Houston’s economy has emerged from the recession and is inching upward in a steady recovery that is being fueled by higher oil prices and positive national trends, veteran Houston economist Dr. Barton Smith of the University of Houston’s Institute for Regional Forecasting analyses.
After losing some 100,000 jobs in 2009 – a disastrous year for the local economy – Houston appears to be adding about 1,000 jobs a month now, Smith said Thursday before a crowd of 1,000 business people at the Hyatt Regency Hotel.
“We are forecasting modest job growth for the rest of the year," Smith said. "But it will be positive.”
With the rising price of oil so far this year — it’s now over $80 a barrel — drilling for oil has picked up significantly, which is a boost for Houston’s economy, Smith said.
Improvement in the energy business will help Houston, although there is a dark, murky cloud on the horizon — the horrific BP oil spill in the Gulf of Mexico. Political backlash from the spill could put a damper on offshore drilling and hurt Houston oil companies and drilling supply businesses.
“I am deeply worried about the oil spill off the coast of Louisiana,” Smith said. “This is going to have negative political consequences — negative to Houston and negative to the nation.”
Houston’s real estate market is in fairly good shape because overbuilding was not as significant here as it was in some states, Smith said. Although a lot of construction jobs have been lost, home builders in Houston are poised for a recovery.
Most Houston homeowners did not lose huge amounts of home equity value in the recession, unlike homeowners in many cities, according to Smith. That should help give the local economy a stronger footing for a rebound.
“Houston home owners didn’t take a big hit in home equity,” Smith said. “Houston probably has fewer upside down mortgages than any city in the U.S.”
The speech was a farewell for Smith, who has been with the University of Houston for 37 years. He started his popular economic presentations in 1985, but he is retiring, and this was his final public symposium.