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."

For the second decade in a row, Houston could have the second highest number of new residents for any metro area. Photo by DenisTangneyJr/Getty Images

Houston expects to see huge population surge this decade, study says

incoming

Brace yourselves, Houston. Following a decade of eye-popping population growth, Houston is expected in this decade to once again lead the nation's metro areas for the number of new residents.

New data from commercial real estate services company Cushman & Wakefield shows Houston gained 1,284,268 residents from 2010 through 2019. In terms of the number of new residents tallied during the past decade, Houston ranked second among U.S. metro areas, the data indicates.

From 2020 through 2029, Houston is projected to tack on another 1,242,781 residents, Cushman & Wakefield says. For the second decade in a row, that would be the second highest number of new residents for any metro area, the company says. That's around the number of people who live in the Louisville, Kentucky, metro area.

For Houston, the 2020-29 forecast would represent a population growth rate of 17.2 percent, down from 21.6 percent for 2010 through 2019, Cushman & Wakefield says.

As of July 2018, the Census Bureau estimated the Houston area was home to nearly 7 million people, making it the country's fifth largest metro. If the Cushman & Wakefield projection is correct, the metro population would easily exceed 8 million by the end of 2029.

The outlook is based on data from Moody's Analytics and the U.S. Census Bureau. The company published its findings January 7. The outlook takes into account a metro area's birth and death rates, along with the number of people moving into and out of an area.

The forecast indicates Houston won't be alone among Texas metro areas in terms of rolling out the welcome mat for lots of new residents.

Dallas-Fort Worth is expected to once again lead the nation's metro areas for the number of new residents. DFW gained 1,349,378 residents from 2010 through 2019, ranking first among U.S. metro areas for the number of new residents.

From 2020 through 2029, DFW is projected to tack on another 1,393,623 residents. That would be the highest number of new residents for any metro area for the second decade in a row.

The 2020-29 forecast would represent a population growth rate of 17.9 percent, down from 20.9 percent for 2010 through 2019, Cushman & Wakefield says.

As of July 2018, an estimated 7,539,711 people lived in DFW, making it the country's fourth largest metro. Under the Cushman & Wakefield scenario, DFW's population would swell to about 9 million by the time the calendar flips to 2030.

Austin, meanwhile, is projected to retain its No. 9 ranking for headcount growth among U.S. metro areas, according to Cushman & Wakefield. The company says the Austin area added 549,141 residents from 2010 through 2019. From 2020 through 2029, another 602,811 residents are on tap. At that pace, the Austin area is on track to have roughly 2.9 million residents at the outset of the next decade.

Cushman & Wakefield envisions a 26.5 percent population growth rate for the Austin area from 2020 through 2029, down from 31.8 percent in 2010-19.

The Cushman & Wakefield report doesn't include figures for the San Antonio metro area.

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This article originally ran on CultureMap.

Texas was named the second best state for business by Forbes, and Oxford Economics predicted Houston's economic growth to be more significant over the next few years than most other major metros. Getty Images

Texas recognized as second best state for business, while Houston expected to see key economic growth

Feathers for our cap

Houston and the rest of Texas received two early Christmas presents signaling that their economies continue to percolate.

In a report released December 23, economic forecasting and analysis firm Oxford Economics predicted Houston and Dallas-Fort Worth will enjoy a greater share of economic growth through 2023 than any other mega-metro area in the U.S. except San Francisco.

Meanwhile, Forbes magazine declared on December 19 that Texas is the second best state for business, behind only North Carolina. Texas previously sat in the No. 3 spot on the Forbes list, preceded by North Carolina and Utah.

Through 2023, Oxford Economics forecasts average compound GDP growth of 2.4 percent in Houston and Dallas-Fort Worth. Among the country's 10 biggest metro areas, only the projection for San Francisco is higher (2.7 percent).

For Houston, the 2.4 percent figure would be an improvement over recent economic performance. From 2014 to 2018, the region's GDP growth rate was 1 percent, while it was 1.5 percent for 2015-19. In the 2020-21 timeframe, the growth rate for Houston is expected to be 1.9 percent.

In a recent forecast, the Greater Houston Partnership envisions the Houston area adding 42,300 jobs in 2020, mostly outside the energy sector. Among the region's top-performing sectors in 2020 will be healthcare, government, food services, and construction, the partnership says. Meanwhile, the energy, retail, and information sectors are expected to shrink.

In November, Robert Gilmer of the University of Houston's Institute for Regional Forecasting explained that by the end of 2022, job losses in the oil industry should have a limited effect on the region's economy. Still, he anticipates Houston's job growth through 2024 will be "moderate and just below trend."

