, forecasts a 2.35 percent CAGR. Based on their projections, job growth for Houston over the coming decade should average 53,300 to 66,000 per year. Again, recent jobs numbers reported by TWC place Houston near the high-end of that range. Clearly, job growth has returned to normal in Houston. □


2.35 percent (Perryman) = 66,000 jobs 2.11 percent (Woods & Poole) 53,300 jobs Most Recent Performance 2.6 percent (Texas Workforce Commission) 65,600 jobs since Aug ‘10

Manufacturing Activity Remains Strong — The Houston Purchasing Managers Index (PMI), a short-term indicator for regional production, rose to 61.3 in August, up

4

―Nonfarm payroll employment‖ is a technical term used by economists to describe the jobs of those employed outside of agriculture and not self-employed. October 2011 ©2011, Greater Houston Partnership Page 5

HOUSTON—THE ECONOMY AT A GLANCE from 58.3 in July. This is also higher than the August '10 reading of 52.5, according to the latest report from the Institute for Supply Management-Houston. The PMI has a possible range from zero to 100. Readings above the neutral point of 50 indicate likely growth in production over the next three to four months; readings below 50 suggest contraction. For the last 12 months, the Houston PMI has ranged from 53.6 in November '10 to 61.4 in May and June. Houston has averaged a PMI of 58.5 over the last 12 months. The Houston PMI is based on eight components: sales, production, employment, purchases, prices paid, lead times, purchased inventory, and finished goods inventory. From July to August, seven categories reported improvement, while finished goods inventory remained unchanged. □


Air Traffic Continues to Grow — The Houston Airport System (HAS) handled 4.47 million passengers in August, up 1.4 percent from the 4.40 million handled in August last year. Domestic passenger traffic rose 2.0 percent, from 3.62 million in August ‘10 to 3.69 million this August. International passenger traffic slipped 1.0 percent, from 778,506 in August ‘10 to 770,716 passengers last month. Month-to-month changes signaled the end of the peak summer travel season. From July to August, domestic passenger volume decreased 6.5 percent and international fell 16 percent. However, year-to-date aviation travel is up 1.4 percent, from 33.29 million travelers in ‘10 YTD to 33.76 million in ‘11 YTD. Freight traffic remains strong at the HAS, which moved 78.3 million short tons in August ‘11, up 3.7 percent from 75.5 million pounds in August ‘10. Such growth is predicted to continue as HAS reports ongoing interest from air cargo carriers for introducing or expanding air service in Houston. □



Region’s Ports Remain Busy — The Houston-Galveston Customs District handled cargo valued at $152.2 billion through the first seven months of ‘11, up 28.2 percent from the $118.7 billion handled during the same period last year. Exports5 totaled $67.0 billion through the first seven months of ‘11, up 28.5 percent from $52.1 billion over the same period last year. Twenty-five commodities accounted for 96.2 percent of all exports through the district. Trade through the first seven months of ‘11 is up in 23 of them. Exports of fuel, organic chemicals and grains accounted for two-thirds of the increase.

5

The top 25 exports include fuel, industrial machinery, organic chemicals, plastics, cereals, electric machinery, vehicles and parts, miscellaneous chemicals, scientific equipment, cotton, articles of iron or steel, rubber, aircraft and parts, inorganic chemicals, beverages, oil seeds, animal and vegetable fats, iron and steel, tools, meat, soap and waxes, pharmaceuticals, perfumes and cosmetics, paper products, and ores. October 2011 ©2011, Greater Houston Partnership Page 6

HOUSTON—THE ECONOMY AT A GLANCE Imports6 totaled $85.2 billion, up 28.0 percent from $66.6 billion over the same period last year. Twenty-five commodities accounted for 96.6 percent of all imports through the district. Trade through the first seven months of ‘11 is up in 22 of them. Shipments of fuel accounted for a little over half the increase. Houston‘s top 20 trade partners7 are responsible for 70.8 percent of total trade value through the customs district. Trade through the first seven months of ‗11 has grown with all 20 countries. □

Patrick Jankowski and Jenny Hsu contributed to this issue of The Economy at a Glance.

