2010 houston economic outlook

8/9/2019 2010 Houston Economic Outlook

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COLLIERS INTERNATIONAL | HOUSTON ECONOMIC OUTLOOK | 2010

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HOUSTON | 2010

Our Knowledgeis your Pro


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Table of Contents

Click to edit Master text stylesHouston 2010 Economic Outlook 3

Population Trends 4

Job Growth Trends

Business C imate 6

Energy (Oil and Gas) 7

Petrochemicals 8

NASA/Johnson Space Center 10

Mobility Infrastructure 10

Houston Airport System 11

Texas Medical Center 12

Biotechnology 13


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Houston Ranked Among Top U.S. Metros in 2010

Houston ranked among the top-performing U.S. metros at the start of 2010, even as the effects

CUTIVE SUMMARY

COLLIERS INTERNATIONAL | HOUSTON | 2010

PLOYMENTof the economic recession that began in late 2007 continued to be felt globally. lthough 2009

was undeniably challenging with local job losses totaling 93,500, it should be noted that this was

the first year of job losses for Houston, following a stellar period of expansion and job growth

from 2005 to 2008. And while the local metro still has economic hurdles to overcome, Houston

is once again making headlines as one of the least affected markets in the nation. In its March

2010 issue, Forbes ranked Houston fourth in a list of 40 U.S. metros where the recession is

easing, largely based on the areas diverse economic base of growth industries. In the same

09: (95,200) jobs lost

08: 22,500 jobs gained

07: 103,500 jobs gained

PULATION

09: 5.8M

mont , ite e ection agazine ran e ouston i t in t e . . or corporate activity invo ving

new and expanded corporate facilities with capital investments over $1 million and/or the

addition of 20,000 square feet.

Houstons economic base comprises varied mature

industries led by the energy sector accounting for just over

50 percent of the local economy. Following the energy

price peaks at midyear 2008 ith crude oil trading at

- : grow

90-2000: 25.2% growth

ERGY

ude Oil: $76.39/barrel (2/2010)

$39.09/barrel (2/2009)

$95.39/barrel (2/2008)

tural Gas: .89 mcf 2 2010

$145 per barrel and natural gas over $13 per thousand

cubic feet the industry experienced increased volatility

due in large part to prevailing uncertainty regarding the

worst global economic recession in recent history.

Continued volatility notwithstanding, energy prices at the

beginning of 2010 were higher than one year ago, with

crude oil near $80 per barrel and natural gas approaching

.

$4.16/mcf (2/2009)

$7.55/mcf (2/2008)

PORT/EXPORT TRADE

AS Air Freight: 64.1M lbs. (1/2010)59.7M lbs. (1/2009)

t Total Tonnage: 220M tons (2009)

FEB. 09 FEB. 10

USTON-3.1% job growth

80,000 jobs lost

OB GROWTH & UNEMPLOYMENT

$5 per thousand cubic feet. The U.S. Energy Information

Administrations Short-Term Outlook released in March

2010 projected this upward trend in energy prices will

continue through 2011. Increased demand particularly

from emerging markets led by China and India with mass-

scale industrialization projects underway is the primary

reason many industry experts are convinced the era of low

tons

EMPLOYMENT 6.7% 8.5%

XAS-2.3% job growth

241,300 jobs lost


energy prices is over. According to the International

Energy Agencys estimates, U.S. energy demand is

expected to increase 23 percent by 2030, while global

energy demand will increase an even more significant 55

percent during the same period.

Houstons strategic location and core strengths including an expanding energy sector, strong

.-2.5% job growth

3.2M jobs lost


export import tra e activity, cutting-e ge me ica a vancements, an tec no ogica

breakthroughs across industries uniquely position it to play a vital role in meeting national and

global market demands. At a time of unprecedented geopolitical demographic shifts affecting

markets worldwide, Houston stands as a leader among U.S. metros of the 21st century.


