Economists dive into the economic impact of COVID-19, low oil prices on Houston

double teamed

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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Houston space tech co.'s lunar lander touches down on moon — condition unknown

Lunar Landing

A privately owned lunar lander touched down on the moon Thursday, but as the minutes dragged on, flight controllers could not confirm its condition or whether it was even upright near the south pole.

The last time Intuitive Machines landed a spacecraft on the moon, a year ago, it ended up sideways.

The company's newest Athena lander dropped out of lunar orbit as planned, carrying an ice drill, a drone and two rovers for NASA and others. The hourlong descent appeared to go well, but it took a while for Mission Control to confirm touchdown.

“We're on the surface,” reported mission director and co-founder Tim Crain. A few minutes later, he repeated, "It looks like we're down ... We are working to evaluate exactly what our orientation is on the surface.”

Launched last week, Athena was communicating with controllers more than 230,000 miles away and generating solar power, officials said. But nearly a half-hour after touchdown, Crain and his team still were unable to confirm if everything was all right with the 15-foot lander. NASA and Intuitive Machines abruptly ended their live webcast, promising more updates at a news conference later in the afternoon.

“OK team, keep working the problem," Crain urged.

Intuitive Machines last year put the U.S. back on the moon despite its lander tipping on its side.

Another U.S. company Firefly Aerospace on Sunday became the first to achieve complete success with its commercial lunar lander. A vacuum already has collected lunar dirt for analysis and a dust shield has shaken off the abrasive particles that cling to everything.

Intuitive Machines was aiming this time for a mountain plateau just 100 miles from the south pole, much closer than before.

This week's back-to-back moon landings are part of NASA’s commercial lunar delivery program meant to get the space agency’s experiments to the gray, dusty surface and jumpstart business. The commercial landers are also seen as scouts for the astronauts who will follow later this decade under NASA's Artemis program, the successor to Apollo.

NASA officials said before the landing that they knew going in that some of the low-cost missions would fail. But with more private missions to the moon, that increased the number of experiments getting there.

NASA spent tens of millions of dollars on the ice drill and two other instruments riding on Athena, and paid an additional $62 million for the lift. Most of the experiments were from private companies, including the two rovers. The rocket-powered drone came from Intuitive Machines — it's meant to hop into a permanently shadowed crater near the landing site in search of frozen water.

Intuitive Machines' Trent Martin said before the flight that Athena needed to land upright in order for the drone and rovers to deploy.

To lower costs even more, Intuitive Machines shared its SpaceX rocket launch with three spacecraft that went their separate ways. Two of them — NASA’s Lunar Trailblazer and AstroForge’s asteroid-chasing Odin — are in jeopardy.

NASA said this week that Lunar Trailblazer is spinning without radio contact and won’t reach its intended orbit around the moon for science observations. Odin is also silent, with its planned asteroid flyby unlikely.

As for Athena, Intuitive Machines made dozens of repairs and upgrades following the company’s sideways touchdown by its first lander. It still managed to operate briefly, ending America’s moon-landing drought of more than 50 years.

Until then, the U.S. had not landed on the moon since Apollo 17 in 1972. No one else has sent astronauts to the moon, the overriding goal of NASA’s Artemis program. And only four other countries have successfully landed robotic spacecraft on the moon: Russia, China, India and Japan.

Houston scientists make breakthrough in hearing science and treatment research

sounds good

Researchers at Baylor College of Medicine and the Jan and Dan Duncan Neurological Research Institute at Texas Children’s Hospital have successfully mapped which cell populations are responsible for processing different types of sounds.

Working with a team at the Oregon Health & Science University, the Houston scientists have classified where in the cochlear nucleus our brains connect with various sounds, including speech and music. The research was published in the new edition of Nature Communications.

“Understanding these cell types and how they function is essential in advancing treatments for auditory disorders,” Matthew McGinley, assistant professor of neuroscience at Baylor, said in a release. “Think of how muscle cells in the heart are responsible for contraction, while valve cells control blood flow. The auditory brainstem operates in a similar fashion — different cell types respond to distinct aspects of sound.”

Though scientists have long thought that there are distinct types of cells in the cochlear nucleus, they didn’t have tools to distinguish them until now.

