Skip to main content

Economic Update: The Keys to Recovery

Published Oct 27, 2020 by A.J. Mistretta

Texas Medical Center in Houston

A new surge of COVID-19 cases threatens to slow the economic recovery nationwide and here in Houston. But recent indicators show increased consumer and business confidence nearly eight months into the pandemic. 

Partnership Senior Vice President of Research Patrick Jankowski provided insight into areas such as jobs, consumer sentiment and GDP in this latest economic update on October 25.

Here are a few takeaways:

  • Worldwide, countries have reported nearly 43 million cases of COVID-19 and approximately 1.1 million deaths. Here in the U.S., approximately 8.7 million cases have been reported with 225,000 deaths. Cases globally and here in the U.S. are once again trending upward. 
  • Jankowski said despite the new surge in cases, we’re unlikely to see a fresh round of restrictive lockdowns. The political will simply isn’t there right now to take steps that would further damage state and local economies, he said, adding that individuals and businesses are more willing to take corrective action to stave off lockdowns than they were six months ago. 
  • New anecdotal data from a workplace access and security company suggests that, nationwide, only about 30% of employees have returned full-time to office settings. 
  • Jankowski said business confidence is picking back up. Data shows that a growing number of companies are willing to hire or make investments. Another metric, the CFO Optimism Index, shows corporate finance chiefs nationwide are more optimistic than they were two or three months ago. 
  • The most recent survey from the National Association for Business Economics indicated that just 12% of survey participants expect their sales to fall in Q4, down from 67% who expected their Q2 sales to fall back in March. Most respondents said they anticipate sales will increase or remain the same this quarter. 
  • Of the 22 million jobs lost nationwide since the pandemic began, companies have added back 11.4 million jobs, bringing the deficit to 10.7 million. Jankowski said for the U.S. to continue to regain jobs, three things need to happen: a Congressional stimulus package, an effective vaccine and increased consumer confidence. 
  • U.S. continuing unemployment insurance claims are now around 23 million per week, down from a height of over 32 million earlier in the year. That’s still well above the average of 2 million pre-pandemic. 
  • Here in the Houston region, companies shed a total of 365,000 jobs since the beginning of the pandemic, adding back 148,000 jobs in recent months, or about 40% of those lost. The majority of the losses have been in sectors such as restaurants and hospitality, construction, professional services and manufacturing. 
  • Local construction starts are down $4.6 billion for the first nine months of this year compared with the same period in 2019. 
  • Container traffic at the port is picking back up. In fact, September traffic was above totals in September 2019. Airport traffic has increased a bit but remains about one-third of where it would normally be for this time of year. 
  • Roughly 181,000 vehicles have been sold in the area so far this year, down from 217,000 during the same period in 2019. 
  • Jankowski said he doesn’t expect Houston’s GDP will recover until the middle of 2021 at the earliest. It could take three to five years for local employment to fully recover. Unlike past post-recession recoveries where Houston has benefited from the energy industry, Jankowski said this time the region will instead rise and fall with the health of the national economy.  

Jankowski will give his annual Houston Region Economic Outlook presentation on December 8, including a sector-by-sector look at employment and overall industry health in the year ahead. 

