BG Group, LyondellBasell, Halliburton, Occidental Petroleum, Petrobras, Marathon Oil, Anadarko Petroleum, Transocean, Ap
Houston
Economic Outlook
2018
HOUSTON 2018
ECONOMIC OUTLOOK
Houston’s Economy Back On Track
EXECUTIVE SUMMARY
Houston ranked among the top-performing U.S. metros last year and has historically been a top 10 metro leading the nation in population and job growth. In March, The Brookings Institution ranked Houston 5th best performing metropolitan area by change in growth, 2010-2015, in it’s 2017 Metro Monitor. According to the U.S. Census Bureau, Texas suburbs, including Houston’s, made up half of the country’s 10 fastest growing cities between 2015 and 2016. The Texas Demographic Center’s Fast Growth Scenario projects the Houston-The Woodlands-Sugar Land MSApopulation to growth 2.3% in 2018. Since the dramatic fall of oil prices that occurred in late 2014, Houston’s economy slowed significantly and grew at a lesser pace in 2015, 2016 and 2017 than its’ average annual rate. Even though Houston’s economy saw accelerated growth in 2017, it was well below Houston’s potential. Future growth forecasts are promising as local economists forecast about 45,000 jobs or slightly more in 2018 and expect that number to increase annually through 2021. Houston’s economy was jolted in August 2017 when Hurricane Harvey slammed the Texas Gulf Coast and dumped over 50 inches of rain over a three-day period. The event caused widespread flooding, destroying homes, businesses and infrastructure. Further, the historical rainfall totals caused supply chain interruptions, halted distribution logistics and shut down the Port of Houston, manufacturing plants and retail stores for at least a week. Houston area retail spending rose the week leading up to the event and then plummeted 58.7% the week after. The good news is that Houston’s resiliency lead to an uptick in consumer spending within weeks after the event, mostly caused by area residents purchasing replacement items damaged by the storm. HOUSTON, TEXAS METRO AREA DETAIL
L WAL
AUSTIN
ER
HOUSTON
J OBS G AI NED
2018 2017 2016 2015
estimated 45,500 estimated 29,700 18,700 200 HOUSTON U NEMPLOY M E NT PERCENT (%)
11/2017 11/2016 11/2015
4.3 5.2 4.8 HOUSTON MSA POP UL AT I ON IN MILLIONS
2017 2016 2015
G ROW TH (%)
6.93 6.77 6.62
2.3 2.3 2.5
ENERGY: OIL & NAT URAL G AS W TI CRUD E O I L: PER BAR REL
08/2017 08/2016 08/2015 08/2014
$56.54 $51.97 $37.19 $59.29 N ATU RAL G AS: PER M M Btu
SAN JACINTO MONTGOMERY
HOUSTON MSA EM P LOY M E NT
LIBERTY
HARRIS
12/2017 12/2016 12/2015 12/2014
$2.82 $3.59 $1.93 $3.48
CHAMBERS
FORT BEND
IMPORT / EXPORT T RAD E GALVESTON
BRAZORIA
Houston’s strategic location and core strengths, including an expanding healthcare sector, cutting-edge medical advancements, technological breakthroughs across industries and strong import/export trade activity (No. 1 US port in foreign tonnage), uniquely position it to play a vital role in meeting national and global market demands. Houston has and will continue to stand as a leader among U.S. metros and the world.
