Presented by Patrick Jankowski, Vice President,

Research

Houston Economic Overview

Houston Area Profile

• 9 Counties

• 125+ Cities and towns

• Most Populous• Harris County

• City of Houston

Houston Area Profile

The Big Picture

2011 Gross Domestic ProductRank 20 Most Populous Metros $ Billions

11 Miami, FL 263.412 Seattle, WA 239.713 Minneapolis, MN 207.814 Detroit, MI 199.415 Phoenix, AZ 194.816 San Diego, CA 172.617 Baltimore, MD 148.318 St. Louis, MO 132.019 Tampa, FL 116.220 Riverside, CA 111.5

Fifth Largest U.S. Metro Economy

2011 Gross Domestic ProductRank 20 Most Populous Metros $ Billions

1 New York, NY 1,277.22 Los Angeles, CA 747.33 Chicago, IL 547.64 Washington, DC 433.15 Houston, TX 419.76 Dallas-Fort Worth, TX 391.37 Philadelphia, PA 353.38 San Francisco, CA 347.19 Boston, MA 325.610 Atlanta, GA 283.3

Source: U.S. Bureau of Economic Analysis

Change in Real GDP ’10 – ’11 Rank 20 Most Populous Metros %

11 Los Angeles, CA 1.712 Tampa, FL 1.613 Chicago, IL 1.414 St. Louis, MO 1.215 Washington, DC 1.116 Baltimore, MD 1.117 Philadelphia, PA 1.018 New York, NY 0.819 Miami, FL 0.620 Riverside, CA 0.4

Fastest Growing Major Metro Economy

Change in Real GDP ’10 – ’11 Rank 20 Most Populous Metros %

1 Houston, TX 3.72 Detroit, MI 3.53 Dallas-Fort Worth, TX 3.14 Seattle, WA 2.95 San Francisco, CA 2.66 Boston, MA 2.47 San Diego, CA 2.38 Atlanta, GA 2.29 Minneapolis, MN 1.910 Phoenix, AZ 1.8

Source: U.S. Bureau of Economic Analysis

Houston has a long history of economic growth.

Most Populous U.S. Metro Areas - 2012

Rank Metro Area Population1 New York 19,831,8582 Los Angeles 13,052,9213 Chicago 9,522,4344 Dallas-Fort Worth 6,700,9915 Houston 6,177,0356 Philadelphia 6,018,8007 Washington 5,860,3428 Miami 5,762,7179 Atlanta 5,457,831

10 Boston 4,640,802

Most Populous U.S. Metro Areas - 2012

Rank Metro Area Population11 San Francisco 4,455,56012 Riverside 4,350,09613 Phoenix 4,329,53414 Detroit 4,292,06015 Seattle 3,552,15716 Minneapolis 3,422,26417 San Diego 3,177,06318 Tampa 2,842,87819 St. Louis 2,795,79420 Baltimore 2,753,149

Fifth Most Populous Metro

Source: U.S. Census Bureau

Rank Metro Areas Change Since 7/1/11

1 Houston 125,185 2.1%2 Dallas-Ft Worth 131,879 2.0%3 Phoenix 77,456 1.8%4 Seattle 54,338 1.6%5 Washington 89,129 1.5%6 Atlanta 83,153 1.5%7 Miami 74,809 1.3%8 San Francisco 58,642 1.3%9 San Diego 38,880 1.2%

10 Riverside 48,255 1.1%

Fastest Growing Major Metro

Rank Metro Areas Change Since 7/1/11

11 Minneapolis 33,215 1.0%12 Los Angeles 107,781 0.8%13 Boston 37,458 0.8%14 Baltimore 19,471 0.7%15 Tampa 16,440 0.6%16 New York 101,928 0.5%17 Philadelphia 21,326 0.4%18 Chicago 26,715 0.3%19 Detroit 4,094 0.1%20 St. Louis 2,419 0.1%

Source: U.S. Census Bureau

Growth is the norm for Houston.

Employment Picture

Employment

Employment

Employment

325,400 = jobs created since

recession botto

m

Source: U.S. Bureau of Labor StatisticsSeasonally adjusted

100%

Percent of jobs recovered through June ’13Houston vs. Top 10 Metros

Houston vs. the Top Metros

Source: U.S. Bureau of Labor StatisticsSeasonally adjusted

100%

Percent of jobs recovered through June ’13Houston vs. Top 10 Metros

Houston vs. the Top Metros

17.6%

23.0%

39.5%

44.8%

49.4%

60.6%

66.2%

80.9%

108.0%

128.8%

246.8%

Riverside

Detroit

St. Louis

Phoenix

San Francisco

Tampa

San Diego

Seattle

Minneapolis

Baltimore

Houston

Source: U.S. Bureau of Labor StatisticsSeasonally adjusted

Percent of jobs recovered through June ’13Houston vs. Second Tier Metros

Houston vs. the Top Metros

100%

Job Growth

Job Growth

Annual Job Growth (000s)

Source: U.S. Bureau of Labor Statistics

5,400

9,900

7,0005,900

12,000

4,100

800

3,000

11,100

13,500 13,300

-1,100

12,800

Houston-Sugar Land-Baytown MSAJune ’12 – June ’13

5.4%

5.5%

2.9%4.1%

4.4%

3.2%

2.7%

4.1% 5.0%

-1.1%

3.6%

2.1%

2.5%

Source: Texas Workforce Commission

Annual Employment Change

Unemployment

6.7% = Houston’s current unemployment

rate

What’s driving Houston’s growth

Energy

28.8% of U.S. jobs in oil and gas extraction

11.7% of U.S. jobs in oil field services

16.5% of U.S. jobs in O&G and construction machinery manufacturing

World Energy Headquarters

                           

And energy jobs pay very well.

