houston h town day 2010
TRANSCRIPT
H-Town Day 2010Understanding Houston’s Past, Present & Future
Houston Association of REALTORS® Thursday, October 21, 2010
Daniel G. Bellow, CRE, SIOR, CCIM
President-Houston
Jones Lang LaSalle Americas
Houston MSA
10,062 sq. mi.
New Jersey = 8,722 Sq. Mi.
New Hampshire = 9,351 Sq. Mi.
Vermont = 9,615 Sq. Mi.
If Houston were a state,
it would be larger than…
2
Minnesota = 5,266,214
Houston MSA
Population = 5,867,489
Wisconsin = 5,654,774
Maryland = 5,699,478
If Houston were a state,
it would be more populous than…
3
Arizona = 2,382,300
Colorado = 2,206,100
Houston MSA
2,508,000 jobs
Maryland = 2,492,100
If Houston were a state,
it would have more jobs than…
4
If Houston were a state,
it would rank…
5
• 44th in land mass
• 19th in population
• 20th in jobs
If it were a sovereign nation, Houston would
have the world’s 23rd largest economy
Houston MSA
GRP = $325.5 billion
Belgium = $390.5 billion
Malaysia = $386.6 billion
Venezuela = $357.9 billion
Houston MSA
GDP = $403.2 billion
…its GDP would be larger than…
6
Aerospace Health Care/Biotechnology Electronics and Technology International Business Engineering Chemicals Energy Logistics Corporate Headquarters
Houston-Area Industry Mix
7
• Home to NASA’s Johnson Space Center
• 18,000+ employees (3,300 civil, 15,000 contract)
• Major contractors: Boeing, Lockheed, Raytheon
• $1.35 billion – Houston’s 2009 total trade in
aircraft, spacecraft and parts, up 53.2 percent
from 2008
Aerospace
8
• Texas Medical Center - the world’s largest
– 46.0 million gross sq ft physical space
– 93,500 employees
• 49 member institutions, including 13 hospitals
• 21 educational institutions, 71,500 students
• $7.1 billion capital investment through 2014
• 5.6 million patient visits annually
• More than 18,000 international patients
Health Care
9
• 250+ establishments
• Major employers include:
– HP, Benchmark, BMC, Foxconn, Texas Instruments
• Software development centers include: – Texas Medical Center, JSC, Rice, UH, Texas A&M
Electronics & Technology
10
• $167 billion in trade
• 3,000+ international companies
• 92 consulates
• 22 foreign banks
• 62 of the 100 largest foreign corporations
• Over one in five residents foreign-born
International Business
11
• 2,900 engineering, architectural and design firms– 25 of U.S. top 25 engineering and design firms
have Houston offices
– Operations in every region of the world
• 86,300 engineers, architects and technicians
Engineering
12
• 40.8% of the U.S. base petrochemical manufacturing capacity
• 400+ chemical plants
• 31,000+ employees (refining & chemicals)
• Comprehensive, developed infrastructure
Chemicals
13
• International center for every aspect of the oil and gas industry
• More than 3,700 establishments:– 30.6% of U.S. jobs in oil and gas extraction– 13.7% of U.S. jobs in oil field services– 13.5% of U.S. jobs in O&G and construction machinery manufacturing
Energy
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• 15th busiest in the world
• First in the U.S. in foreign tonnage
• Second in U.S. in total tonnage
• 220 million tons annually
• 7,700+ deep draft ships called at Houston
• Service between Houston and more than
1,000 world ports
Logistics – Port of Houston
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• One of nation’s busiest rail centers
– Burlington Northern Santa Fe
– Union Pacific
– Texas Mexican Railway
• 800 miles of mainline track
• 2,200 trains per week
• Typical commodities:
– chemicals, plastics, grain, forest products, coal, minerals and steel
Logistics – Rail
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• Passengers– 8th busiest in U.S.– 48.5 million in ’09
• Air cargo– 11th busiest int’l hub– 336.8 million metric import tons
in ’09
• 11 international carriers– 67 destinations
• 10 domestic carriers– 110 domestic destinations
Logistics – Bush IAH
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Rea
l GD
P
Time
July ‘08
March ‘09
We’re somewhere
here.
18
Houston Business Cycle
Where Houston lost jobs
Houston jobs lost from the month of peak employment to the month of employment trough.
19
Houston jobs recovered so far
Shaded part indicates Houston jobs gained in recovery so far.