STAY UP TO DATE! Are you a Partnership Member? If so, log-in to your account here and access archived issues of Glance available only to members. You can also sign-up for RSS feeds to receive Houston’s latest economic data throughout the month. If you are a non-member and would like to receive this electronic publication on the first working day of each month, please email your request for Economy at a Glance to [email protected] Include your name, title and phone number and your company’s name and address. For information about joining the Greater Houston Partnership and gaining access to this powerful resource, call Member Services at 713-844-3683. The foregoing table is updated whenever any data change — typically, 11 or so times per month. If you would like to receive those updates by e-mail, usually accompanied by commentary, please e-mail your request for Key Economic Indicators to [email protected] with the same identifying information. You may request Glance and Indicators in the same e-mail.

6

The top 25 imports include fuel, industrial machinery, articles of iron or steel, electric machinery, organic chemicals, vehicles and parts, iron and steel, plastics, miscellaneous chemicals, beverages, scientific equipment, inorganic chemicals, rubber, furniture, aluminum products, copper products, gums and resins, ceramic products, textiles, coffee, tea and spices, fruit and nuts, perfumes and cosmetics, toys, games and sport equipment, wood, and special items not classified elsewhere.
7

Mexico, Venezuela, Brazil, Nigeria, Russia, China, Saudi Arabia, Netherlands, Colombia, Germany, United Kingdom, South Korea, Algeria, Iraq, Costa Rica, Chile, Belgium, France, India, and Japan. October 2011 ©2011, Greater Houston Partnership Page 7

HOUSTON—THE ECONOMY AT A GLANCE
HOUSTON MSA NONFARM PAYROLL EMPLOYMENT (000)
Aug '11 Total Nonfarm Payroll Jobs Total Private Goods Producing Service Providing Private Service Providing Mining and Logging Oil & Gas Extraction Support Activities for Mining Construction Manufacturing Durable Goods Manufacturing Nondurable Goods Manufacturing Wholesale Trade Retail Trade Transportation, Warehousing and Utilities Utilities Air Transportation Truck Transportation Pipeline Transportation Balance, incl Warehousing, Water & Rail Transport Information Telecommunications Finance & Insurance Real Estate & Rental and Leasing Professional & Business Services Professional, Scientific & Technical Services Legal Services Accounting, Tax Preparation, Bookkeeping Architectural, Engineering & Related Services Computer Systems Design & Related Services Admin & Support/Waste Mgt & Remediation Administrative & Support Services Employment Services Educational Services Health Care & Social Assistance Arts, Entertainment & Recreation Accommodation & Food Services Other Services Government Federal Government State Government State Government Educational Services Local Government Local Government Educational Services SOURCE: Texas Workforce Commission 2,595.6 2,235.1 504.3 2,091.3 1,730.8 90.7 48.9 38.8 183.3 230.3 150.5 79.8 137.8 266.9 121.9 16.5 24.0 21.4 10.3 49.7 29.7 15.2 88.3 48.4 380.4 178.8 23.1 16.9 58.6 25.8 183.1 170.8 62.0 42.6 274.6 28.2 216.0 96.0 360.5 27.5 67.8 34.8 265.2 175.3 July '11 2,592.4 2,229.5 501.7 2,090.7 1,727.8 91.0 48.9 39.0 181.1 229.6 150.0 79.6 137.9 266.5 123.1 16.6 24.1 21.3 10.4 50.7 29.9 15.1 86.6 47.8 377.6 178.6 23.1 17.0 58.3 25.7 180.3 169.4 61.6 41.9 270.7 29.8 218.4 97.6 362.9 27.8 67.8 34.7 267.3 178.2 Aug '10 2,530.0 2,167.4 473.6 2,056.4 1,693.8 82.0 46.2 34.7 172.9 218.7 141.2 77.5 132.3 263.2 123.4 16.2 23.8 20.7 10.3 52.4 31.8 16.3 87.1 48.8 366.0 176.6 23.2 16.8 59.9 24.6 169.8 161.6 59.7 42.2 267.7 29.4 209.7 92.2 362.6 29.7 69.5 35.8 263.4 177.9 Change from July '11 Aug '10 3.2 5.6 2.6 0.6 3.0 -0.3 0.0 -0.2 2.2 0.7 0.5 0.2 -0.1 0.4 -1.2 -0.1 -0.1 0.1 -0.1 -1.0 -0.2 0.1 1.7 0.6 2.8 0.2 0.0 -0.1 0.3 0.1 2.8 1.4 0.4 0.7 3.9 -1.6 -2.4 -1.6 -2.4 -0.3 0.0 0.1 -2.1 -2.9 65.6 67.7 30.7 34.9 37.0 8.7 2.7 4.1 10.4 11.6 9.3 2.3 5.5 3.7 -1.5 0.3 0.2 0.7 0.0 -2.7 -2.1 -1.1 1.2 -0.4 14.4 2.2 -0.1 0.1 -1.3 1.2 13.3 9.2 2.3 0.4 6.9 -1.2 6.3 3.8 -2.1 -2.2 -1.7 -1.0 1.8 -2.6 % Change from July '11 Aug '10 0.1 0.3 0.5 0.0 0.2 -0.3 0.0 -0.5 1.2 0.3 0.3 0.3 -0.1 0.2 -1.0 -0.6 -0.4 0.5 -1.0 -2.0 -0.7 0.7 2.0 1.3 0.7 0.1 0.0 -0.6 0.5 0.4 1.6 0.8 0.6 1.7 1.4 -5.4 -1.1 -1.6 -0.7 -1.1 0.0 0.3 -0.8 -1.6 2.6 3.1 6.5 1.7 2.2 10.6 5.8 11.8 6.0 5.3 6.6 3.0 4.2 1.4 -1.2 1.9 0.8 3.4 0.0 -5.2 -6.6 -6.7 1.4 -0.8 3.9 1.2 -0.4 0.6 -2.2 4.9 7.8 5.7 3.9 0.9 2.6 -4.1 3.0 4.1 -0.6 -7.4 -2.4 -2.8 0.7 -1.5

