Houston economic outlook

April 2016

Presented by:

Patrick Jankowski

Senior Vice President, Research

Greater Houston Partnership

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Houston Area Profile

• 9 Counties

• 125+ Cities and towns

• Most Populous

• Harris County

• City of Houston

Houston Area Profile

Population Estimates, U.S. Cities

Rank Metro Area Residents

July 1, 2014

Residents added

7/1/13 to 7/1/14

1 New York, NY 8,491,079 52,700

2 Los Angeles, CA 3,928,864 30,924

3 Chicago, IL 2,722,389 82

4 Houston, TX 2,239,558 35,752

5 Philadelphia, PA 1,560,297 4,245

6 Phoenix, AZ 1,537,058 24,616

7 San Antonio, TX 1,436,697 24,931

8 San Diego, CA 1,381,069 21,225

9 Dallas, TX 1,281,047 20,322

10 San Jose, CA 1,015,785 11,964

Source: U.S. Census Bureau

Fourth Most Populous City

Population Estimates, U.S. Metros

Rank Metro Area Population

As of 7/1/15 Change Since

4/1/10

1 New York 20,182,305 614,895

2 Los Angeles 13,340,068 511,231

3 Chicago 9,551,031 89,926

4 Dallas-Fort Worth 7,102,796 676,582

5 Houston 6,656,947 736,531

6 Washington 6,097,684 461,452

7 Philadelphia 6,069,875 104,532

8 Miami 6,012,331 447,696

9 Atlanta 5,710,795 424,067

10 Boston 4,774,321 221,919

Source: U.S. Census Bureau

Fifth Most Populous Metro

Gross Domestic Product- 2014

Rank Metro Area $ Billions

1 New York 1,558.5

2 Los Angeles 866.7

3 Chicago 610.6

4 Houston 525.4

5 Dallas-Fort Worth 504.4

6 Washington D.C. 471.6

7 San Francisco 412.0

8 Philadelphia 391.1

9 Boston 382.5

10 Atlanta 324.9

Source: U.S. Bureau of Economic Analysis

Fourth Largest Economy

Fortune 500 Companies Headquartered In Houston

Company (Rank) Revenues

($ billions) Company (Rank)

Revenues ($ billions)

Phillips 66 (7) 149.4 Apache (218) 13.9

ConocoPhillips (51) 55.9 Marathon Oil (227) 13.3

Enterprise Products Partners (59) 47.9 Cameron International (275) 10.8

Sysco (61) 46.5 Group 1 Automotive (291) 9.9

Plains GP Holdings (67) 43.5 CenterPoint Energy (313) 9.2

Halliburton (96) 32.9 Targa Resources (329) 8.6

Occidental Petroleum (115) 25.9 Calpine (353) 8.0

Baker Hughes (119) 24.6 FMC Technologies (357) 7.9

National Oilwell Varco (127) 23.1 Quanta Services (361) 7.8

Anadarko Petroleum (162) 18.5 Buckeye Partners, LP (406) 6.6

EOG Resources (167) 18.0 KBR (424) 6.4

Kinder Morgan (193) 16.2 MRC Global (448) 5.9

Waste Management (217) 14.0 Spectra Energy (449) 5.9

Source: Fortune, June 2015

Third in Fortune 500 HQs

Recent

Economic

History

240.9 238.4 254.5286.2

316.5352

391.9414.8

373.5400.1

441.7475

515.2 525.4

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14Source: U.S. Bureau of Economic Analysis

Metro Houston GDP – $ Billions (Nominal)

Strong GDP Growth

145.3

179.6

203.8

402.9

434.2

587.8

640.7

776.7

821.6

1,300.9

Chicago

Philadelphia

Boston

Atlanta

Miami

Los Angeles

Washington D.C.

Dallas-Fort Worth

Houston

New York

Source: U.S. Bureau of Labor StatisticsNot seasonally adjusted

Jobs (000s)