HA S A IR F R E IGHT: IN THO USANDS M E TRI C TO NS
2017 2016 2015 2014
455.8 426.7 475.2 446.5
PHA TOTA L TON N AGE ( short tons): I N M I LLI O NS TO NS
2017 2016 2015 2014
38.3 35.1 36.1 37.8 (Port statistics exclude leased facilities)
HOUSTON ECONOMIC OUTLOOK
PAGE 2
Population Growth H O U S T O N P O P U L AT I O N A S O F J U LY 1
2016 2015 2014 2013
2,303,482 2,284,816 2,243,999 2,204,406 2017 population releases May 2018
Houston ranks among the leading metropolitan areas in the U.S. and is the fourth largest city and the fifth largest Metropolitan Statistical Area (MSA) in the nation. Metro Houston area, which consists of ten counties, grew by more than 125,000 people between July 2015 and July 2016, making it the second fastest growing metropolitan region in the country. Despite the fall in oil prices, Metro Houston’s population gain remains solid. Forecasts show Houston’s population growth to be between 1.5% and 2.3% in 2018. On a more long-term basis, demographers project strong population growth for the area over the next thirty years as domestic and international migration trends favor Houston’s geographical, cultural and economic strengths. According to the U.S. Census Bureau, Houston had a net gain of 18,666 new residents in 2016, which is low compared to the 40,817 resident net gain in 2015. The median household income for the Houston-The Woodlands-Sugar Land metro area was $61,708 in 2016, down 0.4% from 2015. Houston’s 2016 median household income is more than 9.0% higher than both the median Texas and U.S. household incomes.
2017 FORTUNE 500
Twenty of America’s top 500 companies are headquartered in Houston. Four of Houston’s top five are in the energy industry.
HOUSTON TOP 5 FORTUNE 500 N ATION A L R A N K
COMPA N Y
REVENUE
in billions
34 57 115 122 141
PHILLIPS 66 SYSCO CONOCO PHILLIPS ENTERPRISE PRODUCTS PARTNERS PLAINS GP HOLDINGS
$72.4 $50.4 $24.4 $23.0 $20.2
Houston’s strong economic base continues to be a key factor, driving both domestic and international migration trends, although Houston’s Fortune 500 rankings prove to be less impressive than last year, with three Houston companies falling off the 2016 list. Houston still ranks third among U.S. cities with the most Fortune 500 headquarters with twenty (20) companies on the 2017 list, following New York with a total of sixty-eight (68) and Chicago with thirty-four (34). Phillips 66 ranked highest on the list again list again for Houston-based headquarters on the Fortune 500 list, however fell from its No. 30 ranking with $87.2 billion in revenue to a No. 34 ranking with $72.4 billion, a drastic 20.4% decrease in revenue. Statewide, Texas was the No. 3 ranking state with fifty (50) companies on the list, just three less than California and four less than New York with fifty-five (55). All but three of Houston’s twenty (20) companies on the Fortune 500 list are in the energy industry and the weakened rankings of each company on the list reflect the negative effects that low oil prices have on Houston energy companies. Houston area residents are well-educated, with the majority of the population over 25 years of age holding a high school diploma and residents with college/graduate educational studies outnumbering those with less than a high school education. This high level of educational achievement is not surprising given Houston’s numerous nationally recognized colleges and universities, as well as technical and trade schools, including Rice University, University of Houston, University of St. Thomas, Texas Southern University, Houston Baptist University, Baylor College of Medicine, San Jacinto College, Lone Star College and Houston Community College. Rice University ranks in the No. 14 spot in U.S. News & World Reports National University Rankings 2017 guide to America’s best colleges, the only Texas college in the top 20. Bolstered by above-average demographic trends and a strong base of diverse industries, Houston is well-positioned to compete in today’s global markets. Long recognized as the energy capital of the world, with every major energy company represented locally, Houston now stands as a global example of economic diversity. The area is home to a thriving base of industries including medical/biomedical technology, global trade (particularly airborne and waterborne domestic/international cargo), aeronautics, plastics manufacturing, electronics, computers, software design and integrated power. SOURCES: : U.S. Census Bureau, Greater Houston Partnership; Fortune Magazine
HOUSTON ECONOMIC OUTLOOK
PAGE 3
Employment Sector
SELECT MAJOR AREA
EMPLOYERS
Houston’s employment sector is large and diverse, with over 3.0M non-farm payroll jobs reported in November 2017. In 2017, Houston only added an estimated 29,700 jobs, which is one-half of the historical average annual job growth. Looking forward, Houston’s short-term job market is expected to see lower than average growth. The Greater Houston Partnership has forecasted 45,500 jobs for 2018. According to the U.S. Bureau of Labor Statistics, Houston’s industry sectors that posted annual losses of jobs between November 2016 and November 2017 include construction, information and wholesale trade. Industry sectors that registered annual job gains during the same time period include mining and logging, manufacturing, finance and insurance, real estate and rental leasing, professional business services, educational services, health care and social assistance, accommodation and food services, other services and government. Job growth in mining and logging is a good indicator that Houston energy industry companies may be putting the worst of the energy downturn behind them.
