Coronavirus-caused closures have resulted in a nearly 30 percent drop in the county's daily economic output, according to a new report. Getty Images

Houston's economy continues to suffer as a result of the coronavirus-fueled economic slide and the collapse in oil prices. But just how much are these twin crises injuring Bayou City?

Economic data and forecasts present an increasingly grim outlook for Houston.

A new Moody's Analytics analysis commissioned by the Wall Street Journal provides one measurement of the economic damage being inflicted on Houston. The analysis, published April 2, indicates business closures in Harris County — which represents two-thirds of the region's population — have caused a 27 percent drop in the county's daily economic output.

Ed Hirs, an economics lecturer at the University of Houston, says the 27 percent figure is likely lower than the actual number. He thinks it's closer to 50 percent.

"The reason is that we are talking about output — actual work getting done — and not including monetary transfers from the bailout bill or unemployment insurance," Hirs says.

The lingering daily decline undoubtedly will bring down the Houston area's total economic output for 2020. In 2018, the region's economic output (GDP) added up to nearly $478.8 billion. By comparison, the 2018 economic output for the nation of Austria totaled $455.3 billion, according to the World Bank.

Harris County ranks as the third largest county in the U.S., as measured by population. The Moody's Analytics study shows the country's two largest counties — Los Angeles County in California and Cook County in Illinois — have been hit with even bigger decreases in daily economic output. Los Angeles County's loss sits at 35 percent, with Cook County's at 30 percent.

Patrick Jankowski, senior vice president of research at the Greater Houston Partnership, says in a podcast interview published April 2 that it's difficult to accurately gauge how the economic climate is hurting Houston right now. That's because economic data lags present-day economic reality.

"The situation is changing daily," Jankowski says. "There's so many unknowns out there. This is unprecedented."

Economists predict the Houston area's workforce will see massive losses as a result of the coronavirus and energy downturns.

Economist Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston's Bauer College of Business, says a moderate recession could siphon as many as 44,000 jobs from the region's economy by the end of this year. A more dire forecast from The Perryman Group, a Waco-based economic analysis firm, envisions the Houston area losing nearly 256,000 jobs due to the COVID-19 shutdown and racking up $27 billion in coronavirus-related economic losses.

Jankowski anticipates the Houston area tallying job losses of at least 200,000, meaning losses would be less severe than the 1980s energy bust but more severe than the Great Recession.

"If we're still working from home after May, everyone's job is at risk," says Jankowski, adding that this would trigger more furloughs, layoffs, and pay cuts.

Aggravating Houston's situation is the coronavirus clampdown on restaurants and hotels.

According to survey data released March 30 by the Texas Restaurant Association, 2 percent of the state's more than 50,000 restaurants already had closed permanently, and another 32 percent had closed temporarily. An additional 12 percent of Texas restaurants anticipated shutting down within the next 30 days.

If you add the 2 percent of restaurants that have closed to the 12 percent that expect to close, that would equal roughly 7,000 shuttered restaurants.

"Restaurants are in a fight for survival. The statistics from this survey provide a mere snapshot of the extreme economic impact the COVID-19 crisis is having on one of the most important industries in Texas," Emily Williams Knight, president and CEO of the Texas Restaurant Association, says in a release.

In the lodging sector, Texas is projected to lose 44 percent of its jobs, or more than 64,000 positions, according to a mid-March forecast from the American Hotel & Lodging Association. Experts predict some Texas hotels won't survive the coronavirus crisis.

"COVID-19 has been especially devastating for the hotel industry. Every day, more hotels are closing, and more employees are out of a job," Chip Rogers, president and CEO of the hotel association, says in a March 26 release.

While the restaurant and hotel sectors face a shaky future, the energy industry is grappling with the oil war between Russia and Saudi Arabia as well as depressed demand for crude oil and gasoline. Jankowski says gas prices could stay low through mid-2020 or even the end of 2020 as the energy industry copes with a prolonged oil glut.

Relief funds coming from Washington, D.C., will help stabilize the energy sector and other industries, Jankowski says, but will not "juice" the economy and spark growth.

"We're going to need to move beyond the pandemic," he says, "and we're going to need for some consumer confidence and business confidence to come back before we start to see growth returning again."

