Skip to main content

Houston Economy to Face Major Job Losses, Recession from Coronavirus and Oil Plunge

Published Apr 01, 2020 by Kelsey Seeker

Houston is likely to see significant job losses and a prolonged drain on its economy from the COVID-19 coronavirus.  

That was one of the major takeaways from a virtual presentation by Patrick Jankowski, Partnership Senior Vice President of Research, on March 31. Jankowski discussed his latest analysis of COVID-19, collapsing oil prices, the imminent U.S. recession, and their impact on Houston’s economy. 

Jankowski stressed that because of the unprecedented and ongoing nature of the situation, predicting the economic impact is difficult at this time. “With the situation changing daily, we can’t really get a good read on what’s actually going on yet,” he said. 

Jankowski referenced the next Bureau of Labor Statistics’ jobs report, which will be based on the number of employees on payroll during the second week of March and won’t include the waves of layoffs that happened during the third and fourth weeks of March. It won’t be until the April report is released in early May when we will see the real impact on the job market.

Pandemic will determine recession’s length and severity 

“We are coming off a period of 113 consecutive months of job growth, the longest expansion in US history and a phenomenal jobs report,” Jankowski said. “Last week we saw 3.3 million claims for unemployment benefits, and I believe that number will only rise as more people are laid off, the system becomes less overloaded and people figure out how to apply for benefits.” 

Given the single week of job losses based on the initial claims for unemployment insurance in Texas and Houston’s share of Texas’ jobs, Jankowski estimates mid-March losses in the region will be around 37,945 jobs. 

Jankowski noted that measures to combat the coronavirus are also combating the economy. He referenced the U.S. GDP forecasts from major financial institutions that estimate a decline in GDP for the first quarter of the year that continues through the rest of the year.  

“From my perspective - yes, we are in a recession and the situation will worsen in Q2,” Jankowski said. “We hope to have some growth in Q3, but we will end of the year worse off than at the beginning.” 

Add that to the drop in oil prices and the Texas Railroad Commission being asked to regulate crude oil production for this first time since the 1970s, Jankowski believes the crude collapse will only add to Houston’s misery. 

Small businesses and other industries hurt the worst 

Jankowski mentioned the Partnership’s survey of its small business members and found that 29% were unable to deliver goods or services, 59% are operating below half capacity and the most concerning, that 41% can survive only 1 to 4 weeks. 

He also highlighted industry sectors that are most at risk during this initial period and the 777,000 jobs tied to those sectors. The sectors include those impacted by social distancing (like retail), those whose services can’t be delivered remotely (such as plumbers and other home services), those that aren’t considered essential (such as the arts), and most small businesses (that tend to operate on thin margins).  

“If this virus continues after May, every job is at risk, every sector is at risk,” Jankowski stressed.  “And even if you are working from home and able to provide services to some degree, you may be affected. We will see additional layoffs to what we’ve already experienced.” 

Houston predicted to lose at least 150,000 jobs 

There are two ways to predict how Houston will fare – looking at models based on assumption or based on history.  

The Institute for Regional Forecasting shows 18 different scenarios of how the virus and oil prices will play out, with the most likely scenario from their prediction showing Houston down by 44,000 jobs. On the other hand, The Perryman Group’s model is forecasting 256,000 jobs lost.  

“These are two very different forecasts and you’re really seeing that uncertainty play out in these models,” Jankowski said.  

By referencing the history of recessions Houston has experienced, Jankowski estimates Houston’s jobs loss will hover between 150,000 jobs and 350,000 jobs.  

“Given how Houston fairs when oil is faring badly and then when the US economy not doing well, we are likely to look like between 2008-09 recession and oil bust we had in the 1980s,” Jankowski said.  

With a job loss of 13.2% from 1982, that amounts to about 417,450 jobs today. Using the Great Recession benchmark of 4.5%, that loss is closer to 142,325 jobs. 

Collapsing oil prices on par with 1982 energy bust 

With the tensions between Saudi Arabia and Russia spilling onto the world stage and affecting the price of crude, Houston has already felt the effects.  

