Steps taken to contain the virus tipped the economy into recession. Consumer spending in metro Houston fell 35.8 percent in April ’20 compared to January of that year, according to Harvard University’s Economic Tracker. Thousands of businesses shut their doors, many permanently. And one in every nine Houstonians lost their jobs. If not for the federal government’s Paycheck Protection Program, many more would have been laid off. 

A recovery began as elected officials eased restrictions on how businesses could operate and the massive fiscal stimulus packages that Congress passed began to work their way through the system. The recovery accelerated when vaccines became widely available. All but a handful of sectors have now fully recouped their job losses. In many industries, activity today is well above pre-pandemic levels. 

Calm Before the Storm

The U.S. enjoyed one of the longest economic expansions on record leading up to the pandemic. February ’20 marked the 113 consecutive month of job growth. Adjusted for inflation, gross domestic product had grown 27.0 percent since the end of the Great Recession. And the nation’s unemployment rate had slipped to 3.5 percent, the lowest of the past 50 years.

After suffering through the Fracking Bust and Hurricane Harvey, Houston was also growing again, albeit at a slower pace than earlier in the decade. In the 12 months ending January ’20, the region had added 62,500 jobs, marginally below the historic average of 65,000 per year.

Early Timeline

The pandemic arrived in Houston on March 4 when a Fort Bend County resident was the first person to test positive for COVID-19 in Texas. Events quickly unfolded:

March 11: After eight days of operation, the remainder of the ’20 Houston Livestock Show and Rodeo was canceled. 

March 12: Houston-area school districts began to close and prepared to offer classes remotely.

March 16: The Houston Health Department ordered all bars and nightclubs to close and for restaurants to halt on-site dining services.

March 19: Following a national emergency declaration, Governor Abbott issued Executive Order No. GA-08, restricting social gatherings as well as the visitation of certain businesses.

March 24: Harris County issues a stay-at-home order and all non-essential businesses are temporarily closed.

Sudden Impact

The mandated closures devastated Houston’s economy. The region shed over 360,000 jobs in two months. The unemployment rate soared to 13.3 percent. At the start of the pandemic, initial claims for unemployment benefits averaged 58,000 per week, up from an average of 3,800 per week in the two months before. The region sank into the deepest economic slump in recent memory.

The Houston Purchasing Managers Index reflects the depths of the downturn. It fell to 34.6 in April, the lowest reading on record. Readings above 50 indicate the economy is expanding, below 50 that its contracting. During the Global Financial Crisis, the Houston PMI bottomed out at 39.0. The Fracking Bust saw a low of 43.3. The economy didn’t show signs of improvement until August ’20, when the index once again crossed the 50.0 threshold.

Early in the pandemic, the Partnership reached out to its small- and medium-sized members to assess their well-being. Major findings in the April ’20 survey:

• 93.8 percent of respondents had instituted work-from-home practices,
• 53.6 percent indicated their revenues had declined,
• 47.1 percent had enacted a hiring freeze,
• 41.0 percent classified their operations as severely impacted, 34.5 percent as moderately impacted, and
• 24.6 percent had closed whole or partial operations.

Other data points to illustrate the impact of the pandemic:

• Houston TranStar monitored traffic volumes at 15 major intersections as a proxy for the decline in overall travel. In late April, traffic volume at those intersections was down 42 percent from pre-Covid levels.
• City of Houston mixed beverage receipts, a metric for alcohol sales in bars and restaurants, fell from $107.2 million in February to less than $13,000 in April.
• Calls to United Way’s 211 number seeking emergency assistance with rent, food, and utilities jumped 159 percent between early February and late April.
• In February, 18 percent of all Houstonians stayed close to home (i.e., within one mile). In April, the average climbed to 35 percent. For a few days that month, it topped 50 percent. The data is based on cell phone locations tracked by Cubeiq.

To continue reading, download this report.

Note: The geographic area referred to in this publication as “Houston,” "Houston Area” and “Metro Houston” is the ten-county Census designated metropolitan statistical area of Houston-Pasadena-The Woodlands-Sugar Land, TX. The ten counties are: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto, and Waller.