Houston didn’t stop growing when oil prices fell in the 1990s, and despite the massive layoffs across the energy industry, the city will continue its trend of expanding faster than the rest of the country, an economist said at a planning conference Friday.
“We’re going to lose a lot of jobs,” Adam Perdue, an economist with the University of Houston Bauer Institute for Regional Forecasting, said during a panel discussion on the slump’s affect on Houston’s neighborhoods. “We’re going to have a lot fewer jobs than we would’ve had because of the upstream contraction. But after that, we’ll go right back to having a growth rate that’s higher than the rest of the U.S. Just like we saw in the 1990s.”
The ruinous bust of the 1980s permanently scarred Houston, leaving indelible marks on the city’s economy and neighborhoods, said Qisheng Pan in the urban planning and environmental policy department at Texas Southern University. Bearing the brunt of the collapse was Southwest Houston, where apartment complexes that sprung up overnight during boom times to house oil workers were suddenly abandoned, Pan said Friday at the annual conference for the Association of Collegiate Schools of Planning in Houston.
More than three decades later, parts of Southwest Houston remain the least resilient to tough times, based on its poor rates of educational attainment, median income, percentage of homeowners and availability of public transportation. Baytown and Greenspoint also ranked poorly, according to Pan’s analysis.
But Houston overall has learned its lesson from that painful period and times have changed, Pan said.
“When oil prices dropped, almost everyone in Houston got hurt,” he said. “Today it’s very different.”
Houston remains the energy capital of the world, but health care has also claimed a greater economic role. Sandwiched between the oil and gas headquarters in the Energy Corridor along Interstate 10 are hospitals and other health care facilities that are now helping fuel Houston’s economy, too, Pan said
The building spree in Houston’s petrochemical corridor will also help soften the downturn’s blow, Perdue said, as thousands of construction workers descend on the east side to build and expand chemical plants and refineries in an effort to take advantage of cheap natural gas prices. By some estimates, nearly $50 billion in heavy industrial development is being added to the Houston metropolitan area, enough to rebuild downtown over twice.
Those projects are expected to stretch on at least until 2018, which should help offset some of the pain experienced by exploration and production companies as well as oil field services firms, Perdue said.
“The building boom we’re getting in the petrochemical complex is spread out over multiple years versus the upstream collapse that’s going to be harming us this year and next year,” he said.