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Houston Region May Account for Majority of Economic Gains in Texas

Published Nov 15, 2019 by A.J. Mistretta

Houston's economy has been consistently growing at a steady pace, and one expert says if it continues, the area could account for as much as 30% of the economic gains in Texas over the next 25 years. 

That’s according to a new analysis from Texas economist Ray Perryman. Based on current expectations, real gross product in Houston could grow as much as 3.13% annually - or more than 75% - through 2045, which would add more than $667 billion to the state’s economy. That’s more than any other Texas metro, with the Dallas region expected to make up 24% of growth, followed by Austin at 9% and San Antonio at 7%. 

Perryman’s report also forecasts employment will grow by 1.7 million jobs for a total of 4.9 million by 2045. “The most significant job gains in the area are projected to be in the services sector, with employment expanding by 2.14% annually. Growth in output will be led by manufacturing at a 3.83% annual pace, followed by information at 3.66%,” according to the report. 

Total personal income in the Houston region is expected to increase 3.35% to $846.5 billion. 

Nearly 73% of Texans live in the state’s largest metro regions. That percentage has been steadily rising in recent decades. Those large metro areas drive overall growth in the state economy, accounting for eight out of every 10 new jobs and about $8 out of every $10 in new output (real gross product) over the long-term horizon, according to the report. 

Get the latest Houston area employment figures and more about the local economy

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LLC, an energy investment and advisory firm.  “The economic vitality and growth of our region’s economy is inextricably tied to the energy industry,” Tudor said, adding that the Partnership and its members “should use our convening power to rally our companies, political leaders and fellow citizens to position Houston as the city that will lead this energy transition.” The Partnership will launch a new initiative aimed at accelerating Houston’s activity around energy transition, while existing committees will continue efforts to bring energy tech and renewable energy companies to Houston; explore the policy dimensions of carbon capture, use, and storage; and advocate for legislation that helps ensure the Texas Gulf Coast is positioned as a leader in that technology.  Houston business leaders have a responsibility to lead the transition to a cleaner, more efficient and more sustainable, lower carbon world, Tudor said. “We need to be the driver, not the passenger.”  Highlighting some of the changes and milestones reached in Houston over the last decade*, Partnership President and CEO Bob Harvey said that while the last 10 years were transformational for Houston, the next decade may be to be even more critical to the region’s long-term success. “I believe the decisions we make and the work we do together in the next few years will determine the trajectory of Houston for the next several decades and beyond,” Harvey said.  2019 Key Accomplishments  The Partnership’s 2019 Board Chair, Scott McClelland, said he was pleased with the organization’s successful efforts on major initiatives last year. Through its public policy committees, the Partnership influenced key bills during the 86th Texas Legislative Session, including House Bill 3 that brought $5 billion in new state funding into the public education system and Senate Bill 7 that resulted in $2 billion in state funding for statewide recovery and future flood mitigation.  “If there’s one big thing I learned over the last year, it’s that the key to making this city better for everyone is having a lot of Houstonians involved in the effort,” said McClelland, president of H-E-B. “There’s power in numbers. It’s a force multiplier.”  Harvey also pointed to Houston’s recent success in bolstering its innovation ecosystem—a move critical to the region’s ability to compete with other global cities. Last summer, Rice University broke ground on The Ion, a 270,000-square-foot innovation center that will anchor the broader 16-acre South Main Innovation District. Other startup incubators and accelerators have opened their doors throughout the city in recent months, including MassChallenge, The Cannon, Gener8tor, Plug and Play and more. The Partnership also played a role in fintech company opening its first office outside of Silicon Valley here in Houston in September.  In January 2019, the Partnership launched a new strategic initiative, Houston Next, and a complementary $50 million capital campaign to support the effort. Designed to advance Houston’s position as a great global city, the plan focuses on three core areas: creating a strong, diverse 21st-century economy, ensuring a great quality of life and supporting opportunity for all. Houston Next aims to empower local business leaders to accelerate the region’s progress at the intersection of those three areas of impact and ensure Houston’s continued success. 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Consider:  •    The region added more than 1.1 million residents over the last 10 years an increase of more than 18 percent.  •    Houston became the most diverse city in the nation, now led by its Hispanic population and the fastest growing Asian population in America.  •    The Houston region added $64 billion to its GDP, a 17 percent increase in real terms.  •    Foreign trade expanded by nearly $24 billion, making Houston the most trade focused metropolitan area in the nation.  •    Houston added 615,000 net new jobs over the last decade.  ### Greater Houston Partnership  The Greater Houston Partnership works to make Houston one of the best places to live, work and build a business. As the economic development organization for the Houston region, the Partnership champions growth across 11 counties by bringing together business and civic-minded leaders who are dedicated to the area’s long-term success. Representing 1,100 member organizations and approximately one-fifth of the region’s workforce, the Partnership is the place business leaders come together to make an impact. Learn more at CONTACT:         Maggie Martin      Senior Manager, Marketing & Communications      (o) 713-844-3640      A.J. Mistretta     Vice President, Communications              (o) 713-844-3664 (c) 504-450-3516 |       
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