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Houston Ranks 2nd in U.S. Population GrowthHouston ranks among the leading metropolitan areas in the U.S., and is the fourth largest city and the sixth

Click to edit Master text styleslargest Metropolitan Statistical Area (MSA) in the nation. In March 2010, the U.S. Census Bureau announced

Houston ranked second among the nations top 25 cities in annual population growth, which represents a

continuation of strong growth trends over the past two decades for both the city and metro area. Between 1990

and 2000, the Houston metro area increased an impressive 25.2 percent, making it one of the fastest growing

metropolitan areas in the country. With an estimated 5.8M residents in 2009, the Houston metro area is expected

to increase 6.8 percent over the next five years to 6.2M. On a more long-term basis, demographers project strong

population growth for the area over the next thirty years as domestic and international migration trends favor

Houstons geographical, cultural, and economic strengths.

The 2000 U.S. Census also showed a dramatic increase of 22.5 percent in Houston metro area households to

1.7M from 1.4M in 1990. From the most recent estimate of 2.0M households in 2009, demographers are

projecting an additional 8.9 percent increase to 2.1M households within the next five years (from 2009 to 2014).

The average household income for the metro area was estimated at $76,301 in 2009, with a 11.9 percent projected

increase to $85,409 by 2014. The median household income was estimated at $58,581 in 2009 and projected to

increase to $63,857 by 2014. By comparison, the national income levels fell below the Houston market ith the

2009 U.S. household average income estimated at $69,330 and the median income at $53,679.

DEMOGRAPHIC COMPONENTS OF POPULATIONHoustons strong economic base continues to be a

key factor driving both domestic and international

migration trends. In 2009, Houston ranked 2nd

among U.S. cities with the most Fortune 500

headquarters following only New York, with a

Houston MSA 2001-2008

tota o twenty-n ne ortune compan es

headquartered locally, and many other companies

maintaining U.S. administrative headquarters in

the metro area. Notably, Houston surpassed other

major metros on the Fortune 500 list, including

Dallas with fourteen (14), as well as Chicago and

Atlanta each with nine (9) corporations. Houston

1990-2000 2000-2014

25.2% 31.1%

22.8% 28.0%

13.2% 12.7%

Houston

Texas

U.S.

. .

Houston area residents are well-educated with the majority of the population over 25 years of age holding a high

(7) companies on the 2009 Fortune 100 Fastest-

Growing Companies list , as well as eleven (11)

companies on Fortunes 100

Best Companies to Work For list (ranked in

February 2010).

school diploma, and residents with college/graduate educational studies outnumbering those with less than a high

school education. This high level of educational achievement is not surprising given Houstons numerous

nationally recognized colleges and universities, as well as technical and trade schools, including Rice University,

University of Houston, University of St. Thomas, Texas Southern University, Houston Baptist University, Baylor

College of Medicine, San Jacinto College, and Houston Community College.

Bolstered by above-average demographic trends and a strong base of diverse industries, Houston is well-positioned

Sources: U.S. Census Bureau, March 2009; SRC, LLC, March 2010;Greater Houston Partnership

. ,

company represented locally, Houston now stands as a global example of economic diversity. The area is home to

a thriving base of industries including medical/biomedical technology, global trade (particularly airborne and

waterborne domestic/international cargo), aeronautics, plastics manufacturing, electronics, computers, software

design and integrated power.


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Houston Employment Sector While the slowing of negative indicators by early 2010 has been a welcome relief,

SELECT MAJOR AREAEMPLOYERS

Click to edit Master text stylesleading economists continue to forecast a slow economic recovery for the U.S. ith

little to no significant job growth expected before 2011. Houston is projected to gain

2,000 to 5,000 new jobs by the end of 2010, which although well below previous

periods of growth, nevertheless represents an improvement over 2009 and is

significantly stronger than the ongoing job losses projected for other U.S. metros of

comparable size. Among the most important lessons learned from the credit meltdown

of September 2008 was an increased appreciation for the complex interconnection

between global economies. Following Houstons economic slowdown in 2009 resulting

from a severe reduction in global demand for energy, the local recovery continues to

hinge largely on the strengthening of both national and global markets.

Overall, Houstons business strengths are grounded in a diverse base of future-growth

industries that have consistently generated above-average job growth trends. Between

2005 and 2008, Houstons job growth repeatedly surpassed major metro areas of

comparable size as ell as the national average job growth rate. The local economy

succumbed to the global recession in the final quarter of 2008, however, following thedramatic credit meltdown and the subsequent near paralysis of almost all global

markets. In the twelve months ending in December 2009, the Bureau of Labor

Statistics estimated Houston lost 92,500 jobs, representing a -3.5% job growth rate

(note: preliminary estimates for all U.S. metros are subject to revision in 2010). By

comparison, the state of Texas and the U.S. recorded -2.6% and -4.0% job growth rate,

respectively, in 2009. Against the national job losses reaching 5.5 million in the twelve

months ending in December 2009 and 6.5 million since December 2007 Houstons

employment shrinkage has been relatively contained. Below is the 2009 comparative

year-over-year percent change in employment levels for the top 10 U.S. metros.

