On Bauer Business Focus — A conversation on what’s next for Houston after the cool-down of upstream oil with Houston Public Media News 88.7 Business Reporter Andrew Schneider.
Bill Gilmer, director of the Institute for Regional Forecasting (IRF) at the C. T. Bauer College of Business at the University of Houston, is speaking at the May 22 IRF Spring Symposium about what will drive the Houston economy while upstream oil is cooling down. Gilmer stopped by Bauer Business Focus recently to give a preview of the talk.
The price of natural gas collapsed in late 2011 and shortly after the rig count fell approximately 15 percent, Gilmer said. The growth of upstream employment also began to stall.
“We were too good at producing natural gas, it turns out, and with fairly weak domestic demand,” Gilmer said. “We found that there was a surplus of gas, and the tipping point is about $4.50. At that price, we saw about 600 rigs pulled away from natural gas directed drilling.”
Houston experienced employment growth at four percent annually as recently as 2012. The percentage rate has slowed down, but the growth rate is still looking up. In 2012 it meant about 115,000 jobs and Houston slowed down last year to approximately 76,000 new jobs, well above the long-term trend for Houston, Gilmer said.
“We’re doing well. I think the outlook for Houston, barring the unforeseen, we’re still talking about an excellent year 18 months ahead of us for the Houston economy,” Gilmer added.
Click here to hear the full interview.