October 2011

©2011, Greater Houston Partnership

Page 8

HOUSTON—THE ECONOMY AT A GLANCE
PURCHASING MANAGERS INDEX
HOUSTON & U.S. 2002-2012

70

65

60

55

50

45

40

35

30 Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07
HOUSTON

Jan-08
U.S.

Jan-09

Jan-10

Jan-11

Jan-12

Source: Institute for Supply Management-Houston

HOUSTON MSA EMPLOYMENT
2002-2012
2.65 2.60 2.55 160 140 120 100 80 60 40 20 0 -20 -40 -60 -80 -100 -120 Jan-12

NONFARM PAYROLL EMPLOYMENT (000,000)

2.50 2.45 2.40 2.35 2.30 2.25 2.20 2.15 2.10 2.05 2.00 1.95 Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08
JOBS

Jan-09

Jan-10

Jan-11

12-MONTH CHANGE

Source: Texas Workforce Commission October 2011 ©2011, Greater Houston Partnership Page 9

12-MONTH CHANGE (000)

HOUSTON—THE ECONOMY AT A GLANCE
GOODS-PRODUCING AND SERVICE-PROVIDING EMPLOYMENT
HOUSTON MSA 2002-2012
550 540 2.25 2.20

530 520
GOODS-PRODUCING (000)
510

2.15
2.10

2.05 2.00

500
1.95

490 1.90
480

1.85
470 1.80

460 450
440

1.75 1.70
1.65

430 Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

1.60 Jan-12

GOODS-PRODUCING JOBS

SERVICE-PROVIDING JOBS

Source: Texas Workforce Commission

UNEMPLOYMENT RATE
HOUSTON & U.S. 2002-2012
11 10
9

8

PERCENT OF LABOR FORCE

7 6 5
4

3

2 1 0 Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07
HOUSTON

Jan-08
U.S.