According to a new study, Houston is among the cities most vulnerable to job loss due to the recession caused by COVID-19. Getty Images

COVID-19 could cost Houston 44,000 jobs by the end of the year, says local economist

hits keep coming

No matter whether the outlook leans more toward optimism or pessimism, Houston stands to lose a head-spinning number of jobs in the grips of a coronavirus-induced recession.

Economist Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston's Bauer College of Business, says a moderate recession could drain as many as 44,000 jobs from the regional economy by the end of 2020. That's out of nearly 3.2 million workers in the Houston metro area.

The job figures might look "much worse" through the second and third quarters of this year, Gilmer says. However, he adds, Houston's job losses should be followed by a "quick recovery" in 2021.

A study published March 27 by personal finance website SmartAsset predicts an even greater impact on employment in Houston.

SmartAsset forecasts 56,469 full-time and part-time jobs in just the city of Houston, or nearly 5 percent of the local workforce, could be lost in a coronavirus recession. In all, more than 282,000 jobs, or 24.6 percent of the city's workforce, could be in jeopardy, according to the study.

John Diamond, director of the Center for Public Finance at Rice University's Baker Institute for Public Policy, says he thinks Smart Asset's job-loss estimate is "decent" but might be too low.

In light of the federal government's extension of social-distancing guidelines to April 30 and perhaps further extensions, Diamond believes Houston will suffer "substantial" job losses in the next two to four months. After the social-distancing rules are relaxed, Diamond expects an employment bounce-back later in the year.

"The recovery could be rapid if business supply chains and networks remain intact," Diamond says, "and if oil prices rebound by the end of the year."

For his part, Ed Hirs, an economics lecturer at the University of Houston, pessimistically envisions about 300,000 people in the Houston metro area will lose their jobs, at least in the short term, due to the coronavirus recession and the recent plunge in oil prices. (By comparison, the Economic Policy Institute projects the entire state of Texas will lose 442,717 private-sector jobs as a result of the coronavirus pandemic.)

"COVID-19 is going to be kind of a catch-all spring cleaning excuse for a lot of the oil and gas companies as they try to reduce their payroll," Hirs says.

For now, though, concerns about the oil war between Russia and Saudi Arabia must "take a back seat" to concerns about COVID-19, he says.

Aside from the energy industry, the escalating economic slump promises to hit several other prominent business sectors in Houston, including hospitality and manufacturing. Hirs thinks a recession could shrink Houston's 2020 economic output by 10 percent.

"This is across the board," he says, "and has the potential to be extraordinarily devastating."

ThinkWhy, a labor analysis firm, believes the impact of the COVID-outbreak on the Houston job market will be more evident in the blow it delivers to international trade than in any boost it provides to the health care sector. "But the pandemic will no doubt have an impact on both," the firm says.

It's already having a tremendous impact on small and midsize businesses in the Houston area. A March 23-28 survey by the Greater Houston Partnership found 34 percent of those businesses already had reduced their headcounts in response to the COVID-19 slowdown. And 55 percent said they're unsure whether they'll wind up carrying out permanent layoffs in the next six months.

"Houstonians like to embrace the notion that their metro was among the last to enter the Great Recession and was among the first to exit. That's not going to be the case this time," economist Patrick Jankowski, senior vice president of research at the Greater Houston Partnership, wrote in an unvarnished economic assessment published March 20. "All three pillars of Houston's economy — energy, global trade, and the U.S. economy — are tottering. The next 12 to 18 months will likely be very rough for Houston."
The rodeo has shut down prematurely due to the rising threat of coronavirus. Photo courtesy of Rodeo Houston

Rodeo Houston shuts down due to coronavirus concerns, city prepares for economic impact

it's canceled

As the coronavirus continues to march across the country, the City of Houston and the Houston Health Department on March 11 ordered the shutdown of this year's Houston Livestock Show and Rodeo. This stems from Houston and Harris County declaring at least a seven-day health emergency in response to a potential community-spread case of the virus in Montgomery County.

The premature halt to this year's rodeo promises to ripple through the Houston economy. The 2019 version created a local economic impact of $227 million, according to a study commissioned by the rodeo. By comparison, Austin's annual music, film, and tech event — SXSW — generated an economic impact of $355.9 million in 2019. On March 6, the City of Austin ordered cancelation of this year's SXSW, set for March 13 to 22.

The Houston Rodeo and Livestock Show joins a rapidly growing list of events around the world that have been canceled or postponed.