HOUSTON AMONG 10 MOST POPULOUS U.S. MAJOR METROS

-1.7

-1.7

-1.4

-0.5Washington MSA

Boston MSA

Dallas/Fort Worth MSA

New York MSA

Percent Change in Employment

Dec 2008 Dec 2009

-3.5

-3.0

-3.0

-2.5

-2.3 Miami MSA

Philadelphia MSA

Los Angeles MSA

United States

Houston MSA

-4.4

-4.1 Chicago MSA

Atlanta MSA

Sources: U.S. Bureau of Labor Statistics, February 2, 2010; Greater Houston Partnership


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Houstons Strong Business ClimateHouston has long been recognized among the most competitive U.S. cities for corporate relocation and expansion


Texas Medical CenterPort of Houston

Houstons Diverse Base of

Future-Growth Industries

activity. In March 2010, Site Selection Magazine ranked Houston the 5th strongest metropolitan area in the U.S.

for corporate real estate activity in 2009. In addition to its diverse growth industries and educated/skilled

workforce, a key factor underscoring Houstons business appeal is the fact that it is one of the least expensive

major U.S. cities in which to conduct business. Significant benefits include the absence of state or city income

taxes, no state property tax, as well as an exceptionally low cost of living index.

Houston Airport System

Worlds Largest Medical Complex

(1,000 Acres)

46 Member Institutions

5.5M patients/yr.

Economic Impact: $12.3B

NASA/Johnson Space Center

Ranked #1 in US Intl Commerce

Ranked #1 in US for Imports

Ranked #2 in US Total Tonnage

Ranked #7 largest US containerport

Economic Impact: $118B

Ranked #4 Airport System U.S.Ranked #6 Airport System Globally

50.5 M Passengers in 2008

Economic Impact: $24.2B

1,620-Acre ComplexMajor Employers:

Boeing Company, Lockheed Martin,

Brown & Root, & Northrop Grumann

Economic Impact: $3.5B Houston Energy Industry

Global Energy CapitalSources: Federal Reserve Bank of Dallas; Port of Houston

Authority; The Campbell-Hill Aviation Group, Inc.

As a major transportation hub with two major airports, a world-renowned port, and superior rail and road

infrastructure, Houston facilitates the interconnection of global business locations. Business alliances with major

U.S. and international markets is further enhanced by the presence of 91 foreign consulate offices in Houston. In

2009, Houston ranked third in the U.S. following New York and Los Angeles in foreign consulate

representation.

Houstons ability to foster continued expansion in future-growth industries responsible for generating high quality,

HOUSTON

e -pa o s across a us ness sec ors as p ace n e op er among . . c es. s numerous us ness

advantages, Houston is well-positioned to successfully compete in todays global marketplace.


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Houston is internationally recognized as the global energy capital, with virtually every segment of the energy

Houston Global Energy Capital

Click to edit Master text stylesindustry represented by over 5,000 firms in the region. It is also known as the global center for integrated power,

a fast-growing new sector of the energy industry, and accounts for 57.1% of the total U.S. capacity for natural gas

transmission. In just over a decade, the number of Houston-based energy trading companies has tripled, with

petrochemical capacity in the area nearly four times larger than the nearest competing U.S. site. All major oil and

gas companies have extensive operations in the area, including Shell Oil Company, ExxonMobil, ChevronTexaco,

BP America, Citgo, ConocoPhillips, Devon Energy, Lyondell-Citgo Refining, Marathon Oil, Anadarko Petroleum,

Unocal, Harvest Natural Resources, Amerada Hess, Adams Resources & Energy, Burlington Resources, Newfield

Exploration, Plains ll American, and TotalFina.

Between 2000-2008, global consumption of energy and energy-related

products increased dramatically, sending energy prices to record-breaking

peaks by mid-2008. In the second half of 2008, however, energy prices

plummeted as the economic recession severely cut energy demand worldwide.

