“How much of Houston’s economy is tied to energy?”
“Is Houston less dependent on energy than it was 10, 20 or 30 years ago?”
Energy Defined
Before answering either question, one must first define the industry. Oil and gas has three sectors: upstream, mid-stream, and downstream. Upstream includes exploration, production, and oilfield services. Midstream focuses on the processing, transportation, and storage of crude and natural gas. Downstream involves the refining and processing of oil and natural gas into fuels, chemicals, and plastics. All three sectors are well-represented in Houston.
Energy's Contribution to Houston's GDP
Every December, the Bureau of Economic Analysis (BEA) publishes its estimates of gross domestic product (GDP) for all 384 U.S. metro areas. BEA estimates that oil and gas extraction accounted for $20.5 billion (4.3 percent) of Houston’s GDP in ’18. That’s down from $33.1 billion or 7.7 percent in ’14.
Metro Houston Employment
Metro Houston added 55,000 jobs in June. That’s on top of the 78,200 jobs added in May. Despite the surge, local employment remains 217,700 jobs below its February pre-COVID level. The largest job gains occurred in restaurants and bars, retail and arts, entertainment and recreation. Government, manufacturing and transportation, ware-housing and utilities and energy continued to lose jobs. Of the major sectors, only finance and insurance has returned to its pre-COVID employment level.
SNAPSHOT – KEY ECONOMIC INDICATORS
Crude Oil
The closing spot price for West Texas Intermediate (WTI), the U.S. benchmark for light, sweet crude, averaged $40.69 per barrel during the last week of July ’20, down 28.0 percent from $56.05 for the same period in ’19. The COVID-19 pandemic continues to reduce global economic activity. However, oil prices rose in July as OPEC and partner countries maintained production cuts and the United States continued to reduce drilling activity.
Home Sales
The Houston area housing market has fully regained its spring losses and returned to pre-COVID sales volumes though the recovery may be short-lived as listings dry up. Houston-area realtors sold 10,975 single-family homes in July ’20, up 23.0 percent from the same month last year and the most ever for a single month in Houston. Year-to-date sales totaled 51,388 single-family homes, up 2.7 percent from the first seven months of ’19.
Natural Gas
The cost of consumer goods and services as measured by the Consumer Price Index for All Urban Consumers (CPI-U) rose 1.0 percent nationwide from July ’19 to July ’20, according to the U.S. Bureau of Labor Statistics. Core inflation (all items less the volatile food and energy categories) increased 1.6 percent since July ’19.
Rig Count
Baker Hughes reports 244 drilling rigs were working in the U.S. during the second week of August ’20. That’s down 691 rigs, or 73.9 percent, from the same week in August last year.
This Week's State Of The Economy - What Is Ahead? - 02 July 2020
Wells Fargo Economics & Financial Report / Jul 04, 2020
It was a mildly busy week for foreign economic data and events, while global COVID-19 cases continued to rise.
This Week's State Of The Economy - What Is Ahead? - 07 October 2020
Wells Fargo Economics & Financial Report / Oct 10, 2020
In the immediate fallout after the lockdowns in the early stages of this pandemic, there was a lot of discussion about the shape of the recovery.
This Week's State Of The Economy - What Is Ahead? - 21 January 2022
Wells Fargo Economics & Financial Report / Jan 24, 2022
The Texans have earned a top draft position yet again, the Cowboys are home again for the remainder of the playoffs, and inflation concerns that continue to mount, along with ongoing supply chain disruptions, are weighing on homebuilder confidence.
This Week's State Of The Economy - What Is Ahead? - 26August 2022
Wells Fargo Economics & Financial Report / Aug 29, 2022
I can understand how the opportunity to participate in lots of scintillating economic policy discussions could make fishing look exciting in comparison.
This Week's State Of The Economy - What Is Ahead? - 04 November 2022
Wells Fargo Economics & Financial Report / Nov 07, 2022
Employers continued to add jobs at a steady clip in October, demonstrating the labor market remains tight and the FOMC will continue to tighten policy.
November 2020 Economy At A Glance
Wells Fargo Economics & Financial Report / Nov 12, 2020
U.S. gross domestic product (GDP) grew 7.4 percent, or $1.3 trillion in Q3, adjusted for inflation.
This Week's State Of The Economy - What Is Ahead? - 23 December 2020
Wells Fargo Economics & Financial Report / Dec 26, 2020
Vaccines are here, but they are not yet widely available in a way that can stem the spread of a disease that grows by 200K a day.
This Week's State Of The Economy - What Is Ahead? - 03 June 2022
Wells Fargo Economics & Financial Report / Jun 08, 2022
While talk of recession has kicked up in recent weeks, the majority of economic data remain consistent with modest growth.
This Week's State Of The Economy - What Is Ahead? - 25 March 2022
Wells Fargo Economics & Financial Report / Mar 27, 2022
The fact that capital goods shipments surprised on the upside was one of the few things that went right in this week\'s durable goods report.
This Week's State Of The Economy - What Is Ahead? - 11 December 2020
Wells Fargo Economics & Financial Report / Dec 14, 2020
Emergency authorization of the Pfizer-BioNTech COVID vaccine appears imminent, but the virus is running rampant across the United States today, pointing to a grim winter.