HOUSTON MSA ANNUAL JOB GROWTH
Houston ranked 1st on Money’s “Best City For College Graduates” (May 2017) AND
A Top 10 Metro in The Kauffman Index 2017 “Startup Activity” Metropolitan Area and City Trends
HOUSTON/SUGAR LAND/BAYTOWN ANNUAL JOB GROWTH 150,000 118,800
100,000
94,000
118,200
90,400
83,100
LAYOFFS BEGIN MIDDLE OF Q1 2015 45,500
50,000
50,300 21,300
29,700
18,700
0
200
-50,000 OIL PRICES FALL START OF Q4 2014
-100,000 -150,000
-110,500
THE GREAT RECESSION 2007
2008
2009
2010
ENERGY DOWNTURN 2011
2012
2013
2014
2015
2016
2017*
2018*
*projected
SOURCES: U.S. Bureau of Labor Statistics
HOUSTON ECONOMIC OUTLOOK
PAGE 4
Business Climate Houston has long been recognized among the most competitive U.S. cities for corporate relocation and expansion activity. Houston ranked third among the nation’s top ten largest metro areas enriched by facility project investment from corporations in 2016, according to Site Selection. In addition, Chief Executive Magazine (for the twelfth straight year) named Texas the “2017 Best State for Business.” In addition to its diverse industries and educated/skilled workforce, a key factor underscoring Houston’s business appeal is the fact that it is one of the least expensive major U.S. cities in which to conduct business. Significant benefits include the absence of state or city income taxes, no state property tax, as well as a moderate cost of living index. H O U S T O N / S U G A R L A N D / B AY T O W N M S A 2 0 1 7 GROSS METROPOLITAN PRODUCT $491.3 BILLION
Port Houston Ranked No. 1 U.S. Foreign Tonnage Ranked No. 2 U.S. Total Cargo Value Largest Gulf Coast container port
Airport System Ranked No. 10 U.S. Airport Passengers 54.7M Passengers in 2017 455,800 metric tons of Air Freight in 2017
Energy Industry Global Energy Capital 4,500+ firms in the region 40 percent of the nation’s base petrochemical capacity
Texas Medical Center World’s Largest Medical Complex (1,345 Acres) 106K Employees 59 Member Institutions 8M+ Patients Annually 16K International Patients Annually
NASA /Johnson Space Center 1,700-acre Complex Major Employers > The Boeing Company > Lockheed Martin > Jacobs Engineering > Oceaneering Space Systems > Raytheon Company
SOURCES: Federal Reserve Bank of Dallas; Port Houston; Fly2Houston.com; Greater Houston Partnership; TMC, NASA/JSC
As a major transportation hub with two major airports, a world-renowned port and superior rail and road infrastructure, Houston facilitates the interconnection of global business locations. Business alliances with major U.S. and international markets are further enhanced by the presence of 91 foreign consulate offices in Houston. As of 2017, Houston still ranks third in the U.S. – following New York and Los Angeles – in foreign consulate representation. Houston’s ability to foster continued expansion in future-growth industries responsible for generating high quality, well-paid jobs across all business sectors has placed it in the top tier among U.S. cities. With its numerous business advantages, Houston is well-positioned to successfully compete in today’s global marketplace. S E AT T L E
T R AV E L T I M E F R O M H O U S T O N CIT Y
Atlanta Chicago Denver Los Angeles Miami New York Seattle