Average weekly wage

Oil and Gas Extraction = $4,301

Support Activities for Mining = $2,353

Ag., Construction, and Mining Machinery = $2,267

All Industries = $1,255

Energy entering a new phase

Increased domestic oil and gas production.

Cheap, abundant gas to spur manufacturing re-shoring.

33 local chemical plant expansions underway.

Oil Prices & Employment Growth

2,800 engineering and architectural firms operate here

20 of the world’s 25 largest with Houston operations

86,380 engineers, architects and technicians

Houston is an engineering center.

What’s driving growth . . . Foreign Trade

Houston-Galveston Customs District$ Billions (U.S.)

Exports

Imports

International Trade -Houston-Galveston Customs District

• Ports – Houston, Galveston, Texas City, Freeport, Corpus, Victoria

• Airports – Bush Intercontinental, Sugar Land Regional

• 41 countries with $1+ billion in trade

• 17 commodities with $1+ billion in trade

– Oil, industrial equipment, computers, chemicals, plastics, rubber, iron and steel products, copper products, motor vehicles, scientific instruments, beverages, grains

Foreign Trade

• 15th Busiest Port in the World• First in the U.S. in foreign tonnage• Second in U.S. in total tonnage• 220 million tons annually• 8,000+ deep draft ships called at

Houston• Service between Houston and

more than 1,000 world ports

Foreign Trade – Port of Houston

Houston’s Top 25 Export Destinations

Country Trade ($B) Country Trade ($B)

Mexico $13.470 Argentina $2.579

Brazil $9.144 Nigeria $2.480

Netherlands $7.899 Korea, Republic Of $2.762

Venezuela $3.629 Ecuador $2.325

Chile $4.212 Turkey $3.025

Colombia $4.801 Panama $1.817

United Kingdom $3.514 Russia $1.708

Belgium $3.459 Germany $2.088

Singapore $3.614 Costa Rica $1.699

China $3.835 India $2.163

France $2.459 U.A.E. $1.791

Saudi Arabia $2.099 Japan $1.502

Peru $2.616Source: WISER Trade

Houston’s Top 25 Export Destinations

Projected Economic Growth – Houston’s 25 Largest Trading Partners

Country∆ GDP

’12 – ’13 Direction Country

∆ GDP

’12 – ’13 Direction

Mexico 3.7 ↔ Argentina 4.0 ↔

Brazil 4.1 ↑ Nigeria 6.6 ↓

Netherlands 0.8 ↑ Korea, Republic Of 4.0 ↑

Venezuela 3.2 ↓ Ecuador 3.9 ↓

Chile 4.5 ↔ Turkey 3.2 ↑

Colombia 4.4 ↔ Panama 8.5 ↑

United Kingdom 2.0 ↑ Russia 3.9 ↔

Belgium 0.8 ↑ Germany 1.5 ↑

Singapore 3.9 ↑ Costa Rica 4.0 ↔

China 8.8 ↔ India 7.3 ↑

France 1.0 ↑ United Arab Emirates 2.9 ↑

Saudi Arabia 4.1 ↓ Japan 1.7 ↓

Peru 6.0 ↑ Source: International Monetary Fund

Outlook for Houston’s Export Destinations

’13 Outlook for Houston’s

Top Export Destinations

GDP Direction # Countries

↑ 13

↔ 7

↓ 5

Outlook for Houston’s Export Destinations

International business presence

What are you doing right now

More than 100 international companies have opened, expanded or relocated to Houston in the last few years…

• Three Airports– Bush Intercontinental– William P. Hobby Airport– Ellington Airport

• Passengers– 50.3 million passengers in ’12

• Air cargo– 419,000 metric tons in ’12

• 13 international passenger carriers– 68 destinations in 30 countries

• 11 domestic carriers– 119 domestic destinations

Aviation supports growth

Houston’s Global Reach

38

Source: Houston Airport System

Texas Medical Center 45.8 million gross sq ft physical space 106,000 employees

54 member institutions, including 17 hospitals 7.2 million patient visits annually More than 16,000 international patients

Houston has the nation’s largest medical center.

• Growing population– 125,000 people/year

• Infant population– 65,000 births/year

• In-Migration– 60,000 newcomers/year

• Aging population– 15,000 seniors (65+)/year

Population Growth

Source: U.S. Census Bureau

Houston Outlook

Population

Employment

Gross Regional Product

Presented by Patrick Jankowski, Vice President,

Research

Houston Economic Overview