Houston job market shows signs of a turnaround
Written by: Lydia DePillis
Between now and 2017, Houston will have 74,000 openings annually for middle-skill jobs, according to a study by the Greater Houston Partnership. But while Houston’s unemployment rate now tops the national average, Houstonians won’t necessarily fill the upcoming openings for drivers, mechanics and technicians in future months and years. Employers may have to import qualified employees from other parts of the nation and world, despite the fact that every year hundreds of students graduate from area high schools and sink into the grind of minimum-wage poverty.
Employment in grew slightly in Greater Houston over the past year as moderating job losses in oil and gas were offset by gains in services such as health care, hotels and restaurants, the Labor Department reported.
Overall, the metropolitan area gained 13,300 jobs over the 12 month period that ended in July, an annual growth of 0.4 percent — am improvement from June’s 0.2 percent and better than analysts expected. Drilling activity has increased modestly in Texas, following a rebound in oil prices, and many oil company executives have suggested that the worst is over after reporting abysmal earnings in the quarter that ended in June.
“It appears that the hemorrhaging is slowing, and we may be on a path to an even keel,” said Parker Harvey, an economist at Gulf Coast Workforce Solutions, a regional workforce development agency.
The two-year oil bust has still battered the local economy, with the July unemployment rate rising to nearly point from a year ago, to 5.8 percent from 5 percent Job growth is also lagging the state and nation. In Texas, jobs grew 1.5 percent while national employment grew 1.7 percent in the 12-months ending in July, according to the Labor Department.
Analysts noted other hints of improvement in the Houston area. Professional and business services, which has shed 2.3 percent of jobs over the year, experienced noticeable gains in July. That included a increase gain in architectural and engineering jobs, which can foreshadow gains in construction and population growth.
Other sectors, however, are showing signs of softening. Health care has driven Houston’s employment growth through the oil and gas downturn, but it was a source of concern in the latest purchasing manager’s index, a comprehensive measure of business activity. An unusual number of job losses in July came from ambulatory care centers, the outpatient clinics that mushroomed everywhere around Houston.
A spokesman for Harris Health System, the public entity that operates 43 such clinics, said the area has seen a tremendous expansion in such facilities as health policy moves towards primary care rather than expensive hospital-based procedures.
After a new pediatric clinic opened in June, the boom might be over. “We’ve been adding for the most part,” said spokesman John Martinez. “We’re set right now for a while.”
Overall, health care added 12,000 jobs over the year.
Despite the relatively positive jobs numbers in July, analysts are hesitant to call it a recovery until the same thing happens for several months in a row. Other indicators, such as home sales and auto sales, also turned down sharply this month.
“It’s not like a hard bottom, like a basketball court. It’s more like a squishy bottom, like you find out in Katy after 3 days of rain,” said Patrick Jankowski, an economist at the Greater Houston Partnership, an economic development group. Andy real bounce back, he emphasized, will depend on whether oil prices continue to rise. Oil settled about $48 a barrel in New York after a strong week of gains.
Statewide, Texas managed a seasonally adjusted increase of 23,600 jobs last month. The unemployment rate ticked up to 4.6 percent – still below the national rate of 4.9 percent in July. The numbers parallel national unemployment statistics for July, which showed healthy growth in the labor force, a sign that more people are looking for jobs.
Over the past year, Texas added 173,000 jobs, substantially below Texas’ five-year average of 301,100 positions.
The service sector drove increases, adding 235,000 jobs over the year, while goods-producing industries dropped 62,000 jobs — their fifteenth consecutive annual decrease. Construction employment stopped its slide, adding 7,800 jobs in July, after two negative months.
Robert Dye, chief economist for Comerica Bank, says his outlook for the state has gotten more optimistic in recent months.
“It’s still a weak forecast over the next year, but it’s less weak,” he said.
Written by: Lydia DePillis