Since September 2009, however, crude oil prices have consistently ranged

-

$160 $12

, .

barrel, a dramatic 95.4 percent increase from $39.09 in February 2009.

Natural gas prices, have also improved, albeit at a slower, but still significant,

rate of increase of 17.5 percent to $4.89 per mcf in February 2010 from

$4.16 per mcf one year ago.

HISTORICAL CRUDE OIL PRICES HISTORICAL NATURAL GASPRICES

$40

$60

$80

$100

$120

$140

$4

$6

$8

$10

Feb 2010: $76.39/bbl

Jun 2008: $145.31/bbl

Feb 2010: $76.39/bbl

Jun 2008: $145.31/bbl

$/bbl

$/mcf

Feb 2010: $4.89 mcf

Jun 2008: $10.82 mcf

Feb 2010: $4.89 mcf

Jun 2008: $10.82 mcf

$0

$20

1990

1992

1994

1996

1998

2000

2002

2004

2006

Jun-08

2009

$0

$2

1990

1992

1994

1996

1998

2000

2002

2004

2006

Jun-08

2009

2,100U.S. ROTARY RIG COUNTS The U.S. Energy Information Administrations (EIA)

-

Feb-10

Feb-10

900

1,100

1,300

1,500

1,700

1,900

Feb 2010: 1,350

Jul 2008: 1,957

Feb 2010: 1,350

Jul 2008: 1,957

indicates crude oil and natural gas prices will likelycontinue increasing over the next six to twelve months.

EIA projects spot crude oil prices will average $80 per

barrel by midyear 2010, $82 per barrel by the end of this

year, and $85 per barrel by the end of 2011. Natural gas

prices are projected to average $4.67 per mcf at midyear

2010 increasin to .91 er mcf at ear-end and 5.2

RigCount

500

700

1990

1992

1994

1996

1998

2000

2002

2004

2006

Jul-08

2009 Source: Energy Information Administration; West Texas Intermediate; Baker Hughes; Greater Houston

Partnership

. .

per mcf at the end of 2011. Overall, recovery for the

energy sector is underway, with analysts beginning to

anticipate the return of supply-demand fundamentals

driving rising prices.Feb-10


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Houston is a global leader in manufacturing petrochemicals, with the $15 billion Houston Ship Channel

Houstons Petrochemical & Plastics Industry

Click to edit Master text stylesrecognized as the largest petrochemical complex in the U.S. The area is home to a significant number of chemical

plants from diverse international companies located in the regions largest petrochemical plants including Bayport

Industrial District, Battleground Industrial Complex, Bayport Shipping Terminal, and the Houston Ship

Channel.

According to SRI Consulting, a leading research service for the international

chemical industry, the Houston region accounts for approximately 41 percent of the

petroc em ca pro uct on ase n t e . . a most our t mes t at o ts nearest . .

competitor). In 2007 (the most recent data available), the Houston area accounted

for 55.6 percent of polypropylene resins, 42.4 percent of polyethylene resins, and

37.5 percent of polyvinyl chloride resins in the U.S.

Among the most significant projects underway is the $7 billion expansion to the Motiva Port Arthur Refinery

designed to double capacity to 600,000 barrels per day, which upon completion would make it the largest oil

. . .

and Saudi Aramco and is expected to help meet much of the growing global demand for energy and energy-related

products. According to the International Energy Agencys estimates, U.S. energy demand will increase 23 percent

by 2030, while global energy demand will increase an even more significant 55 percent during the same period.

While the global economic recession has frozen much of the dramatic industrial expansion that highlighted the

past decade primarily in key emerging markets worldwide, global trends suggest growth will resume following the

- . ,

plastics industries to maintain a key role in meeting the global demand for energy and energy-related products.

HOUSTON REGION PLASTICS MANUFACTURING

Industry Establishments Shipment Value

Film, Sheets and Bags 38 $ 393,500,000

Pipes, Fittings & Shapes 24 $ 197,004,000

Polystyrene Foam 6 $ 42,561,000

MAJOR HOUSTON REGION CHEMICAL PLANTS

Air Liquide USA Huntsman Petrochemical Corp.