On March 30 of this year, the price of oil closed at $21.07 a barrel. During that same month in 1982, the price was $10.25 but adjusted for inflation, it closed at $24.37 a barrel.  

“We can expect crude to slowly climb back into the low $30s by mid-summer without a Russia-Saudi deal,” Jankowski said. “We’ll see any jobs we regained from the 2014 fracking bust disappear and a leaner, smaller industry in the next two years with more consolidations and bankruptcies taking place.” 

Houston in one word – resilient 

One of the biggest determining factors in an economic rebound will be the level of fear people still have around the virus, Jankowski said. Even on the downward slope people will practice at least a degree of social distancing. He reiterated the damaging shock to consumer confidence the virus has caused.  

“The economy really won’t be able to recover until people feel comfortable spending again. However, if there’s one word I would use to describe Houston, it would be resilient,” Jankowski said. “We've been through five downturns since the 1980s and yet the economy is larger now and more diverse than ever before.” 

Related News

Membership

Partnership Members Making News - May

5/20/25
The Greater Houston Partnership celebrates our members making important announcements and sharing news about their operations and impact in our region. Learn more about some of those announcements over the last month below. Business Moves Aramco, officially the Saudi Arabian Oil Co., announces 34 memorandums of understanding with U.S. companies, many of which are based in the Houston area, totaling $90 billion of potential value. CenterPoint Energy begins on a new 160 megawatt/320 megawatt-hour Battery Energy Storage System, or BESS. The project aims to address grid-scale energy storage bringing reliability and resiliency to the Texas power grid. Exxon Mobil Corp. (NYSE: XOM) has started renovating its headquarters in Spring, Texas to make room for its new integrated research center, registering nearly $30 million worth of renovations and new construction under the title "North America Laboratory Integration Project." Exxon Mobil Corp. (NYSE: XOM) has signed a key offtake deal to supply Japan-based Marubeni with 250,000 metric tons of low-carbon ammonia a year from its planned Baytown project. Harris County has unveiled Bayland Park’s master plan to improve facilities, programming and connectivity and concentration on active parks, pedestrian safety, gardens, and farms. The city of Montgomery is set to break ground on its first H-E-B in 2026 at the southeast corner of Texas 105 and FM 2854. The Woodlands-based Howard Hughes Holdings Inc. (NYSE: HHH) has completed a $900 deal with Perishing Square to become a diversified holding company. Howard Hughes Holdings Inc. (NYSE: HHH) acquires the former McKesson Building in The Woodlands for $16.3 million. The Class A building with 200,000 square feet of available office space will be renamed "7 Waterway." NRG Energy Inc. (NYSE: NRG) is set to double its power-generation capacity in a $12 billion deal, acquiring a portfolio of natural gas generation facilities along with a commercial and industrial virtual power plant platform from LS Power Equity Advisors LLC. Rice University breaks ground on the Moody Center Complex for Student Life, a 75,000 square foot building offering a cafe, coffee house, meeting rooms, study areas and student services office. The project is expected to be completed by fall 2027. Shell Energy Stadium in Houston's East Downtown, or EaDo, will host the FIFA 2026 Fan Festival, featuring an indoor food court, mini soccer fields, interactive activities and more on a 39-day basis to watch the 104 matches of the World Cup. Sugar Land City Council approves the Lake Pointe Green redevelopment project, which seeks to repurpose more than 1 million square feet of office space, parking lots and trails of the former Fluor engineering and construction firm headquarters. University of Houston-Downtown expands into Amegy Bank's downtown building, which will be used for workshops, classes, events and more. The new 17,000-square-foot space on the 10th floor of the Amegy Bank building is called UHD@1801 Main, or “The Launchpad.” Education Alvin Community College has approved an online bachelor’s degree in nursing after the increased demand for nurses with bachelor’s degrees from local healthcare providers. Houston ISD commits $40 million to both HVAC and roofing updates, in which $21.2 million would go toward HVAC system repairs. 