D ISTA N C E
793 miles 1,090 miles 1,119 miles 1,550 miles 1,188 miles 1,631 miles 2,443 miles
AIR
RA I L
T RU C K
2.5 2.5 2.5 3.5 2.5 2.5 5.0
in hours 66 86 60 90 NA NA 60
13 18 17 24 20 20 36
C H I C AG O
NE W YO R K
D ENV E R LO S A NG E L ES AT L A NTA
H O USTO N
SOURCES: mapquest.com, Official Airlines Guide, BNSF Railway, Union Pacific Railroad, and Greater Houston Partnership Research Department
M I A MI
HOUSTON ECONOMIC OUTLOOK
PAGE 5
Global Energy Capital Houston is internationally recognized as the global energy capital, with virtually every segment of the energy industry represented in the region. It is also known as the global center for integrated power, a fast-growing new sector of the energy industry. In just over a decade, the number of Houston-based energy trading companies has tripled, with petrochemical capacity in the area nearly four times larger than the nearest competing U.S. site. All major oil and gas companies have extensive operations in the area, including ExxonMobil, Chevron, BP America, Citgo, Conoco, Phillips66, Shell Oil Company, BHP Billiton, El Paso Corp., TOTAL, BG Group, LyondellBasell, Halliburton, Occidental Petroleum, Petrobras, Marathon Oil, Anadarko Petroleum, Transocean, Apache, Hess Corporation, Newfield Exploration, Enterprise Products Partners and Plains All American Pipeline. HISTORIC CRUDE OIL PRICES $120 $100
Dec 2017: $57.88/bbl Dec 2013: $97.63/bbl
$/ bbl
$80 $60
According to BP’s 2017 Statistical Review of World Energy, global energy consumption increased 1.0% in 2016, below the 10-year average of 1.8%. North America consumed 21% in 2016 while Europe and Eurasia’s consumption was 21.6% and Asia Pacific consumed 42.0%. Based on the report, oil remains the world’s leading fuel. In 2016, 33.3% of global energy consumption was oil, followed by coal at 28.1% and then by natural gas at 24.1%.
$40
2017
2015
2013
2011
2009
2007
2005
2003
2001
$0
1999
$20
H I S T O R I C N AT U R A L G A S P R I C E S $14 Dec 2017: $2.81/MMBtu Dec 2005: $13.05/MMBtu
$/ M M B t u
$12 $10 $8 $6 $4
2017
2015
2013
2011
2009
2007
2005
2003
2001
$0
1999
$2
U . S . R O TA R Y R I G C O U N T S 2100
R ig Co u n t
1900
Nov 2017: Sept 2008:
911 1,935
17 00 1 500 1 300
The Henry Hub natural gas prices are projected to rise from an average of $3.05 per MMBtu in 2017 to $3.29 per MMBtu in 2018.
1100 900
SOURCES: Energy Information Administration; West Texas Intermediate; Baker Hughes; BP
2017
2015
2013
2011
2009
2007
2005
2003
2001
1999
7 00 0
The U.S. Energy Information Administration’s (EIA) Annual Energy Outlook released in January 2017 indicates overall U.S. energy consumption will grow at an average annual rate of 0.2% through 2040. West Texas Intermediate crude oil prices increased from $51.97 per barrel in December 2016 to $57.88 per barrel in December 2017. The average price in 2016 was $43.33 per barrel and the EIA predicts the average price to rise to $48.83 per barrel in 2017 and $49.58 per barrel in 2018.
The U.S. rotary rig count increased annually by 57% to 911 rigs in November 2017, from 580 in September 2016. Year-over-year oil and gas exploration are up in the U.S. by 80% and 109%, respectively.