Air Products INEOS Olefins & Polymers

BASF Corporation LyondellBasell Industries

Bayer Material Science Lubrizol Corporation

Bottles 7 $ 201,706,000

Misc. Plastics Products 112 $ 769,174,000

Rubber Products 35 $ 93,609,000

Balance 15 $ 59,578,000

Total 237 $1,757,132,000

exas ty xy ny s,

Chevron Phillips Chemical Rohm and Haas Texas

Dow Chemical Company Shell Chemical

E.I. du Pont de Nemours Co. Solutia Inc.

Equistar Chemicals LP Solvay America Inc.

Goodyear Tire & Rubber Co. Union Carbide Corporation

Source: Energy Information Administration; Greater Houston Partnership

,

Mar 2010: British Petroleum (BP) expands presence in Houston, with Exploration and Production unit and the newlycreated BP Centralized Developments Organization to be based in Houston

Mar 2010: ExxonMobil pending $27 billion acquisition of XTO Energy Inc.

Feb 2010: Schlumberger (the worlds largest oilfield services provider with U.S. headquarters in Houston) acquires

Smith International for $11 billion

May 2009: Devon Energy combining International and Gulf Divisions to be based in Houston

May 2009: ExxonMobil to invest $125 billion in new projects over next 5 years

Source: Houston Business Journal; Houston Chronicle; Dallas Business Journal


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The Port of Houstons market strength and strategic location represents a winning combination for business

The Port of Houston

Click to edit Master text stylesgrowth and increased industrial development in the area. The economic impact of the Port of Houston is

significant, accounting for $117.6B of total economic activity in Texas, including $39.3B of total personal income,

and $3.7B in state and local taxes. Among the largest recent developments is the $1.2B Bayport Container and

Terminal Project estimated to generate $1B of annual business revenue, with an additional $40M in annual tax

revenue, as well as 12,000 new jobs created. The first phase of the project commenced operations in February

2007, followed by Phase II in May 2008, and Phase III scheduled to open in 2010 with 1,330 feet of additional

wharf, 18 Rubber Tire Gantry (RTG) yard cranes, six post Panamax cranes, a total of 7,000 feet of berthing space

at final build-out and 2.3M TEU (twenty-foot equivalent unit) capacity. The significant increase in demand for

waterborne cargo has been driven by several factors, including new trade agreements with Asia, Europe and Latin

America, as well as the overall expansion of global industrialization. In the U.S., the West Coast Longshoremen

strike of 2002 a ten-day shut down of 29 west coast ports with an estimated cost of $19B was a significant

factor increasing demand at the Port of Houston, as business leaders continue to seek new shipping patterns to

maximize their logistics operations transporting goods to markets worldwide.

Container and Warehouse Trends

Since 2002, U.S. port market activity has changed significantly in response to shifting global geopolitical dynamics,with container activity increasing dramatically. Container imports received at the Port of Houston Authority

(PHA) have moved away from Europe and towards Northeast Asia. Between 2002 and 2008, Northeast Asia

container activity increased from 2 percent to 23 percent, while container volume from Europe decreased from 45

percent to 29 percent during the same period. Asia is expected to continue gaining U.S. import market share,

with the strongest growth from China, India, Singapore and Vietnam. Increased activity for the Port of Houston is

expected to continue driving new industrial development in Houstons Southeast Industrial Corridor. Since 2006,

over 12M SF of new industrial distribution centers and warehouses were built near the PHA container facilities,

including 1M SF of refrigerated warehouse space, with an additional 11.7M SF proposed for the area.

Global Trends Driving Demand

Emerging alternate shipping patterns following West Coast Longshoremen strike of 2002 Increased need for alternative U.S. shipping ports to East and West coast ports

Significant increase in exports/ imports, particularly with Asia, Europe and Latin America

From 2002-2008, container activity from NE Asia increased from 2% to 23%, hile activity from Europedecreased from 45% to 29%

Increased global trade activity following the rapid industrialization of key emerging markets

230

Port of Houston Rankings in 2009

1st in U.S. for Foreign Tonnage

PORT OF HOUSTON AUTHORITY

TOTAL TONNAGE HANDLED 2001-2009

180

190

200

210

220

Tons(inmillions)

1st in U.S. for Imports2nd in U.S. for Total Tonnage

7th Largest U.S. Container Port

220 million tons of cargo handled in 2009

1.8 Million TEUs*

Source: Port of Houston Authority

160

2001 2002 2003 2004 2005 2006 2007 2008 2009

*twenty-foot equivalent unit, a measure for containers used inintermodal transportation via ships, rail, planes and trucks