28 schools are projected to receive upgrades. Houston Livestock Show and Rodeo commits to $500,000 in vocational scholarships in 2025 and increased to benefit 10 Houston-area colleges and trade schools. Memorial Hermann Health System and Aldine ISD partner with HEAL High School to offer health care career training and clinical experience in a school-within-a-school model. Texas A&M University will run the Federal Aviation Administration’s new Center for Advanced Aviation Technologies, which will consist of an airspace laboratory, flight demonstration zones, and testing corridors. Health Care Harris Health plans to open its $1.6 billion hospital at Lyndon B. Johnson site in early 2029 with approximately 400 employees. Houston Methodist ranks first in the 2025 Premier’s 15 Top Health Systems list under the  "Large Health Systems" category. The annual list ranks health systems based on clinical outcomes, extended outcomes, operational efficiency and patient experience. Kinder Foundation donates $150 million for a new healthcare facility focused on combating childhood cancer in partnership with The University of Texas MD Anderson Cancer Center and Texas Children’s Hospital. Innovation  Aurora has opened an over 90,000-square-foot terminal at a Fallbrook Drive logistics hub in northwest Houston to support the launch of its first “lane” for driverless trucks—a Houston-to-Dallas route on the Interstate 45 corridor. Ara Partners raises $800 million for its first-ever infrastructure-focused fund, targeting mid-market industrial decarbonization assets that are economic without federal incentives. Bank of America funds the restoration of Houston's iconic Rothko Chapel, including a documentary about the restoration. CenterPoint Energy Inc. (NYSE: CNP) builds out new tools and 100 weather stations around Greater Houston to prepare for hurricane season. Daikin Industries completes a nearly one-megawatt solar power plant at its Daikin Comfort Technologies North America campus southeast of Waller, projecting to eliminate an estimated 845 metric tons of carbon emissions each year. Downtown Houston+ has implemented a $400,000 pedestrian lighting project, deemed the "Underpassage," that will brighten a stretch of downtown Houston at Texas Avenue and Rusk Street in light of the FIFA 2026 World Cup Fan Festival. Harris County has approved a five-point Climate Justice Plan to address issues relating to ecology, infrastructure, economy, community and culture. Intuitive Machines plans an orbital reentry vehicle, backed by $10 million from the Texas Space Commission, to fly fly autonomously and be capable of landing at airfields. Mercury Fund continues to leverage artificial intelligence to improve efficiency and decision-making processes within industries, drawing interest from traditional VC hubs. Rice University has opened the headquarters for the new RBL LLC incubator at Texas Medical Center, aiming to incubate three to four biotech companies annually.  Transportation  Downtown Houston+ leads the Main Street Promenade project, turning a stretch of Main Street into a pedestrian-friendly corridor in Downtown Houston. The $12 million project will work on seven blocks of Main Street that stretches from Rusk Street to Commerce Street. Houston ISD explores a partnership with METRO as it retools its transportation services for the 2025-2026 school year. Southwest Airlines Co. (NYSE: LUV) has filed an application seeking approval from the Department of Transportation to broaden its international flights in accordance to the Open Skies agreement, which would permit future flights to over 130 countries that are subject to the agreement. If you are a member and want us to help communicate news about your organization, please send a press release or information about the announcement to member.engagement@houston.org and we will share it with our content team for possible inclusion in an upcoming roundup. Learn more about Partnership membership.
Read More
Membership