Jan-09

Jan-10

Jan-11

Jan-12

Source: Texas Workforce Commission October 2011 ©2011, Greater Houston Partnership Page 10

SERVICE-PROVIDING (000,000)

HOUSTON—THE ECONOMY AT A GLANCE

SPOT MARKET ENERGY PRICES
2002 - 2012
140 28

120

24

100

20

80

16

60

12

40

8

20

4

0 Jan-02

Jan-03

Jan-04

Jan-05

Jan-06
WTI 12-MO AVG

Jan-07

Jan-08
GAS MONTHLY

Jan-09

Jan-10
GAS 12-MO AVG

Jan-11

0 Jan-12

WTI MONTHLY

Source: U.S. Energy Information Administration

INFLATION: 12-MONTH CHANGE
2002-2012
6%

5%

4%

3%

2%

1%

0%

-1%

-2%

-3% Jan-02

Jan-03

Jan-04

Jan-05

Jan-06
HOUSTON CPI-U

Jan-07

Jan-08
U.S. CPI-U

Jan-09

Jan-10

Jan-11

Jan-12

Source: U.S. Bureau of Labor Statistics October 2011 ©2011, Greater Houston Partnership Page 11

HENRY HUB NATURAL GAS ($/MMBTU)

WEST TEXAS INTERMEDIATE ($/BBL)

HOUSTON—THE ECONOMY AT A GLANCE
Houston Economic Indicators A Service of the Greater Houston Partnership Month ENERGY U.S. Active Rotary Rigs Spot Crude Oil Price ($/bbl, West Texas Intermediate) Spot Natural Gas ($/MMBtu, Henry Hub) UTILITIES AND PRODUCTION Houston Purchasing Managers Index Nonresidential Electric Current Sales (Mwh, CNP Service Area) CONSTRUCTION Total Building Contracts ($, Houston MSA) Nonresidential Residential Building Permits ($, City of Houston) Nonresidential New Nonresidential Nonresidential Additions/Alterations/Conversions Residential New Residential Residential Additions/Alterations/Conversions Multiple Listing Service (MLS) Activity Closings Median Sales Price - SF Detached Active Listings EMPLOYMENT (Houston-Sugar Land-Baytown MSA) Nonfarm Payroll Employment Goods Producing (Natural Resources/Mining/Const/Mfg) Service Providing Unemployment Rate (%) - Not Seasonally Adjusted Houston-Sugar Land-Baytown MSA Texas U.S. Unemployment Insurance Claims (Gulf Coast WDA) Initial Claims Continuing Claims TRANSPORTATION Port of Houston Authority Shipments (Short Tons) Air Passengers (Houston Airport System) Domestic Passengers International Passengers Landings and Takeoffs Air Freight (000 lb) Enplaned Deplaned CONSUMERS New Car and Truck Sales (Units, Houston MSA) Cars Trucks, SUVs and Commercials Total Retail Sales ($000,000, Houston MSA, NAICS Basis) Consumer Price Index for All Urban Consumers ('82-'84=100) Houston-Galveston-Brazoria CMSA United States Hotel Performance (Harris County) Occupancy (%) Average Room Rate ($) Revenue Per Available Room ($) POSTINGS AND FORECLOSURES Postings (Harris County) Foreclosures (Harris County) Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 July '11 July '11 July '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 Aug '11 4Q10 Aug '11 Aug '11 4Q10 4Q10 4Q10 Sept '11 Sept '11 YEAR-TO-DATE TOTAL OR YTD AVERAGE* Year % Earlier Change 1,656 76.32 4.24 52.5 4,656,313 594,242,000 247,134,000 347,108,000 313,152,847 221,465,417 84,789,340 136,676,077 91,687,430 75,503,814 16,183,616 5,058 158,500 55,079 2,530,000 473,600 2,056,400 8.6 8.3 9.5 23,007 106,578 3,620,028 4,402,074 3,623,568 778,506 73,693 75,538 38,841 36,697 23,399 10,050 13,349 26,953 195.165 218.312 51.6 91.29 47.14 4,691 1,604 -9.4 -12.4 -5.6 1.4 2.0 -1.0 -2.1 3.7 6.2 1.0 -4.2 21.9 -23.8 2.5 3.7 3.8 18.2 11.3 -5.0 16.8 -0.7 15.3 24.7 8.6 0.3 -14.8 14.4 -32.9 36.6 41.6 13.1 29.0 0.3 -11.5 2.6 6.5 1.7 Most Recent 1,812 * 95.95 * 4.22 * 60.0 * 33,894,368 4,806,258,000 2,031,021,000 2,775,237,000 2,287,656,579 1,525,225,777 585,221,742 940,004,035 762,430,802 625,897,712 136,533,090 43,246 153,231 * 50,489 * 2,578,500 * 487,200 * 2,091,300 * 8.5 * 8.3 * 9.2 * 20,374 * 81,794 * 28,218,346 33,761,827 27,755,257 6,006,570 577,543 618,258 317,504 300,754 171,726 77,823 93,903 94,866 200.153 * 224.079 * 51.5 * 92.04 * 51.46 * 32,901 7,968 Year Earlier 1,477 * 77.29 * 4.63 * 54.9 * 33,199,596 5,241,013,000 2,077,892,000 3,163,121,000 2,227,155,348 1,497,033,255 512,792,542 984,240,713 730,122,093 563,804,717 166,317,376 42,513 152,876 * 50,652 * 2,517,025 * 467,900 * 2,049,125 * 8.6 * 8.3 * 9.9 * 22,642 * 108,493 * 26,357,655 33,285,354 27,470,983 5,814,371 569,725 583,465 305,820 277,645 163,218 73,689 89,529 88,070 193.822 * 217.692 * 56.2 * 95.80 * 54.05 * 35,037 10,502 -10.0 -24.6 7.1 1.4 1.0 3.3 1.4 6.0 3.8 8.3 5.2 5.6 4.9 7.7 3.3 2.9 % Change 22.7 24.1 -8.9 9.3 2.1 -8.3 -2.3 -12.3 2.7 1.9 14.1 -4.5 4.4 11.0 -17.9 1.7 0.2 -0.3 2.4 4.1 2.1