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NASAs Johnson Space Center (JSC) is a $1.5B complex occupying 1,620 acres, first

NASA/Johnson Space Center

Click to edit Master text stylesestablished in 1961, and later renamed in 1973 in honor of the late President

Lyndon B. Johnson, a native Texan. JSC is one of NASAs largest research and

development facilities and mission control for all U.S. manned space flight

communications, including the International Space Station and Exploration

Programs. From the early space exploration projects Gemini, Apollo and Skylab,

came the historic moment when the first word from the moon was Houston, and

deservedly so, as it took a 15,000-member team in Houston to develop, test and put

into action what millions around the orld atched on television in 1969. Since its

inception, JSC continues to make significant advances in science, aeronautics,

technology, engineering and medicine.

Recent estimates show JSCs workforce represents over 16,000 jobs, including approximately 3,400 civil servants

and 13,000 contractor personnel employed onsite or in facilities in the area. JSCs top contractors include The

Boeing Company, United Space Alliance, Lockheed/Martin, Anadarko Industries, Jacobs Engineering, Honeywell,

Brown & Root, SAIC, Raytheon, Northrop Grumman, and Wylie Laboratories, among many others. According

to the Greater Houston Partnership, Houstons total trade in aircraft, spacecraft, and parts increased 53.2 percentin value to $1.4B in 2009 from $878.7M in 2008. The total JSC economic contribution to the local area economy

is estimated at $3.5B.

NASA Funding Increases $2B in 2009-2010

In May 2009, NASA announced an $18.69B budget for fiscal year 2010, a 5 percent increase from the funding

provided for 2009. Under the Obama administration, a total of $2B has been added to NASAs 2009 and 2010

fiscal bud ets. While administration announcements in earl 2010 indicate NASAs 2011 bud et is ex ected to

Houstons Mobility Infrastructure

.

increase by $5.9B, the cancellation of the Constellation and Ares V programs, together with the call for private

aerospace companies to increase their contribution to spacecraft building and transportation, raises legitimate

concerns regarding the possible long-term reduction of the role of spaceflight programs, in favor of exploration and

discovery, at NASA.

ous on s oca on n e sou cen ra . . s ra eg ca y p aces

equidistant from the nations major population centers New York

(1,675 miles) and Los Angeles (1,556 miles). Connection to major

national and international locations is facilitated through Houstons

excellent transportation infrastructure which includes the George

Bush Intercontinental Airport, William P. Hobby Airport, Ellington

Field, the Port of Houston, and the well-integrated mainline railroads

.

In the Houston MSA, extensive freeway system spans 575.5 miles and

is one of only two major U.S. cities where traffic congestion has

declined in the past ten years. This improvement is due to a massive

road construction program that averaged more than $1B annually.

Between 2003 and 2008, a boom in new construction projects for Houstons major freeways and tollways

si nificantl im roved mobilit and accessibilit for the re ion. Ex ansion of the Kat Freewa Interstate 10 as.

one of the most significant projects completed in October 2008, with other key improvement projects including

Loop 610/West Loop, Southwest Freeway (U.S. Highway 59 South), Grand Parkway (State Highway 99), North

Freeway (Interstate 45 North), Eastex Freeway (U.S. Highway 59 North); Crosby Freeway (U.S. Highway 90), Sam

Houston Tollway (Beltway 8), and Westpark Tollway.


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The Houston Airport System (HAS) is one of the worlds leading multi-airport facilities and includes George Bush

Houston Airport System


George Bush Intercontinental Airport/Houston (IAH),

situated 35 miles north of downtown Houston, is the

th

Intercontinental Airport, William P. Hobby Airport, and Ellington Field. HAS ranked fourth nationally and sixth

globally in passenger volume in 2009, carrying an impressive 48.5 million passengers and 766.3 million pounds of

air freight. With the economic recession hampering both business and personal travel, passenger and air freight

volume fell by 3.9 percent and 8.4 percent, respectively, from 2008.

