3rd Annual Client Conference Hiring and the Houston Economy

Daniel Perez Liston, PhD University of St. Thomas-Houston

Presentation Outline

• World Economy • U.S. Economy • Texas Economy • Houston Economy • What does it all mean for 2015?

World Economy

Source: World Bank

U.S. Economy

• 3.2%, Real GDP (2015 forecast, this is slightly up from the previous forecast)

• 5.6%, Civilian Unemployment rate (Dec. 2014) • -0.4%, Consumer Price Index (Dec. 2014) • 1.83%, 10-Year Treasury Constant Maturity

Rate (Jan. 16, 2015) Sources: World Bank, Bureau of Labor Statistics, FRED

Real Gross Domestic Product, U.S.

Civilian Unemployment Rate, U.S.

Consumer Price Index, U.S.

10-Year Treasury Rate, U.S.

Texas Economy

Source: Dallas Fed.

Texas Economy

Texas Rig Count

Source: Dallas Fed.

Houston Economy • Houston’s economic outlook is increasingly

uncertain • In the business world, the rearview mirror is

always clearer than the windshield – Warren Buffett

Houston Economy

Houston Economy

Source: Dallas Fed.

Houston Economy

• Job growth for 2015 • What others are saying:

– Houston will add 62,900 jobs in 2015 (Patrick Jankowski, GHP)

– Houston will likely add 40,000-45,000 jobs (Bill Gilmer, Institute for Regional Forecasting)

Houston Economy

Source: Dallas Fed.

Houston Economy

• The Gulf’s petrochemical boom.

Source: Bauer’s Institute for Regional Forecasting

Houston Economy

Source: Dallas Fed.

What does it all mean for 2015?

• For Houston: – Job growth between 40,000 and 60,000.

However, the energy industry will see sizeable lays offs.

– Weaker economic growth – Population growth will continue to stimulate the

economy

What does it all mean for 2015?

• For your business: – Be cautiously optimistic – Be careful taking on new “risky” projects – Be conscious of overhead expenses – Look for the turnaround to take advantage of

business opportunities – Find a way to use your competencies in other

industries – The impact of the slowdown will be different in

each industry

What does it all mean for 2015?

• For your business: – How can you make a profit in this environment? – How can you be competitive? – You are going to have to make difficult decisions

(perhaps even layoff some folks) – This is the time to think outside the box.

Innovation can help get you through the slowdown

What does it all mean for 2015?

• For your business: – Find ways to gain market share – Find a way to do things cheaper and better – This slowdown wont be like 2007-2008; its more

limited to the energy sector

Thank you! Any Questions???