New Partnership Members in April

5/5/25
The Greater Houston Partnership welcomed 18 new member companies in the month of April. The Partnership works to connect companies with resources, information and networking opportunities to help increase business while also providing a platform to influence the direction of the region.  New members who joined in the month of April include: 512 Financial: Headquartered in Austin, 512 Financial is a business and consulting service with experts in accounting, finance, HR, and marketing, offering sophisticated fractional services to propel businesses forward. Website. 7th Echelon: 7th Echelon is a cybersecurity company based in Houston, specializing in providing tailored security solutions and services to help organizations protect their digital assets and infrastructure from evolving cyber threats. Website. Allstar Pizza & More: Allstar Pizza & More is a pizza company with locations in Clute and Lake Jackson, Texas, known for serving up a variety of pizzas, along with other menu items. They aim to provide delicious food and a welcoming atmosphere for the community in the Brazosport area. Website. Avatar Innovations: Avatar Innovations is a Canadian-based venture studio focused on driving energy transition by partnering with the oil and gas sector to develop and implement innovative CarbonTech solutions. Website. Bot Auto: Bot Auto is an L4 autonomous trucking company based in Houston, Texas that operates an autonomous truck fleet and offers Transportation as a Service (TaaS) to freight customers. Website. BrightMind Consulting Group: Based in Houston, BrightMind Consulting Group is a business management consulting firm that partners with organizations to drive strategic growth and operational excellence through tailored solutions in areas like business transformation, technology adoption, and organizational development. Website. Charles River Laboratories: Charles River Laboratories provides essential products and services to help accelerate the discovery, early-stage development, and safe manufacturing of novel drugs and therapeutics. They offer a comprehensive portfolio that supports pharmaceutical and biotechnology companies worldwide in their efforts to improve human health. Website. Dayforce: Dayforce is a global human capital management (HCM) software company that offers a unified platform for payroll, benefits, workforce management, talent management, and HR service delivery, empowering organizations to manage their entire employee lifecycle from recruitment to retirement. Website. Galaxy Technology Hires: Galaxy Technology Hires is an engineering and technology recruitment firm, headquartered in Houston, Texas providing custom solutions to name generation and sourcing, to research and organizational mapping, to full cycle recruiting. Galaxy Technology Hires also offers retained search, contingent search, executive search, and recruitment process outsourcing (RPO) services. Website. K & K Data Service Inc.: K & K Data Service Inc. is a company based in the United States specializing in comprehensive data center construction, operational maintenance, and related integrated solutions. Website. League of Women Voters of Houston: League of Women Voters of Houston is a nonpartisan political organization that encourages informed and active participation of citizens in government and influences public policy through education and advocacy. Website. Libyan National Oil Corporation: The Libyan National Oil Corporation (NOC) Houston Branch serves as a crucial hub for managing and executing turnkey procurement on behalf of all Libyan oil subsidiaries. This branch is tasked with selecting professional suppliers, establishing key framework agreements, and supporting vital training programs to enhance the industry's capabilities. Website. Logica Corp: Logica Corp delivers innovative technology solutions and consulting services, specializing in areas like data analytics, cloud computing, and custom software development to help businesses optimize their operations and achieve their strategic goals. Website. Maintenance Warriors: Maintenance Warriors provides comprehensive commercial and residential property maintenance services, offering solutions for everything from handyman repairs and cleaning to landscaping and preventative maintenance. Website. Markovich Grover PLLC: Markovich Grover is a Houston-based law firm specializing in complex commercial litigation, bankruptcy and restructuring, and energy litigation, representing clients across various industries with a focus on achieving favorable outcomes through strategic and effective legal advocacy. Website. MetroNational: MetroNational is a prominent Houston-based real estate development and investment firm known for its diverse portfolio of commercial, residential, and mixed-use properties that have significantly shaped the city's landscape. Website. Shell Federal Credit Union: Shell Federal Credit Union is a member-owned financial institution serving the Houston, Texas area, offering a range of financial products and services such as checking and savings accounts, loans, and investment options, with a focus on providing personalized service and supporting the financial well-being of its members. Website. Weltrio: WelTrio is a Houston-based company specializing in providing comprehensive language solutions, including translation, interpretation, and localization services, to help businesses and individuals communicate effectively across diverse linguistic and cultural landscapes. Website. Click here to see the Partnership's Membership Directory. To learn more about membership with the Greater Houston Partnership click here, or contact membership@houston.org.
Read More

Related Events

Membership

Membership 101

Join the Partnership for Membership 101 on August 5 to get an overview of member benefits, upcoming Partnership programs and events, and resources.  This is open to nonmembers and members with opportunities…

Learn More
Learn More
Executive Partners