HOUSTON ECONOMIC OUTLOOK
PAGE 6
Petrochemical & Plastics Industry Texas is the largest chemical-producing state, generating $172 billion in annual revenue. Houston is a global leader in manufacturing petrochemicals, with the Houston Ship Channel recognized as the largest petrochemical complex in the U.S. The Houston/SugarLand/Baytown region operates the largest petrochemical plants, including Bayport Industrial District, Battleground Industrial Complex, Bayport Shipping Terminal and the Houston Ship Channel. Today, the chemical industry employs more than 100,000 workers directly with another 500,000+ related jobs in Texas and about half of those jobs are in the Houston region. In 2016, Texas led the nation in crude oil production, with 27 petroleum refineries producing more than 36% of the nation’s crude oil production. Houston accounts for over 42% of the nation’s base petrochemical capacity. According to the EIA, Texas leads the nation in fossil fuel reserves and is the nation’s leading natural gas producer, accounting for approximately 28% of total U.S. natural gas production. Based on data from Port Houston, the development of shale oil and gas increased the demand for container shipping and will increase future exports of plastics and chemicals. ENERGY
MAJOR HOUSTON REGION CHEMICAL PLANTS Air Liquide USA Air Products Baker Petrolite Corporation BASF Corporation Bayer Material Science BP Texas City Celanese Chevron Phillips Chemical DowDuPont ExxonMobil Chemical Goodyear Tire & Rubber Company INEOS Olefins & Polymers LyondellBasell Industries Lubrizol Corporation Marathon Petroleum Oxy Phillips66 Rohm and Haas Texas Shell Chemical Solvay Chemicals, Inc Total Petrochemicals USA Valero Refining Co
SOURCES: Energy Information Administration; Greater Houston Partnership
INDUSTRY
JAN 2018
U.S. crude prices climb after data shows drop in supplies
JAN 2018
Frackers could make more money than ever in 2018, if they don't blow it
JAN 2018
Keystone XL Pipeline obtains enough shipper commitments to proceed
JAN 2018
Permian Basin will drive record U.S. production in 2018
DEC 2017
Houston energy company Talos Energy LLC to move, expand HQ
DEC 2017
Cabot to sell Eagle Ford assets for $765M in cost-saving push
DEC 2017
15 firms leading the way on Energy Blockchain
OCT 2017
Boom in American LNG is shaking up the energy world
SEP 2017
U.S. oil stockpiles grow 4.6 million barrels
SEP 2017
Magellan, Valero form JV to partner on $820 million marine terminal near Houston
SEP 2017
U.S. oil company cash flow, production climbed in second quarter, EIA says
SEP 2017
DowDuPont opens massive ethylene and plastics plant in Freeport
SEP 2017
Permian could top out in 2021 unless tech overcomes geology, Wood Mac says
SEP 2017
Hurricane Harvey delays parts of Chevron Phillips petrochemical expansion SOURCES: Oil & Gas Journal; Houston Business Journal; Houston Chronicle
HOUSTON ECONOMIC OUTLOOK
PAGE 7
Port Houston Port Houston’s market strength and strategic location produces a winning combination for business growth and increased industrial development. The economic impact of Port Houston is significant, accounting for more than 1.2 million jobs and an economic value of $265 billion for the region. Port Houston generates $5 billion in state and local tax revenue annually and provides $56.5 billion in personal income and consumption expenditures. Port Houston is recognized as the No. 1 U.S. port in foreign waterborne tonnage and is the No. 3 ranked U.S. port in terms of total foreign cargo value. Having 46% of the Texas market share by tonnage and 95% market share in containers by total TEUs in 2016, it is clear that Port Houston is a key player in this significant statewide recognition. The Port is the largest Gulf Coast container port, handling 68% of U.S. Gulf Coast container traffic in 2016. Port Houston handled 38.3 million tons of cargo in 2017, up from 35.1 million tons in 2016. In 2016, the Port Commission approved an aggregate capital budget of $314 million for various infrastructure projects. Current capital improvement projects include adding or improving motorized and non-motorized transportation infrastructure, sanitary and storm-water sewer infrastructure, city facilities and other key projects. The projects are taking place at Turning Basin Wharf 23, Turning Basin South, BCT Wharf 3, BCT East End and C1, and the Bayport Wharf 2. One of the future projects will improve mobility and logistics, constructing 6,500 feet of rail across SH 146 to connect with the existing rail line to within 900 feet of the Container Freight Station Road in the Bayport Intermodal Facility. 2017 market share statistics were not published at the time this report was written. This page will be updated when the new statistics are released. Photo source: www.porthouston.com
Port Houston
Total Tonnage Handled 2013-2017 Total Tonnage
40,000,000 30,000,000 20,000,000 10,000,000 2013
2014
2015
2016
2017
HOUSTON ECONOMIC OUTLOOK
PAGE 8