See recent key economic indicators and data points

Related News

Aerospace & Aviation

Emerging Aerospace Trends and Technology Taking Flight in Houston

Houston's aerospace industry continues to flourish despite an economically challenging year. Amid key developments is the region's expanding commercial space sector.  To learn more about what's happening in Houston's aerospace industry, we asked Josh Davis to share his observations. Davis is the Partnership’s Senior Director for Global Aerospace & Aviation. A Certified Economic Developer (CEcD), Davis has used his acumen in aerospace to tout Houston’s strengths as a space juggernaut to a global audience. His expertise includes research, project development, site selection, economic development strategy and global engagement. What are some of the current trends you are seeing and how do you see the Houston region well positioned to lead?  The Houston region is positioned like no other metro globally. Aerospace is cross-pollinating with life science and Energy 2.0 in the region like nowhere else in the world. Specifically, the Houston region is home to a number of exciting companies doing new work in space, including: Axiom Space Intuitive Machines Ad Astra Rocket Boeing We're seeing companies that have traditionally associated with oil and gas shift into aerospace, including Jacobs and KBR. There's a realization that space is the future. Houston is home to many institutions in the region supporting the space ecosystem, such as NASA's Johnson Space Center, Rice Space Institute, the Houston Spaceport, Space Center Houston, Texas Medical Center, and San Jacinto College Edge Center. We've also seen increasing interest from our regional economic development allies around aerospace projects. There are more than 500 aerospace, space, and aviation firms and supporting institutions in the Houston region. We're also seeing growth in interest around venture capital as it supports space in the Houston region. Houston Exponential (HX) has engaged in this space in 2020, and VCs such as Houston-based SpaceFund have helped to ignite the conversation along with others in the region. This year, the Partnership supported The Ion in awarding a $1.4 million grant from the Minority Business Development Agency to create an Aerospace Innovation Hub (ASCI-Hub).  There's also an emergence of a new network of global cross-pollination brought to us by the space industry. Last year, the Partnership attended the Paris and Dubai air shows and helped bring a delegation from the UAE to the Houston Spaceport. As a global city with about 90 consulates, Houston's international nature is our greatest strength and catalyst within the aerospace, life science, and energy dynamic.  The COVID-19 pandemic has caused a serious disruption in economies across the globe. What kind of impact has it had on aerospace and aviation? Aerospace is currently a tale of two industries. One one hand, you have aerospace companies that exclusively support and supply commercial aviation. On the other, there are aerospace companies engaged in space and related arenas. The former has been hit with unprecedented challenges as COVID-19 had brought air travel to a near standstill in 2020. At one point, the Houston Airport System was down more than 90%. Mario Diaz, Aviation Director for the Houston Airport System, spoke about those challenges and how the region's airports have adapted at the Partnership's State of the Airports event in October.  The commercial space industry meanwhile is booming. Recent successes, including SpaceX’s Demo-2 and Crew-1, have captured the global imagination. Earlier this year, Axiom Space announced it was selected by NASA to build a privately funded platform that will attach to the International Space Station. The $2 billion project could create up to 1,000 jobs. The company expects to launch its first module as soon as 2024. Space companies have not only defied the gravity of COVID-19, but have also found new innovative solutions to combat the virus. The convergence of life science and space in Houston lends itself to this kind of novel solution finding.  Are there any promising new technologies or opportunities in the aerospace industry that you think will change space exploration and life on Earth? Every dollar spent on space has implications for making life better for all of us. We are finding there are many implications for life science in a zero gravity environment. During the Partnership’s Washington D.C. Fly-In earlier this year, we met with NASA Administrator Jim Bridenstine, a Rice University alumnus, who highlighted the potential to grow human retinas in space. For instance, the zero gravity environment allows for symmetrical structures to unfold -a feat not possible on earth. We will find there is no area of life science where space does not offer insights and new possibilities. All NASA astronauts and many from other space agencies train at NASA JSC. Houston is the human spaceflight capital of the world and we have the largest medical center in the world. This is a recipe for possibility this decade.  On the spaceflight side synergizing with energy, propulsion is the holy grail for the industry. Just one example in the Houston region is Ad Astra Rocket Company, which is working on advanced high-power electric propulsion. In the current space economy, there are two main kinds of rockets: the high-power chemical rockets (launchers) and the low-power electric ion engines. Ad Astra takes the best of both, with a high-power electric rocket engine which is the ideal propulsion solution for many different space missions and logistics/servicing operations.    Learn more about Houston's aerospace and aviation industries. Register for the Partnership's State of Space event for Dec. 15, 2020. 
Read More

Judge Hidalgo Discusses Growing COVID-19 Concerns, New Measures at State of the County Event

Harris County Judge Lina Hidalgo expressed concern about the rising number of COVID-19 cases in the region and discussed a number of measures the county has implemented to combat the virus’ impact on residents in her 2020 State of the County presentation.  Judge Hidalgo participated in a fireside chat on November 12 with Scott McClelland, President of H-E-B Food and Drug and the Greater Houston Partnership’s 2019 Board Chair. The Partnership hosted the Judge for her second State of the County event, which was held virtually.  “The impacts on our community from the coronavirus are enormous and they’re nowhere near over,” said Judge Hidalgo, citing a rising number of daily new cases as well as increased positivity rates and hospitalizations in the county.  The Judge called on state officials to institute a more stringent threshold-based system for triggering shutdowns if the situation does not improve. She said the economic impact of allowing the virus to spread unchecked would be far more damaging than temporary shutdowns. “When folks know that it’s safer out there, they’ll have the confidence to go out and engage in the activity that will help our economy to rebound.”  In recent months, the county has launched a $40 million recovery fund for struggling small businesses and a separate $40 million fund to provide rental assistance to tenants affected by the economic downturn.   Judge Hidalgo also discussed Harris County’s work to help close the digital divide, particularly for students who need devices and connectivity for remote learning. In the spring, the county invested about $30 million to ensure every child who needed a device could get one.  The Judge also touched on the county’s bail reform efforts and the positive data that has come out of that reform. Switching to infrastructure, Judge Hidalgo emphasized the importance of widening and deepening the Houston Ship Channel, which will enable the Port of Houston to host ever-larger vessels and effectively compete with other ports along the Gulf Coast.  Watch the full State of the County presentation via the link on this page. 
Read More

Related Events

Economic Development Event

UpSkill Works Forum: America's Indispensable Institutions

With strong programs in career-focused education and training, community colleges are critical to the promise of equal opportunity. A new report by Opportunity America…

Learn More
Learn More
Executive Partners