In forecasting strong economic growth for Houston and DFW, Oxford Economics says the "industrial structures" of the two regions "are not exceptional, but low costs and low regulation mean that the industries that they do have grow faster than elsewhere."

"San Francisco's very high costs are creating affordability problems and rising inequalities that may eventually undermine its model," Oxford Economics adds. "Competitive advantages never last forever. The Sunbelt cities [including Houston and DFW] may yet give it a run for its money."

Houston's and DFW's competitive advantages mesh with those of the entire state. Texas' high points include lower taxes, lower labor expenses, lower cost of living, and low levels of regulation, Oxford Economics says.

As noted by Forbes, Moody's Analytics predicts Texas businesses will add close to 1 million new jobs by 2023, which would be the third highest average annual job growth rate among the states. Meanwhile, the share of Texans who launched businesses last year was the fourth highest in the country, according to Kauffman Foundation data cited by Forbes. And just three states — California, New York and Washington — saw more venture capital flow into them in 2018 and 2019 than Texas did, according to PwC.

Texas earned these rankings on the Forbes list:

  • No. 1 state for growth prospects
  • No. 1 state for business costs
  • No. 4 state for economic climate
  • No. 10 state for labor supply
  • No. 15 state for quality of life
  • No. 21 state for regulatory environment
In his 2019 State of the State address, Gov. Greg Abbott praised Texas as "the most powerful state in America," thanks in part to healthy job growth, low unemployment, and rising wages. "Texas is the premier economic destination in the United States," he said.
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CultureMap Emails are Awesome

8+ can't-miss Houston business and innovation events in April

where to be

Editor’s note: Houston's weeklong innovation festival kicks off April, followed by Rice University's globally recognized pitch competition returning for its 26th year. Plus, find coworking pop-ups, industry meetups, pitch battles and even a crawfish boil on the calendar. Here’s what not to miss and how to register. Please note: this article might be updated to add more events.

March 30-April 4 — H-Town Roundup

Celebrate innovation, entrepreneurship and collaboration at Houston Exponential's sixth-annual H-Town Roundup. During the free event series, previously known as Houston Tech Rodeo, attendees can expect insightful talks, workshops and networking events at venues across the city.

This event began March 30. Register here.

April 2 — Industrious Coworking Day

Enjoy a complimentary day of cowering at Industrious and network with professionals at the Ion. Breakfast, snacks, wifi and workspace tours are included. Following the cowering day, Industrious will host happy hour at Second Draught from 4-6 p.m.

This event is Thursday, April 2, from 8:30 a.m.-5 p.m. at the Ion. Register here.

April 2 — Technology Summit for Women

The fourth annual Women in Tech Cummil will feature speakers across three core tracks: Transformation + Digital strategy, Cyber + Risk + Resilience, and AI in Practice. Pearl Chu, director of technical domains and university relations at SLB, will give the opening remarks. Other panelists come from CenterPoint Energy, BP, Technip Energies and other leading companies.

This event is Thursday, April 2, from 2-5 p.m. at the Ion. Register here.

April 8 — Veterans Business Battle

Hear pitches from veterans and entrepreneurs as they compete for more than $10 million in investments at Rice Businesses' 12th annual Veterans Business Battle. This year, the two-day event will also feature a Small Business Expo, which invites Houston-based, veteran-owned businesses to participate in education, networking and the opportunity to showcase their business. Moonshots Capital and Mercury Fund will also host a fireside chat.

This event begins Wednesday, April 8, at 11 a.m. at the Ion. Click here to register.

April 9-11 — Rice Business Plan Competition

The Rice Alliance for Technology and Entrepreneurship will host the 26th annual Rice Business Plan Competition this month. Forty-two student-led teams from around the world, including one team from Rice, will present their plans before more than 300 angel, venture capital, and corporate investors to compete for more than $1 million in prizes.

This event begins Thursday, April 9. Find more information here.

April 10 — BioHouston Chili Cookoff

Connect with Houston's life sciences community at BioHouston's 21st annual chili cookout. This event is geared toward startup founders, researchers and industry veterans alike.

This event is Friday, April 10, from noon-4 p.m. at Bayou City Event Center. Register here.

April 14 — Mercury Fund Day at the Ion: Agentic Commerce

Don’t miss the latest installment of Mercury Fund Day at the Ion, previously known as Software Day. The recurring monthly event features office hours (by application), a keynote and networking opportunities. This month's topic focuses on agentic commerce.

This event is Tuesday, April 14, from 3:30-7 p.m. at the Ion. Register here.