MONTHLY DATA Most Recent 1,957 84.95 4.03 61.3 4,623,682 685,059,000 308,171,000 376,888,000 314,010,703 188,772,818 97,018,488 91,754,330 125,237,885 106,928,320 18,309,565 6,524 159,000 48,752 2,595,600 504,300 2,091,300 8.6 8.5 9.1 20,853 93,377 3,418,884 4,465,576 3,694,860 770,716 72,158 78,325 41,259 37,066 22,421 12,246 10,175 27,634 202.445 226.545 53.8 90.51 48.67 3,480 1,091

-0.9 3.2 -25.8 -32.0

-3.9 -4.8 -6.1 -24.1

October 2011

©2011, Greater Houston Partnership

Page 12

HOUSTON—THE ECONOMY AT A GLANCE
Sources Rig Count Spot WTI, Spot Natural Gas Houston Purchasing Managers Index Electricity Building Construction Contracts City of Houston Building Permits MLS Data Employment, Unemployment Baker Hughes Incorporated U.S. Energy Information Agency National Association of Purchasing Management – Houston, Inc. CenterPoint Energy McGraw-Hill Construction Building Permit Department, City of Houston Houston Association of Realtors Texas Workforce Commission Port Shipments Aviation Car and Truck Sales Retail Sales Consumer Price Index Hotels Postings, Foreclosures Port of Houston Authority Aviation Department, City of Houston TexAuto Facts Report, InfoNation, Inc., Sugar Land TX Texas Comptroller’s Office U.S. Bureau of Labor Statistics PKF Consulting/Hospitality Asset Advisors International Foreclosure Information & Listing Service

October 2011

©2011, Greater Houston Partnership

Page 13

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