NASA/Johnson Space Center NASA’s Johnson Space Center (JSC) is located on over 1,700 acres in the Clear Lake area of Houston. It was first established in 1961, and later renamed in 1973 in honor of the late President Lyndon B. Johnson, a native Texan. JSC is one of NASA’s largest research and development facilities and mission control for all U.S. manned space flight communications, including the International Space Station and Exploration Programs. From the early space exploration projects Gemini, Apollo and Skylab, came the historic moment when the first word from the moon was “Houston,” and deservedly so, as it took a 15,000-member team in Houston to develop, test and put into action what millions around the world watched on television in 1969. Since its inception, JSC continues to make significant advances in science, aeronautics, technology, engineering and medicine. NASA’s long-term plans involve deep space exploration; and Texas and Houston will play critical roles along the way. JSC’s workforce represents 11,000 jobs, including civil servants and contractor personnel employed on-site or in facilities in the area. JSC has a huge economic impact on Houston and Texas with a total requested 2018 budget of $4.7 billion, which designates $1.4 billion for the International Space Station, $1.2 billion for the Orion Multi-purpose Crew Vehicle, $731.9 million for the Commercial Crew Program, $210 million for Advanced Exploration Systems and $1.7 billion for the Commercial Cargo Program. The Mission Control Center (MCC) at Johnson Space Center directs all space missions, including international space station assembly flights. MCC also manages all activity on board the international space station. JSC serves as the lead NASA center for the International Space Station – a U.S.-led collaborative effort of 16 nations and the largest, most powerful, complex human facility to ever operate in space. JSC leads the way to deep space exploration by integrating science and engineering to develop how we travel, work, explore and live in deep space. Next stop, Mars!
Mobility Infrastructure Houston’s location in the south-central U.S. strategically places it equidistant from the nation’s major population centers – New York (1,631 miles) and Los Angeles (1,550 miles). Connection to major national and international locations is facilitated through Houston’s excellent transportation infrastructure, which includes the George Bush Intercontinental Airport, William P. Hobby Airport, Ellington Field, Port Houston, and the area’s well-integrated mainline railroads and trucking system. At right: In the Houston MSA, an extensive freeway system spans 747 miles. The Grand Parkway’s extension linking Hwy 290 to I-45 and I-45 to Hwy 59 - segments F-1, F-2 and G - opened to traffic in the first quarter of 2016, adding 38 miles of tolled roadway. Once the entire project is completed, the Grand Parkway will mark Houston’s third outer loop, improving Houston’s traffic flow immensely and allowing more flexibility when deciding where to work and live. Segments H, I-1 and I-2B are next up for expansion, with construction expected to be completed in 2021.
Planned & Ongoing Road Construction Projects STREET
FROM
TO
PROJECT DESCRIPTION
TOTAL
EST COMP DATE
US 290
I-610
Mueschke Rd
Widen mainlanes and HOV lane through 13 separate projects
$4.7 B
Fall 2018
I-610 E
I-45 N
Construct direct connector from I-610 eastbound to I-45
$44.2 M
OCT 2023
3 Pierce Elevated
I-10
I-69
Remove existing Pierce Elevated and construct parkway connectors into CBD
$158.1 M
TBD, in planning
4 Highway 288
US 59 Interchange
Pearland
Add toll lanes, 8 direct connectors at Beltway and I-610 interchanges
$815 M
Spring 2019
5 I-610 @ US 290
Old Katy Rd
Ella Blvd
Reconstruct US 290/IH 610 interchange w/ direct connectors/managed lanes
$282 M
Fall 2018
6 Gulf Frwy, Galveston Co Highway 96
Deats Rd
Widen to 8 main lanes and 2 two-lane frontage roads
$121.7 M
NOV 2021 TBD
1
2 Gulf Frwy @ I-610
7 North Frwy, Harris Co
Crosstimbers
Airline
Reconstruct frontage roads
$6.3 M
8 US 59, Fort Bend Co
Highway 99
FM 2919
Widen to 6 main lanes and 2 frontage road lanes through separate projects
$18.6-$66 M
Late 2020
9 I-610 at US 59
I-610
I-610
Reconstruct I-610 main lane bridge within the interchange at US 59 S
$46.7 M
TBD, in bidding
Battleground Rd
Improve illumination
$5.1 M
TBD, in planning
10 Highway 225, Harris Co Beltway 8
HOUSTON ECONOMIC OUTLOOK
PAGE 9
Airport System The Houston Airport System (HAS) is one of the world’s leading multi-airport facilities and includes George Bush Intercontinental Airport, William P. Hobby Airport and Ellington Field. HAS ranked 10th nationally and 29th internationally in passenger volume in 2017, carrying more than 54.7 million passengers and 455,805 metric tons of air freight, a 6.8% increase from 2016. The Houston Airport System is directly responsible for more than 230,000 jobs and has a local economic impact of more than $27 billion annually.