Lead author on the study, Xiaolong Jiang, associate professor of neuroscience at Baylor, added: “This study not only confirms many of the cell types we anticipated, but it also unveils entirely new ones, challenging long-standing principles of hearing processing in the brain and offering fresh avenues for therapeutic exploration.”

Jiang and his team have cooked up a comprehensive cellular and molecular atlas of the cochlear nucleus, which will help them to create more targeted and more effective treatments for patients struggling with their hearing.

The strategies that aided them in creating these tools included single-nucleus RNA sequencing, which made it possible to define neuronal populations on a molecular level. Phenotypic categorizations of the cells were made possible with patch sequencing.

This is a watershed moment for the development of targeted treatments for individuals with auditory disorders, including those with impaired function in the auditory nerve, for whom cochlear implants don’t work.

“If we can understand what each cell type is responsible for, and with the identification of new subtypes of cells, doctors can potentially develop treatments that target specific cells with greater accuracy,” McGinley explains. “These findings, thanks to the work of our collaborative team, make a significant step forward in the field of auditory research and get us closer to a more personalized treatment for each patient.”

Houston shines among top 10 tech metros in the South, study says

Tops in Tech

A study analyzing top U.S. locales for the tech industry ranked Houston the No. 9 best tech hub in the South.

The report by commercial real estate platform CommercialCafe examined the top 20 Southern metros across nine metrics, such as the growth rates of tech establishments and employment, median tech earnings, a quality of life index, and more.

Like other Texas metros, the study attributes Houston's tech powerhouse status to its growing presence of major tech companies. However, Houston leads the nation with the highest number of patents granted between 2020 and 2024.

"The second-largest metro by population in the South, Houston led the region with an impressive 8,691 tech patent grants in the last five years," the report said. "Once synonymous with oil, Houston is increasingly making its mark as a cleantech hub — and patents reflect this shift."

Houston also experienced an impressive 14 percent growth in tech establishments, with nearly 500 new tech companies moving to the metro. An impressive 32 percent job growth rate also accompanied this change, with over 30,500 tech jobs added between 2019 and 2023.

Here's how Houston stacked up across the remaining five rankings:
  • No. 11 – Tech establishment density
  • No. 15 – Median tech earnings
  • No. 19 – Median tech earnings growth
  • No. 20 – Tech job density
  • No. 20 – Quality of life index

In a separate 2024 report, Houston was the No. 22 best tech city nationwide, showing that the city is certainly making efforts to improve its friendliness toward the tech industry in 2025.

Other top Texas tech hubs in the South
The only other Texas metros to earn spots in the report were Austin (No. 1) and Dallas-Fort Worth (No. 4). Most notably, CommercialCafe says Austin saw a 25 percent increase in tech company density from 2019 to 2023, which is the third-highest growth rate out of all 20 metros.

"Moreover, the metro’s tech scene thrives on a diverse range of segments, including AI and green energy (bolstered by the University of Texas), as well as globally recognized events like [South by Southwest]," the report says. "Thus, with tech companies accounting for more than half of all office leasing activity in 2024, Austin remains a magnet for innovation, talent and investment."

Dallas, on the other hand, has a far greater diversity when it comes to its tech sector and its thriving economic opportunities.

"Not to be outdone, Dallas-Fort Worth moved up from sixth to fourth in this year’s rankings, driven by a 25.9 percent growth in tech company presence — the second-highest increase among the top 20 metros," the report said. "For instance, companies like iRely (which relocated to Irving, Texas) and Diversified (now in Plano, Texas) have joined homegrown successes, such as StackPath and Bestow."

The top 10 best tech metros in the South are:

  • No. 1 – Washington, D.C.
  • No. 2 – Austin, Texas
  • No. 3 – Raleigh, North Carolina
  • No. 4 – Dallas-Fort Worth, Texas
  • No. 5 – Huntsville, Alabama
  • No. 6 – Baltimore, Maryland
  • No. 7 – Durham, North Carolina
  • No. 8 – Atlanta, Georgia
  • No. 9 – Houston, Texas
  • No. 10 – Charlotte, North Carolina
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This story originally appeared on our sister site, CultureMap.com.

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