Jobs created Jan ’00 – Dec ’15

569.7

528.1

526.4

433.3 397.3 363.5

327.6

179.7

93.1 85.8

Houston Dallas-FortWorth

New York Los Angeles Washington Miami Atlanta Boston Philadelphia Chicago

Source: U.S. Census Bureau

10 Largest U.S. Metros (000s)

Population Growth 4/10 – 7/15

A Few Words About Population

Other12,720 0.2%

Mixed Race180,434

2.9%Asian

418,2376.7%

Black1,037,595

16.5%

Hispanic2,228,634

35.5%

White2,406,315

38.3%

Race and Ethnicity

Source: U.S. Census Bureau

A Diverse Population

30.6%

35.5%

42.6%

38.3%

13.2%

16.5%

13.6%

6.7%

U.S. 2060 Projected

Houston MSA

Race/Ethnicity: Houston Now and the U.S. in 2060% Distribution of populations

Hispanic White Black Asian & Other

Source: U.S. Census Bureau

Houston is the nation’s future

Houston’s Current Situation

20

40

60

80

100

120

$ P

er B

arre

l

Source: U.S. Energy Information Administration

Spot Price, West Texas Intermediate

Crude down $70 from its peak

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Source: Baker Hughes

U.S. Rotary Rig Count

Nearly 1,500 rigs have been idled

Directional

drilling and

fracking

8.6 9.0

7.4

6.6

5.8

5.2 5.1 5.1 5.0 5.4 5.5 5.6

6.5

7.5

9.2 9.5.

8.7

'80 '85 '90 '95 '00 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16*

Source: U.S. Energy Information Administration * Projected

U.S. Crude Production, Million Barrels Per Day

Production Growth

We’ve been here before

Oil Prices Losses

Recession Peak Trough Rigs Energy Jobs

Mid-1980s $30.75 $12.05 -3,766 (-83.3%) -53,600 (-46.3%)

Early-1990s $35.89 $14.57 -526 (-46.3%) -6,800 (-10.8%)

9-11/Enron $34.55 $19.53 -528 (-41.3%) -4,700 (-7.3%)

Great Recession $136.96 $39.51 -1,119 (-44.4%) -11,900 (-13.6%)

Current $106.31 $30.32 -1,488 (-77.0%) -22,700 (20.2%)

Note: All losses calculated from the monthly average Sources: U.S. Energy Information Administration, Baker Hughes, U.S. Bureau of Labor Statistics

We’ve been here before

1.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

3.1

0

20

40

60

80

100

120

140

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16

Job

s, M

illio

ns

WTI

($

/bb

l)

Source: Texas Workforce Commission, U.S. Energy Information Administration

Oil Prices and Houston Employment

Monthly Oil Prices Employment

We’ve been here before

1.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

3.1

0

20

40

60

80

100

120

140

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16

Job

s, M

illio

ns

WTI

($

/bb

l)

Source: Texas Workforce Commission, U.S. Energy Information Administration

Oil Prices and Houston Employment

Monthly Oil Prices Employment

We’ve been here before

’90 Population3.7 Million

’00 Population4.7 Million

’10 Population5.9 Million

’15 Population6.6 million

2

3

4

5

6

7

8

0

20

40

60

80

100

120

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Crude$/Barrel

Population Millions

Source: U.S. Census Bureau

Oil Price* Population

* West Texas Intermediate, Average Annual Spot Price

We’ve been here before

98.4

-8.1

18.7

44.353.4 54.4 53.0

10.6

92.8

17.8

59.7

1.3

-1.7-11.6

39.3

91.1

107.0

90.7

-110.6

49.7

82.9

118.5

89.9

104.7

15.221.9*

December to December Job Growth (000s)

Source: Texas Workforce Commission *Partnership 2016 Forecast

Historic Employment Change

Other Drivers of Houston’s economy

Other Drivers of Houston’s economy

27

Magnet for Foreign Investment

Other Drivers of Houston’s economy

106,000 employees

56 institutions

7.2 million patient visits

The World’s Largest Medical Center

Other Drivers of Houston’s economy

$196.4 Billion =

Value of Exports +

Imports in ’15

A Major Trade Gateway

New metro export plan

Metro Houston Population Forecast

6.656

2014 - U.S. CensusBureau

TX State DataCenter-Slow Growth

Houston GalvestonArea Council

Ray Perryman Woods & Poole TX State DataCenter-Fast Growth

Millions of Residents in 2025

Metro Houston Population Forecast

6.656

7.464 7.712 7.765 7.8698.334

2014 - U.S. CensusBureau

TX State DataCenter-Slow Growth

Houston GalvestonArea Council

Ray Perryman Woods & Poole TX State DataCenter-Fast Growth

Millions of Residents in 2025

Gross Regional Product

$380.9

$504.1

$627.4

$753.9

$887.2

$1,002.1

$1,154.1

'10 '15 '20 '25 '30 '35 '40

* '09 Constant Dollars Source: The Perryman Group, 2015

Houston-Sugar Land-Baytown MSA 2010-2040($ Billions*)

Houston economic outlook

April 2016

Presented by:

Patrick Jankowski

Senior Vice President, Research

Greater Houston Partnership