A I R PA S S E N G E R S D OMEST I C & IN T E R N AT IO N A L
6 0,000,000
International
Domestic
50,000,000 40,000,000 30,000,000 20,000,000
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
-
2007
10,000.000
IAH Air Freight Statistics & Trends IAH ranked 12th largest air cargo hub in the U.S.
GEORGE BUSH INTERCONTINENTAL AIRPORT/HOUSTON (IAH), situated
twenty-three miles north of downtown Houston, is the nation’s 12th busiest airport serving 42 million passengers in 2017 and offering more than 190 domestic and international destinations, including non-stop direct flights to major cities in Europe, Mexico, Latin America and Asia. IAH is served by 29 scheduled passenger airlines and numerous charter airlines. The airport has 880,000 square feet of cargo area with capacity to handle up to 454,000 tons of cargo. In 2017, the airport handled 445,266 metric tons of cargo, an increase of 7.2% from the previous year. Currently, IAH has five terminals, no takeoff and landing curfews and ample land to expand its facilities as requirements demand. The scope and quality of IAH facilities make it one of the top U.S. airports for international air cargo traffic.
IAH has 880,000 square feet of cargo area with capacity to handle up to 454,000 tons IAH 2017 air freight cargo exceeded 445,266 metric tons IAH has state-of-the-art facilities to globally transport time-sensitive products Houston is a major gateway for import-export trade and is expected to see continued growth IAH is the 12th busiest U.S. airport, serving nearly 42M passengers in 2017.
WILLIAM P. HOBBY AIRPORT (HOU) is located seven miles southeast of downtown Houston and is the 33rd busiest commercial airportin the U.S., handling over 13.2 million passengers in 2017. Hobby Airport also serves as a major regional center for corporate and private aviation, with four passenger airlines offering scheduled service to approximately 60 destinations within the the U.S., Mexico, Latin America and the Caribbean. There are 250 private aircraft based at Hobby, including 91 corporate jets and five fixed-base operators serving the airport. ELLINGTON FIELD (EFD) is located 15 miles southeast of downtown Houston
and supports the operations of the U.S. Coast Guard, Texas Air National Guard, Texas Army National Guard, NASA and a variety of general aviation tenants. In June 2015, the city of Houston was approved by the FAA to build and operate a licensed, commercial spaceport. The Houston Spaceport will be a launch site for spacecraft and is now one of ten cities in the country holding an approved spaceport license by the FAA. It is currently in the first development phase.
Photo source: fly2houstonspaceport.com
SOURCES: Airport Council International; Houston Airport System
HOUSTON ECONOMIC OUTLOOK
Texas Medical Center
Member Institutions Baylor College of Medicine CHI St. Luke’s Health Children’s Memorial Hermann City of Houston Department of Health and Human Services Coleman HCC College for Health Services DePelchin Children’s Center Gulf Coast Regional Blood Center Harris Health System Health Science Center Texas A&M University Houston Academy of Medicine Houston Hospice Houston Methodist Institute for Spirituality and Health LifeGift MD Anderson Cancer Center - World’s largest cancer center Memorial Hermann Menninger Clinic Michael E. Debakey High School for Health Professions Michael E. Debakey Veterans Affairs Medical Center Nora’s Home Prairie View A&M University Rice University Ronald McDonald House Houston Sabin Vaccine Institute Shriners Hospital for Children St. Dominic Village Texas Children’s Hospital - World’s largest children’s hospital and #1 in U.S. News & World Reports “Americas Best Hospitals 2017-2018” for Pediatric Cardiology & Heart Surgery
Texas Heart Institute Texas Medical Center YMCA Texas Southern University Texas Women’s University John P. McGovern Museum of Health and Medical Science The Texas Medical Center Library Thermal Energy Corporation (TECO) TIRR Memorial Hermann University of Houston University of St. Thomas UT Health UTMB Health
The University of Texas M.D. Anderson Cancer Center in the Texas Medical Center, ranked #1 in U.S. News & World Reports “America’s Best Hospitals 2017-2018” for cancer care.
