Bauer Institute for Regional Forecasting Director Bill Gilmer Shares 2016 Predictions During Spring Symposium
The Institute for Regional Forecasting at the C. T. Bauer College of Business held its Spring Symposium on May 17, with director and noted economist Robert W. “Bill” Gilmer providing his insight on economic prospects for Houston in the coming year.
The symposium — titled “Houston’s Economy Absorbs the Big Blow from Oil in 2015: Who Shares the Pain in 2016?” — addressed the important drivers of local growth and how they’ll come together in the next year to determine the city’s job growth.
“Our recovery is going to start from a deeper spot, and further in the future than predicted,” Gilmer said. “We have plenty of stimuli in Houston, but they are working against each other.”
He posed three scenarios for recovery in oil by asking five questions — When will oil prices hit bottom? When will the rig count turn up? When do energy jobs begin to come back? How high will the rig count go in this recovery? How long before the rig count reaches these highs?
“When we’re able to answer those questions, we’ll be able to better predict when our recovery will happen,” Gilmer added. “The last quarter was brutal for U.S. oil with drilling falling to record lows week after week.”
Although the outlook is grim for the next year, Gilmer noted that the current situation doesn’t compare to the oil bust of the 1980s.
“Under the worst circumstances, this isn’t ’82,” he said. “It was half the size of what it is today. We would have to lose 450,000 jobs to be comparable. We’re not even close.”
Overall, Houston will likely see another slow recovery year, but once oil hits a minimum of $60 a barrel, growth will happen, Gilmer said.
Gilmer will share his next set of projections at the Bauer Institute for Regional Forecasting’s Fall Symposium on Nov. 10 at the Hyatt Regency Hotel downtown. For more information on the IRF and Gilmer’s presentation, click here.
By Amanda Sebesta