Ed Hirs, an economics lecturer at the University of Houston, says it's hard to gauge the economic damage from the rodeo cutback, but he guesses it could range from $50 million to $100 million. Among those who will feel the pain are rodeo vendors, Uber and Lyft drivers, waiters and waitresses, and hotel employees, he says.

"We can't replace the income that the workers have lost," Hirs says.

The loss of rodeo revenue comes at a particularly inopportune time for Houston.

The earlier coronavirus-related cancelation of CERAWeek, the major energy conference, likely will cost the Houston economy millions of dollars. Last year, CERAWeek hosted 5,500 attendees. Cancelation of other local events could inflict even more financial harm.

Meanwhile, the Houston energy sector is coping with a huge drop in oil prices. The Organization of the Petroleum Exporting Countries (OPEC) oil cartel now projects near-zero growth in oil demand this year, according to OilPrice.com.

Hirs says that as early as the end of this week, some energy employers in Houston could begin layoffs. On March 11, Houston-based Occidental Petroleum Corp. hinted at impending layoffs. The oil and gas exploration and production company said it was slashing capital spending for 2020 from a range of $5.2 billion to $5.4 billion to a range of $3.5 billion to $3.7 billion. In addition, Occidental said it would carry out "additional operating and corporate cost reductions."

Occidental's market value has plummeted to $11 billion, triggering speculation that billionaire Warren Buffett might weigh a buyout of the company. In August, Occidental wrapped up its $55 billion purchase of Anadarko Petroleum Corp., based in The Woodlands.

According to the Greater Houston Partnership, the Houston area is home to more than 600 energy exploration and production companies, 1,100 oilfield services companies, and more than 180 pipeline transportation establishments. In all, the energy industry employs more than 237,000 people in the region.

The combination of the oil slump, the coronavirus pandemic, the ongoing trade war, and other economic drawbacks could push Houston closer to a recession, Hirs says.

"We were heading toward a recession anyway," he says of Houston and the entire country. "I think the coronavirus has tipped it over the edge."

For now, the most immediate economic blow comes from the rodeo shutdown.

In a March 11 statement, the rodeo indicates it's "respectfully and dutifully" following the city's order. The rodeo began March 3 at NRG Stadium and was supposed to end March 22. Last February 21 to March 17, rodeo activities attracted more than 2.5 million visitors.

Rodeo officials say they're working on a process for refunding tickets.

Government officials say an apparent case of coronavirus in Montgomery County prompted cancelation of the rodeo. In this case, the person — who reportedly attended a rodeo-sponsored barbecue cook off February 28 — seems to have contracted coronavirus somewhere in the community rather than as a result of international travel.

In a statement, Bob Harvey, president and CEO of the Greater Houston Partnership, says the organization supports the declaration of a health emergency and the subsequent decision to end the rodeo early.

"It is important that we, as a community, take extra precautions and minimize opportunities for exposure as much as possible to slow the growth in the number of coronavirus cases," Harvey says.

Harvey praises the closure of the rodeo as "the right thing to do."

"As Houston's largest annual event, the Rodeo is a point of pride for our region. We regret the impact this necessary step will have on Rodeo exhibitors, guests, and participants," he says. "But the health and safety of our community must come first."

As of March 11, officials reported 14 cases of the COVID-19 coronavirus in the Houston area.

The rodeo says it's "deeply saddened" by the shutdown. However, it adds, "the safety and well-being of our guests and our community is our top priority."

Among the major musical acts whose rodeo performances are now canceled include Lizzo, Dierks Bentley, Keith Urban, Gwen Stefani, Khalid, Chris Stapleton, Brad Paisley, and Luke Bryan.

"We look forward to the 2021 Houston Livestock Show and Rodeo to continue to promote agriculture, education, entertainment, and Western heritage," according to the rodeo's statement.

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10+ can't-miss Houston business and innovation events for December

WHERE TO BE

From networking meetups to pitch competitions, December is filled with opportunities for Houston innovators. Here's a roundup of events you won't want to miss out on so mark your calendars and register accordingly.

Note: This post might be updated to add more events.


December 3 — Cup of Joey: InnovationMap Awards Finalist Celebration

Meet the finalists of the Innovation Awards and network with like-minded, curious individuals over strong coffee.

This event is Tuesday, December 3, from 8:30 to 10:30 a.m. at 820 Gessner Rd. Click here to register.