20
Nationwide
Jobs Lost This Recession . . . . . . . . . . . . . . . . . . . . . . . 8.4 million Job Losses Began . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan ‘08Duration of Job Losses . . . . . . . . . . . . . . . . . . . . . . . . . 24 monthsPercent Jobs lost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1%
A back of envelope calculation
The Recession…
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Nationwide
Jobs Lost This Recession . . . . . . . . . . . . . . . . . . . . . . . 8.4 million Job Losses Began . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan ‘08Duration of Job Losses . . . . . . . . . . . . . . . . . . . . . . . . . 24 monthsPercent Jobs lost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1%
Houston
Jobs Lost This Recession. . . . . . . . . . . . . . . . . . . . . . . . . .115,900Job Losses Began . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sep ‘08Duration of Job Losses . . . . . . . . . . . . . . . . . . . . . . . . . 17 monthsPercent Jobs lost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4%
A back of envelope calculation
The Recession…
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Houston Purchasing Managers Index
30
35
40
45
50
55
60
65
70
1/05 1/06 1/07 1/08 1/09 1/10
Source: National Association of Purchasing Management - Houston, Inc.
Ne
utr
al =
50
March `0939.0
Sep`1053.6
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North American Rig Count
500
700
900
1,100
1,300
1,500
1,700
1,900
2,100
2,300
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
Source: Baker Hughes
June `09895
Sep`101,655
24
HAS Passengers (12-month total, millions)
40
42
44
46
48
50
52
54
1/05 1/06 1/07 1/08 1/09 1/10
Source: Houston Airport System
August `0947.6 M
Aug`1049.0 M
25
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
1/05 1/06 1/07 1/08 1/09 1/10 1/11
Source: Houston Association of Realtors
August `0951,667
Sept `1053,399
Single-Family Home Sales (12-month total)
26
Motor Vehicle Sales (12-month total, thousands)
180
230
280
330
380
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Source: InfoNation, Inc.
December `09218,700
Aug `10235,504
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Payroll Employment (thousands, seasonally unadjusted)
GREATER HOUSTON PARTNERSHIPHouston.org
Source: Texas Workforce Commission
Jan `102.479 M
Aug `102.511 M
49,000 private sector jobs added since Jan ‘10
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What does the future look like for Houston?
• Not like ’07 – ’08
•More like ‘05 – ’06
What will the recovery look like?
What does the future look like for Houston?
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• ’07 – ’08 was not “the norm”
– $145 barrel oil
• Price more than doubling in 12 months
– 100,000 jobs per year
• Almost double historical pace
– $240 billion in foreign trade
• Up nearly 50 percent from three years earlier
– 50,000 single family starts
• Up nearly 50 percent from three years earlier
What will the recovery look like?
What does the future look like for Houston?
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• ‘05 and ’06 are more like the “norm”
• You can expect . . .
– $75 – $85 barrel oil
• Slightly above historic trend
– 50,000 – 60,000 jobs per year
• Significantly fewer jobs created in ’10
• Job growth returning in ’11
What does the future look like for Houston?
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• ‘05 and ’06 are more like the “norm”
– $180 - $190 billion in foreign trade
• Growth returns as the economy rebounds
• No distortion from inflated commodity prices
– 20,000 – 25,000 single family starts
• Tighter lending standards = fewer new homes
What does the future look like for Houston?
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294.4
294.4
384.1
466.0
556.6
656.1
'10 '15 '20 '25 '30 '35
Houston-Sugar Land-Baytown MSA 2010-2035
$ Billions*
* 2000 Constant Dollars
Source: The Perryman Group, Spring/Summer 2010
Gross Regional Product
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5.3
5.9
6.5
7.2
7.9
8.6
2.42.6
3.0 3.33.5
3.8
'10 '15 '20 '25 '30 '35
Houston-Sugar Land-Baytown MSA 2010-2035(Millions)
Population Employment
Source: The Perryman Group, Spring/Summer 2010
Population & Employment
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Ratings of the Houston Area
As a Place to Live (1996-2010)
Source: Stephen L. Klineberg / Rice University
Belief in the “American Work Ethic”
(1982-2010)
Source: Stephen L. Klineberg / Rice University
“#3 Cities with the Strongest Economies”
Brookings Institution - June 2009
“Top 10 Cities to Find a Job”
U.S. News & World Report - August 2009
“World Capitals of the Future”Forbes.com - September 2009
“#7 World’s Smartest Cities”Forbes.com - December 2009
Houston Region Rankings
“#3 Best Housing Markets”
Forbes.com - February 2010
“Largest Population Gain”
U.S. Census Bureau - March 2010
“#4 Cities Where the Recession is Easing”Forbes.com - March 2010
“#3 Best Cities for Job Growth”New Geography and Forbes: Large Cities Ranking
2010 Best Cities for Jobs - April 2010
Houston Region Rankings
“Top Destination City”
U-Haul International - April 2010
“Home to 25 Fortune 500 Headquarters”
Fortune - April 2010
“Top U.S. Manufacturing Cities”Manufacturers’ News Inc. - May 21, 2010
“Best Cities for Young Professionals”Forbes.com - June 17, 2010
Houston Region Rankings
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H-Town Day 2010Understanding Houston’s Past, Present & Future
Houston Association of REALTORS® Thursday, October 21, 2010
Daniel G. Bellow, CRE, SIOR, CCIM
President-Houston
Jones Lang LaSalle Americas