Harvey, oil slump recovery boost job growth

Area added about 45,000 jobs in ’17, largely driven by upswing in energy

Houston in 2017 had the best job growth in three years, a sign not of how good things are but of how crushing the twoyear oil downturn was for the region’s employment growth.

The metropolitan area’s economy added about 45,000 jobs last year, nearly triple the 16,000 gained in 2016 and a solid rebound from 2015, when the region lost about 800 jobs, the Texas Workforce Commission reported Friday.

But even with that improvement, the gains of 2017 were only a fraction of those of 2014, when the region added 117,000 jobs, and were well below the 60,000 jobs a year Houston historically averages.

“The recovery is uneven, but things are looking up,” said Parker Harvey, principal economist with Gulf Coast Workforce Solutions, a regional workforce development agency.

The brightening outlook is largely driven by the rebound of the region’s oil and gas industry. The widespread layoffs have largely ended.

Employment in the mining and logging sector, which is dominated by Houston’s oil and gas companies, ended the year essentially flat after two years of substantial job losses, according to state data.

Manufacturing, which is closely tied to the energy industry, gained nearly 9,000 jobs in Houston last year.

The metropolitan area’s unemployment rate ended the year at 4.3 percent, down from 5.3 percent at the end of 2016.

The improvement follows rising oil prices, which have climbed from their recent low of $26 a barrel in early 2016 to more than $60 a barrel.

If oil prices remain around $60 a barrel, economists predict overall employment in Houston could increase by 70,000 jobs or more in 2018.

“Tell me the price of oil, and I can tell you where we’re going,” Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston, said recently.

Oil settled in New York on Friday at $63.37 a barrel, down 58 cents, but near three-year highs.

The state economy has also benefited from the oil industry’s recovery.

For Texas, 2017 also featured the strongest employment growth in three years.

The state added more than 300,000 jobs, according to the workforce commission, a healthy growth rate of 2.5 percent, compared to 1.4 nationally.

The state unemployment rate ticked up last month to 3.9 percent from November’s record low of 3.8 percent.

Job growth had accelerated in recent months, buoyed not only by rising oil prices, but also by a strong national economy and rebound from Hurricane Harvey as billions of dollars in insurance claims and disaster aid began coming into the state and region.

That strong growth, however, paused in December.

Texas added only 400 jobs in that month, after gaining nearly 54,000 in November and more than 67,000 in October, according to the workforce commission.

The Houston area lost about 500 jobs in December after gaining about 16,000 in November and 20,000 in October.

Over the year, Houston’s job gains were led by professional and business services, which added about 15,000 jobs; education and health services, which gained about 9,000; and manufacturing.

Construction, which has struggled in recent years as the commercial real estate market sputtered, received a boost from the rebuilding that has followed Hurricane Harvey, economists said.

The sector lost 800 jobs in 2017 but performed better than in previous years.

“Construction has been in decline for the last three years, but it staged a good rebound, all driven by Hurricane Harvey,” said Harvey, the economist. “The question is whether this is sustainable.”