December 3 — Antwerp-Houston Innovation Mission: Cleantech Pitching Event

Pitch your cleantech solution to members of both the Antwerp and Houston ecosystem. This cleantech pitch competition will feature networking with industry leaders, investors, and like-minded individuals passionate about sustainability. Witness groundbreaking ideas, support the future of cleantech, and take advantage of a unique opportunity to pitch to the Port Of Antwerp-Bruges, Bluechem, StartUp Flanders and more.

This event is Tuesday, December 3, from 2 to 5 p.m. at the Ion. Click here to register.

December 4-5 — Energy LIVE 2024

A full-spectrum energy exhibition, with 3000+ decision-maker attendees and 100 booths - the first meeting point for North America's clean energy ecosystem post-U.S. election, where attendees will seize emerging opportunities for sustainable profit. The Energy LIVE Expo will connect the three concurrent strategic conferences to laser focus on facilitating the next generation of net-zero partnerships.

This event begins Wednesday, December 4, at NRG Park. Click here to register.

December 5 — Holiday Block Party at the Ion

Join the Rice Alliance team for a holiday block party at the Ion featuring familiar faces and a healthy dose of Houston’s entrepreneurial energy. This is a celebration where you can catch up with old friends, meet new ones and soak in the holiday spirit. In the spirit of giving, Operation Love is hosting a toy drive at the event. Bring a toy to donate, and wrap it up at the gift-wrapping station.

This event is Thursday, December 5, from 4 to 7 pm at the Ion. Click here to register.

December 5 — SouthWest-Midwest National Pediatric Device Innovation Consortium

This annual event brings together members, colleagues, and guests of our FDA-supported consortium, dedicated to assisting pediatric device innovators throughout the entire lifecycle in delivering innovative solutions to pediatric patients. Angela Lorts, MD, MBA, of ACTION Network and Cincinnati Children’s Hospital will deliver a keynote address followed by a panel discussion on clinical trials/ evidence generation for pediatric devices and real-world evidence case studies.

This event is Thursday, December 5, from 4 to 7:30 pm at Texas A&M EnMed Tower. Click here to register.

December 6 — Inaugural Houston Methodist Neal Cancer Center GI Oncology Symposium

In this session, attendees will explore the latest advancements in surgical techniques for early-stage hepatobiliary cancer. The presentations will cover innovative operative approaches that enhance surgical outcomes and improve patient recovery. Expert surgeons will discuss their experiences with new technologies and methods, including minimally invasive procedures and enhanced imaging techniques.

This event is Friday, December 6, from 8:30 a.m. to 3:15 p.m at Houston Methodist Research Institute. Click here to register.

December 9 — Pumps & Pipes Annual Event 2024

The Pumps & Pipes Annual Event is an innovation gathering bringing together cross-industry leaders in Aerospace, Energy, and Medicine for engaging discussions and top tier networking opportunities. There will be three hour-long sessions ranging from space to medical technologies. The "Skybound Synergies: State of Texas Aerospace Investments & Their Ripple Effect" panel will spotlight Texas’ critical role in shaping the future of aerospace, with a focus on its cross-sector impact, from space exploration to innovation in energy & healthcare. Speakers include: Norman Garza, Jr., Executive Director of the Texas Space Commission (TSC); as well as two members of the TSC board of directors: Sarah “Sassie” Duggelby, CEO/Co-Founder of Venus Aerospace; & Kathryn Lueders, GM at Starbase, SpaceX.

In the "Innovating the Impossible: Real-World Applications of Robotics & Synthetic Bio" speakers will explore the groundbreaking intersection of synthetic biology and robotics as they reshape industries from aerospace to energy to healthcare. In "The Total Artificial Heart: Past, Present, & Future; a Uniquely Houston Story" Dr. Billy Cohn, will discuss the groundbreaking BiVACOR TAH, a device that fully replaces the function of the heart using a magnetically levitated rotary pump. This innovative approach is part of an FDA-approved first-in-human study, aiming to evaluate its use as a bridge-to-transplant for patients awaiting heart transplants.

This event is Monday, December 9, from 8 a.m. to 3 p.m. at Texas Medical Center Helix Park. Click here to register.

