GHP has optimistic view for local economy in 2023
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Patrick Jankowski, chief economist at the GHP, at the economic outlook event. Photo: Richard Carson/courtesy of the GHP
Even if a nationwide recession happens — which economists agree seems likely — Houston is still expected to gain jobs and the local economy will still come out strong, according to the Greater Houston Partnership forecast.
Driving the news: Patrick Jankowski, chief economist at the GHP, said at the economic outlook event Thursday there are three possible outcomes for the economy next year:
- 50% chance that Houston faces a short and shallow recession.
- 30% chance that Houston mostly misses it.
- 20% chance that the recession is longer than expected.
The big picture: The GHP estimates that even with a recession, Houston will see a net gain of 30,000 to 80,000 jobs next year.
- Yes, but: While some industries will be better off than others, there will likely still be some job losses, according to the GHP.
State of play: While inflation is high and interest rates are rising, many of Houston's sectors — like construction, health care, energy and professional services — have grown and are predicted to continue to expand, according to the GHP.
- Houston regained all of the jobs lost in the pandemic and has created an additional 130,000 jobs — more than cities like San Francisco and New York City.
- Port Houston has seen a record high of container traffic, signifying Houston is growing as a global port.
Plus: 86% of business leaders across the country plan to maintain or increase their capital budgets and 44% plan to continue hiring during the downturn, according to a Conference Board survey.
- When big company leaders lose confidence, it can make a recession inevitable as they cut jobs and capital spending. That doesn't appear to be happening, yet.
- "While business leaders are anticipating a recession, they aren't letting it derail their plans," Jankowski said.
Zoom out: While many sectors across the country have conducted layoffs, Houston has not seen mass layoffs thus far.
- Meta announced layoffs for more than 11,000 employees, and more than 200 of the employees were in the Austin, per KXAN.
- PepsiCo plans to lay off hundreds of people in its corporate offices, including at the Plano location, per the Wall Street Journal.
The bottom line: It's unknown how drastic of an impact the likely potential recession will have, but the city is in a good position to weather any storm.
- "Whatever happens next year, I still think Houston is gonna do very well next year, especially compared to other metros, but even if we do have some problems next year, it's not permanent," Jankowski said. "We just need to get through 2023."