Conflicting Views

The outlook for Houston in 2015 is either promising or bleak, depending on whom you talk to. For noted local economists Bill Gilmer, director of the Bauer Institute for Regional Forecasting at the University of Houston, and Patrick Jankowski of the Greater Houston Partnership, the next 11 months are positioned for a rather ruthless marring, as each expert estimates the city’s future job gains at a modest 40,000 and 62,900, respectively – a 60,000 to 80,000 drop from 2014’s figures.

Both Gilmer and Jankowski are respected thought leaders in the Houston area, who have been resourced by a number of local news outlets, but harkening back to the economists’ 2014 predictions, RNR pointed out that the economists have proven to be somewhat conservative in their estimates.

Last year, Gilmer predicted Houston would gain only 65,000 jobs, while Jankowski predicted a slightly more optimistic 69,800. As we now know, both estimates were off by a considerable degree.

“Houston won’t create another 120,000 jobs in 2015, like it did last year,” RNR’s Ralph Bivins wrote. “But the city’s diversified economy will do better than what some people expect.”

The plummeting value of crude is going to hurt Houston; it is an inevitability. But it’s entirely possible the eventual extent of the damages has been overblown.

In a recent article, we discussed the Associated General Contractors of America’s 2015 construction outlook. In the report, AGC Chief Economist Ken Simonson said that low oil prices were already giving a boost to businesses not operating within the energy sector, specifically construction, where 80 percent of companies are planning to expand payrolls in the new year.

Unfortunately, at this time, the effects of oil price drops, while well research, are little more than speculation. Look for further updates as the issue develops.