The following article originally appeared in the January newsletter to clients of Kiley Advisors, now a part of FMI Corporation, for the purpose of providing the latest leading indicators and industry issues to those clients. Reprinted with permission.
“[2017] isn’t likely to be a banner year for the region’s economy, but it should be a further step on the road back to robust growth.” Those were the sentiments of Patrick Jankowski, Senior Vice President of Research at the Greater Houston Partnership, after unveiling his Houston employment forecast of 29,700 for 2017.
For construction, however, there is still more pain to be had. Digging into Jankowski’s numbers, construction is predicted to lose 16,000 jobs in 2017, largely due to the expected slowdown in the heavy industrial work. City of Houston permits also continue to track down in total dollar volume from a year ago, and are more heavily weighted to renovations and additions rather than new construction. Driving this, in part, are landlords who feel they need to compete to keep their tenants given the high amount of office space currently available in the market. The argument could also be made that after the flurry of office construction in recent years, there is a supply of readily available space for those companies looking to upgrade – rather than building from the ground up. With the construction market lagging the overall Houston economy by roughly 18 months, we can expect the emergence of a rebound for us in 2018.