.

in 2009 and offering 185 domestic and international

destinations, with nearly 700 daily departures including

non-stop direct flights to major cities in Europe, Mexico,

Latin America and Asia. IAH is served by 17 passenger

airlines and 12 all-cargo airlines handling more than 741

million pounds in cargo in 2009. Currently, IAH has five

runwa s and five terminals no takeoff and landin

curfews, and ample land to expand its facilities as

requirements demand. The scope and quality of IAH

facilities make it one of the top U.S. airports for

international air cargo traffic.

William P. Hobby Airport is located seven miles southeast of downtown Houston and is the nations 43rd busiest

commercial airport, handling over 8.5M passengers in 2009. Hobby Airport also serves as a major regional center

for corporate and private aviation with five passenger airlines offering scheduled service to approximately 65 U.S.

destinations, including direct or non-stop service to 31 destinations. There are 255 private aircraft based at

Hobby, including 91 corporate jets and five fixed-base-operators serving the airport.

Air CargoA strong increase in domestic and international trade with air freight cargo up 23 percent between 2000 and

2009 continues to drive activity at IAH and was the impetus behind the recently completed AirCargo Center, a

180 mi ion 165-acre comp ex. T e new cargo comp ex eatures a state-o -t e-art 500,000 SF are ouse

distribution center and ramp for 20 wide-body aircraft designed to increase IAHs cargo surface capacity by 75

percent. With over 900 air freight-related businesses in the area, IAH is among the leading distribution hubs in

the nation with a solid track record of growth and continued future expansion.

IAH Air Freight Statistics & Trends IAH ranked 16th largest air cargo hub in the

IAH AIR FREIGHT IN POUNDS(DOMESTIC & INTERNATIONAL CARGO)

. .

IAH is one of the fastest growing distributionhubs in the U.S.

Between 2000-2009, air freight cargo via IAHincreased 23% to 741M pounds

IAH has state-of-the-art facilities to globallytransport time-sensitive products

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

Houstons role as a major gateway for import-export trade is expected to continue

expanding

300,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

International Domestic

Source: Houston Airport System


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The Texas Medical Center (TMC) the worlds largest medical center represents one of Houstons major

Texas Medical Center

Click to edit Master text styleseconomic drivers and core industries ith an estimated regional annual economic impact of $14B. TMC is also

one of Houstons largest employers with 82,200 employees in 2009, not including the 16,000 physicians, scientists,

researchers and other advanced degree professionals in the life sciences.

The internationally-renowned, 1,000-acre TMC is the worlds largest medical complex with 48 memberinstitutions, including leading medical, academic and research institutions, all of which are non-profit and

dedicated to the highest standards of research, education and patient and preventive care. Member institutions

include thirteen (13) hos itals and two s ecialized atient facilities, as well as nineteen (19) renowned academic

and research institutions virtually covering all health-related careers including two medical schools, four nursing

schools, as well as schools of dentistry, public health, and pharmacy and fifteen (15) support services

organizations. Over 69,000 students including more than 5,000 international students are affiliated with

TMC, from high school, college and health profession graduate programs. More than 5.5M patients visited in

2009, including approximately 18,000 international patient visits.

In addition to the medical facilities and institutions of

g er earn ng, s a so ome o more an

professional office buildings, with the entire complex

covering more than 18 miles of public and private streets

and roadways, and 31M square feet of existing patient,

education, and research space.

TMC has continued to grow and expand over the past

several decades with the majority of growth occurring in the

past ten years. In 2006, TMC completed a 50-year Master

Plan which includes nine major initiatives for future

institutional growth and physical improvements designed to

further strengthen the campus. In 2007, the University of

Texas M.D. Anderson Cancer Center began construction ofthe Center for Advanced Biomedical Imaging Research.

Located in the 110-Acre University of Texas Research Park, the Center is a joint effort between the University of

TMC Patient Care Institutions

TMC Academic and Research Institutions

Texas Health Science Center, M.D. Anderson and General Electric Healthcare. Future growth continues with

TMCs approval of $7.1B in building and infrastructure investments between 2008 and 2012, with annual

research expenditures estimated at $1B.