April 19 – UH Energy Industry Crawfish Boil

Head to the UH Cullen College of Engineering Green Space for the 35th annual UH Energy Industry Crawfish Boil. The event will include a student showcase, STEM activities, a kids zone, live music, networking and, of course, crawfish. Proceeds from the event will support the multidisciplinary capstone fund that aims to increase professional readiness for Cullen College engineering and technology students.

This event is Sunday, April 19, from 1-5 p.m. at the Cullen College of Engineering Green Space. Find more information here.

April 24 — Rice Business Healthcare Conference

Leading experts, innovators and the next generation of healthcare leaders will converge at the Rice Business Healthcare Conference. Hosted by the Rice Business Healthcare Association, the conference will explore AI's potential impact on the sector.

This event is Friday, April 24, from 8 a.m.-2 p.m. at McNair Hall on Rice University's campus. Find more information here.

Houston unicorn closes $421M to fuel first phase of flagship energy project

Heating Up

Houston geothermal unicorn Fervo Energy has closed $421 million in non-recourse debt financing for the first phase of its flagship Cape Station project in Beaver County, Utah.

Fervo believes Cape Station can meet the needs of surging power demand from data centers, domestic manufacturing and an energy market aiming to use clean and reliable power. According to the company, Cape Station will begin delivering its first power to the grid this year and is expected to reach approximately 100 megwatts of operating capacity by early 2027. Fervo added that it plans to scale to 500 megawatts.

The $421 million financing package includes a $309 million construction-to-term loan, a $61 million tax credit bridge loan, and a $51 million letter of credit facility. The facilities will fund the remaining construction costs for the first phase of Cape Station, and will also support the project’s counterparty credit support requirements.

Coordinating lead arrangers include Barclays, BBVA, HSBC, MUFG, RBC and Société Générale, with additional participation from Bank of America, J.P. Morgan and Sumitomo Mitsui Trust Bank, Limited, New York Branch.

“As demand for firm, clean, affordable power accelerates, EGS (Enhanced Geothermal Systems) is set to become a core energy asset class for infrastructure lenders,” Sean Pollock, managing director, project Finance at RBC Capital Markets, said in a news release. “Fervo is pioneering this step change with Cape Station, a vital contribution to American energy security that RBC is proud to support.”

The oversubscribed financing marks Cape Station’s shift from early-stage and bridge funding to a long-term, non-recourse capital structure, according to the news release.

“Non-recourse financing has historically been considered out of reach for first-of-a-kind projects,” David Ulrey, CFO of Fervo Energy, said in a news release. “Cape Station disrupts that narrative. With proven oil and gas technology paired with AI-enabled drilling and exploration, robust commercial offtake, operational consistency, and an unrelenting focus on health and safety, we have shown that EGS is a highly bankable asset class.”

Fervo continues to be one of the top-funded startups in the Houston area. The company has raised about $1.5 billion prior to the latest $421 million. It also closed a $462 million Series E in December.

According to Axios Pro, Fervo filed for an IPO that would value the company between $2 billion and $3 billion in January.

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This article first appeared on EnergyCapitalHTX.com.

Houston food giant Sysco to acquire competitor in $29 billion deal

Mergers & Acquisitions

Sysco, the nation's largest food distributor, will acquire supplier Restaurant Depot in a deal worth more than $29 billion.

The acquisition would create a closer link between Sysco and its customers that right now turn to Restaurant Depot for supplies needed quickly in an industry segment known as “cash-and-carry wholesale.”

Sysco, based in Houston, serves more than 700,000 restaurants, hospitals, schools, and hotels, supplying them with everything from butter and eggs to napkins. Those goods are typically acquired ahead of time based on how much traffic that restaurants typically see.

Restaurant Depot offers memberships to mom-and-pop restaurants and other businesses, giving them access to warehouses stocked with supplies for when they run short of what they've purchased from suppliers like Sysco.

It is a fast growing and high-margin segment that will likely mean thousands of restaurants will rely increasingly on Sysco for day-to-day needs.

Restaurant Depot shareholders will receive $21.6 billion in cash and 91.5 million Sysco shares. Based on Sysco’s closing share price of $81.80 as of March 27, 2026, the deal has an enterprise value of about $29.1 billion.

Restaurant Depot was founded in Brooklyn in 1976. The family-run business then known as Jetro Restaurant Depot, has become the nation's largest cash-and-carry wholesaler.

The boards of both companies have approved the acquisition, but it would still need regulatory approval.

Shares of Sysco Corp. tumbled 13% Monday to $71.26, an initial decline some industry analysts expected given the cost of the deal.