West Houston coping with oil downturn
Local business group studying economic impact on Energy Corridor, Katy areas
In the past year, West Houston’s Energy Corridor entered one of its darker financial times as it coped with the oil crisis, and economic experts predict stormier days before relief comes.
But while the corridor has taken an economic hit, other business sectors in West Houston and the Katy area have hung on steadily, according to representatives from the Houston West Chamber of Commerce.
However, if the oil crisis lingers, as those experts say it will, industries such as housing could begin to feel the effect. To measure the economic pulse of the area, the chamber will soon survey West Houston business owners as it and the University of Houston prepare for their third annual joint economic summit in February.
“We started to look three years ago into what kind of area West Houston was in terms of quality of employment and other economic factors, but this is the first year we will be doing a survey,” said Dick Helmey, who chairs the chamber’s fundraising efforts for the summit. “The survey will ask (area business owners) questions like: ‘How many employees have you hired in the past year? Do
you plan on downsizing?’ These are important to ask to provide perspective on how they feel going into the next year after what’s happened this year.”
The survey will list 20 multiple-choice questions and be distributed before Thanksgiving to the 850 chamber members and other selected area business owners, according to Helmey.
The results be presented at the summit along with other West Houston economic data such as growth of office space. Specific study
Helmey said his group is the only one of 85 business chambers in the Houston metro area to conduct such a survey and a specific economic study for the Houston region.
Besides energy companies, many of chamber’s 800-plus members represent West Houston business sectors such as health care, services, retail, housing and administration. The chamber is one of the largest in the Houston region, and 14 percent of its members come from Katy. Its western boundary for business representation extends to near Barker Cypress Road.
The chamber’s survey and summit are happening after a year where 10,000 jobs were lost in the Houston area, many of those belonging to whitecollar oil-industry workers in the west Houston region, Helmey said.
The 2015 West Houston economic study presented at the summit in February predicted the downturn and its effects. East and West
Robert Gilmer, director of the Institute for Regional Forecasting at the University of Houston and leader of the study, said in the presentation that while the economy on Houston’s west side would suffer through its ties of upstream oil developments, the economy on the east side of town would pick up.
He correctly predicted the sharp decline of natural gas prices would lead to construction of more petrochemical and natural gas liquefaction plants on the east side. Cancellations of manufacturing capacity by westside upstream drillers was accompanied by the plant projects east of Interstate 59. As a result, Gilmer said, the region’s housing market picked up — apartment rates rose by 8 percent — while the west’s stayed even or dipped and office spaces in that area didn’t grow.
Gilmer said he is two months away from diving into his 2016 economic predictions for the west, but he doesn’t see much changing soon.
“It’s going to be another slow year since west Houston is ground zero for the economy because of the oil crisis,” Gilmer said. “The other sectors in the area are doing fine, but the oil crisis will eventually affect those economies like real estate more. At the same time, we believe this is all temporary. Oil barrels will not continue to stay at $45 a barrel. But for 2016, it’s going to be much of the same.”
Gilmer and chamber members expect to find optimism in the survey results. Although West Houston is strongly identitified with the energy business, its economy also relies heavily on many other segments, chamber president Jeanie Bollinger said. A vibrant area
Despite the oil crisis, Bollinger said her chamber grew by 20 percent in the previous year.
“When you have a bit of an economic downturn, it makes business owners want to market themselves more and network more; so we have actually experienced growth,” Bollinger said. “West Houston is still a vibrant area; many companies here are still thriving. Both Gilmer’s 2016 study and survey results will show that, too.”