December 9 — The $2 Million to $22 Million ARR Playbook

Join Next Stage Trajectory at The Cannon West Houston and learn from leaders who have navigated the path from promising startup to established industry player. This panel brings together three accomplished founders who have successfully scaled their companies from $2 million to over $20 million in annual recurring revenue within a short time period. Expert speakers will share insights, strategies, and hard-won lessons from their journeys.

This event is Monday, December 9, from 3:30 to 5 p.m. at the Cannon. Click here to register.

December 11 — Jingle Mingle and the Houston Tech & Energytech Extravaganza

Celebrate the season with Houston’s tech, energy transition, and life science startup communities. Enjoy music, holiday lights, an ugly sweater competition, and maybe even a visit from Startup Santa. Network with fellow builders in the Houston energy transition and foster meaningful connections and collaborations.

This event is Wednesday, December 11, from 5 to 9 pm at 401 Franklin St. Click here to register.

December 12 — Houston Region Economic Outlook

The Greater Houston Partnership’s Chief Economist Patrick Jankowski will present the organization’s Houston economic forecast for 2025, discussing the regional employment outlook for the year ahead and the overall regional and national economic outlook. This year’s event is particularly significant as it marks Jankowski’s final forecast presentation before his well-earned retirement after a 41-year career with the Partnership.

The Partnership’s Houston Region Economic Outlook event will also feature a panel discussion with experts discussing their insights on their respective industries, including commercial real estate and energy, moderated by Dan Bellow, President of JLL. Panelists include Stan Chapman, Executive Vice President & COO, Natural Gas Pipelines, TC Energy; Mary Beth Gracy, Houston Office Managing Director, Accenture.

This event is Thursday, December 12, from 11 a.m. to 1:30 p.m. at the Royal Sonesta. Click here to register.

December 13 — 2024 Women In Agriculture Conference

Urban Harvest will host its third annual Women in Agriculture Conference, bringing together urban gardeners, farmers, entrepreneurs, and plant enthusiasts from across Texas to celebrate, educate, and uplift the work of women shaping the agricultural landscape. The conference features expert panels, networking opportunities, food, and prizes, and will offer a platform to share resources and knowledge for sustainable agriculture practices.

This event is Friday, December 13, from 8:30 a.m. to 3:30 p.m. at Houston Community College - West Houston Institute Campus. Click here to register.

Houston health startup launches tool to revolutionize kidney care, reduce costs

here to help

Chronic Kidney Disease is expensive and common. In fact, 37 million Americans live with the condition. The winner of this year’s Houston Innovation Award for best female-founded business, Koda Health, recognized the need for help among CKD sufferers and has answered the call.

Last week, Koda Health announced the addition of Kidney Action Planning to its suite of services for patients with serious illnesses.

"Kidney Action Planning is designed to fill a significant void in CKD management," Tatiana Fofanova, CEO of Koda Health, says in a statement. "Some studies indicate greater than 70 percent of patients start dialysis in the ER suboptimally, potentially navigating a life-or-death scenario. This is both frightening and largely avoidable with an intervention like Kidney Action Planning, which helps patients better understand CKD.”

Nearly one in four Medicare dollars is spent on kidney care. That’s roughly $130 billion each year. How does KAP help?

The solution uses technology to support CKD patients from the moment of diagnosis. By using KAP, patients are educated about their condition, which empowers them to make their own decisions about treatment as the disease progresses.

Using targeted patient outreach, KAP aids healthcare workers in identifying patients who require assistance with care planning. It then matches them with the best fit for solutions. The company’s interactive, gamified digital tools teach and guide users through making care plans using their own personal values. But KAP doesn’t exist entirely on a device. For higher risk cases, patients can connect with KodaCares Patient Advocates, who provide the 1:1 assistance that only a human can.

A major goal of KAP is to minimize unplanned and inappropriate treatments, dramatically minimizing the cost to patients.

“With an unplanned dialysis start estimated to cost about $95,000 per patient compared to $25,000 per planned start – our new tool enables healthcare organizations to allocate the resources necessary to deliver proactive decision-making and disease education. We believe Kidney Action Planning has the potential to transform chronic kidney care for patients and the organizations that serve them," says Fofanova.

Koda Health launched its original software platform, Advance Care Planning, in 2021. It’s now used by 700,000 patients around the country to help make their medical wishes a reality, with the help of industry leaders such as Cigna, Privia and Houston Methodist. For patients with CKD and end-stage kidney disease, the new technology could make a substantial difference in the quality and cost of their care.