It’s been nearly 25 years since the Oilers skipped town, but the nickname is still plenty applicable to the city where they first played football.
The oil and gas industry is deeply rooted in Houston, and more than 200 business leaders from the area were reminded of that last week at the Sheraton Houston Brookhollow Hotel. That’s where the Greater Heights Area Chamber of Commerce hosted its annual Economic Forecast Luncheon featuring Houston economy expert Bill Gilmer, whose presentation centered around the oil industry and its impact on the local economy.
“We’ve had Dr. Gilmer here for several years, and it seems like it always revolves around oil,” said attendee Scott Lester, the market president for Allegiance Bank. “That’s what we are here in Houston, Texas. We’re still an oil town. And as oil goes, so does Houston go.”
According to Gilmer, an economics professor at the University of Houston’s Bauer School of Business and the director of the Institute for Regional Forecasting, oil-related jobs have declined as U.S. oil production has slowed and the fracking industry has lost the backing of Wall Street investors. Gilmer said a credit crunch also contributed to slowed oilfield activity in 2019.
Gilmer said total investment in the U.S. oil industry last year was down 52 percent compared to 2014 and down 27.6 percent from 2018.
Still, Gilmer said the oil industry recently started to stabilize and could see moderate growth this year. He said the expansion of chemical projects was key to helping Houston offset the drilling bust.
“From what I saw and from everything that Dr. Gilmer talked about it, I think for the next two years we’re going to stay pretty flat-lined,” said Louis Gill, the new president of the Heights chamber of commerce. “I didn’t see anything that he said that was going to put us into a recession.”
Gilmer cautioned, though, that a recession could strike quickly, even within the span of two quarters. So that’s something to watch out for in the Houston area.
David Schein, the associate dean and director of graduate programs at Cameron School of Business at the University of St. Thomas, said the school could face challenges in 2021 in terms of helping graduating students land jobs and internships.
“I think more likely than not, we probably won’t have a recession this year,” Schein said. “Regardless of who’s the (U.S. president after November’s election), we’ll probably be looking at at least a dip if not a recession in 2021.”
In the more immediate future, though, Gilmer said prospects for the local economy are fair. He said Houston’s unemployment rate now roughly matches that of the national unemployment rate of 3.5 percent, the lowest rate in decades.
Lester and Eric Hancock, a real estate analyst for Lane Property Tax Advocates, both said they are encouraged by the city’s economic outlook for 2020.
“My takeaway is while there’s potentially some slowness in the economy, overall I think it’s going to be on the upside,” Hancock said. “I go to various other events like this with economists, and everyone seems to have a different point of view on it. But overall, from what I’ve seen, I think we’re going to see a positive year ahead of us.”