Memorial Hermann Hospital System named in 2010 among

Top 50 Best U.S. Hospitals by HealthGrades

e niversity o exas . . n erson ancer enter

Texas Childrens HospitalMemorial Hermann Hospital System

The Methodist Hospital

St. Lukes Episcopal Hospital

Lyndon B. Johnson General Hospital

Quentin Mease Community Hospital

Ben Taub General Hospital

ay or o ege o e icine

The University of Texas Health Science Center at HoustonThe University of Texas M.D. Anderson Cancer Center

University of Houston College of Pharmacy

Rice University

Texas A&M University Health Science Center

Prairie View A&M University College of Nursing

Texas Womans University Institute of Health Sciences

The Institute for Rehabilitation and Research

The Hospice at the Texas Medical Center

Texas Heart Institute

Shriners Hospitals for Children Houston

Veterans Affairs Medical Center in Houston

Texas Southern University College of Pharmacy and

Health Sciences

Harris County Psychiatric Center

Houston Academy of Medicine


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Biotechnology and the life science industry continue expanding in the Houston region with more than 100

Biosciences & Biotechnology

Click to edit Master text stylesinstitutions and companies attracting over $1.5B in research and development funding annually. Between 2003

and 2008, the number of life sciences jobs in the region increased 14.4 percent to 22,000, according to a study

conducted in 2009 by the Texas Healthcare and Bioscience Institute. Leading research efforts in the area represent

established and emerging industries, including nanotechnology, pharmaceuticals, nutraceuticals,

genetics/genomics, biodefense and infectious diseases, stem cell research, and oncology.

Long known for its research-centric Texas Medical Center (TMC), the Houston region is gaining momentum in

the develo ment and commercialization of roducts ensurin its lace as a ma or biotechnolo and life sciences

cluster. Public and private sector support, including investments by entrepreneurs and venture capitalists, will

continue to be crucial in creating the necessary infrastructure to facilitate the entrance of both established and

start-up private companies committed to biotechnology.

Biosciences in 2009

Oct 2009 $8.3M grant for cancer, genetics research

M.D. Anderson Cancer Center awarded a 5-year, $8.3M grant from The Cancer Genome Atlas

Sep 2009 Baylor researchers discover fat cell blockerA team of Baylor College of Medicine and Japanese researchers discover molecule that blocks genes responsible forgenerating fat-cells

Apr 2009 New cancer treatment drug passes successful testing

Childrens Cancer Hospital (part of M.D. Anderson Cancer Center) researchers identify drug that prevents blood

vessels from contributing the growth of childhood cancer neuroblastoma

Mar 2009 Federal ban lifted on stem cell research fundingLifted ban coincides with Neuralstem Inc.s announcement that transplanted human neural stem cells in laboratory

Houston Area Biotechnology Business Parks

rats cou ea to a vancements in t e treatment o spina cor injuries or isease

Mar 2009 UT scientist awarded $7M for breast cancer research

Mauro Ferrari, nanomedicine scientist at The University of Texas Health Science Center at Houston and M.D.

Anderson Cancer Center awarded $7M Innovator Award from U.S. Department of Defense Breast Cancer Research

Program

Outside of the TMC, the 1,000-acre Research Forest located in The Woodlands (~30 miles north of downtown

- ,

companies. More recently established business parks/organizations geared towards biotechnology commercialization

in the Houston region include the Genesis Biotechnology Park and BioHouston, Inc. Genesis Biotechnology Park

comprises 16 innovative life science companies and researchers located just south of the TMC. The Park was

developed to increase venture capital interests in Houston and is committed to supporting start-up companies by

providing tenant options for shared office, wet laboratory space (including equipment), and flexible leases.

BioHouston, Inc., a non-profit corporation founded by Houston area academic/research institutions, is actively

leading a broad-based effort to strengthen Houstons position as a global competitor in life science and biotechnology.

BioHoustons Resource Center, the first incubator facility serving the Houston life sciences community, is housed atthe Genesis Biotechnology Park adding a key component to ongoing commercialization efforts. The Center is

specifically designed to serve start-up biotech and life sciences companies by offering access to shared laboratory space,

research resources, and networking opportunities with a community of biotech entrepreneurs.

From its base of cutting-edge research, Houston has taken the next step in its evolution as a primary life science

cluster by creating an environment conducive for private companies to develop and market life science products.

With key initiatives in place to bring together the public and private sectors, as well significant improvements to the

scope of services and incentives available to private companies, the infrastructure is in place to capitalize on Houstons

strong research base and convert it into commercialized product. With this process now in motion, the biotech future

in Houston looks bright.


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2010 houston economic outlook

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