PAGE 10
TEXAS MEDICAL CENTER The Texas Medical Center (TMC) – the world’s largest medical center – represents one of Houston’s major economic drivers and core industries with an estimated regional annual economic impact of $35 billion, according to a Bauer Business Focus interview with TMC’s CEO Robert Robbins. TMC is also one of Houston’s largest employers with 106,000 employees, including physicians, scientists, researchers and other advanced degree professionals in the life sciences. The internationally-renowned 1,345-acre TMC is the world’s largest medical complex of member institutions, including leading medical, academic and research institutions, all of which are non-profit and dedicated to the highest standards of research, education and patient preventive care. Over 50,000 students, including more than 20,000 international students, are affiliated with TMC, including college and health profession graduate programs. More than 8 million patients visit TMC each year, including approximately 16,000 international patient visits. Overall, the complex covers over 18 miles of public and private streets and roadways, with 50M SF of existing patient, education and research space. TMC has continued to grow and expand over the past several decades with the majority of growth occurring in the past ten years. The Center is located in the 110-acre University of Texas Research Park, a joint effort between the University of Texas Health Science Center, M.D. Anderson and General Electric Healthcare. TMC spends billions of dollars on research and charity care annually.
IAH
290 249
I-45
59
8 90
KATY
8
I-10
6
SUGAR LAND
8 59
I-10
CBD
610 GALLERIA
610
H
I-45
BELLAIRE 288
RICHMOND
HOU 8
SHIP CHANNEL GAL BAY
225 PASADENA 146
EFD
LEAGUE CITY
TEXAS MEDICAL CENTER LOCATION
Texas Medical Center World’s Largest Medical Complex (1,345 Acres & 50M Developed SF) 8th Largest Business District in the U.S. 106,000 Employees 8.0M Patients Annually 9,200 Patient Beds 180,000+ Annual Surgeries 13,600+ Annual Heart Surgeries
Houston MSA Health Care 128 Hospitals 18,681 Hospital Beds 16,070 Licensed Physicians 299,600 Health Care & Social Assistance jobs 2.3% Annual Employment Growth between December 2016 and December 2017
HOUSTON ECONOMIC OUTLOOK
PAGE 11
Biosciences & Biotechnology Biotechnology and the life science industry continue to expand in the Houston region with more than 100 institutions and companies attracting over $2.2 billion in research and development funding annually. Between 2005 and 2015, the Texas Emerging Technology Fund (TET) allocated more than $205 million in funds to 145 early-stage companies and $127 million in grant matching and research superiority funds to Texas universities. In 2015, the TET was replaced with a new program called the Governor’s University Research Initiative and the TET Fund was relocated under the management of the Texas Treasury Safekeeping Trust Company. In 2016, the Governor’s University Research Initiative (GURI) grant program recruited nine top researchers to lead cutting-edge research in Texas universities to spearhead new breakthroughs in science, technology, engineering, mathematics and medicine. The GURI grant awards total $34.3 million with one-to-one matching grant commitments from each university. In November 2017, the Governor’s office awarded two grants, each totaling $3 million. The state-funded Cancer Prevention and Research Institute of Texas (CPRIT) has invested $1.63 billion through more than 1,056 grants since 2010. CPRIT funding has attracted nearly 100 cancer researchers and labs to Texas and prompted $910.8 million in follow-on investment in CPRIT-supported companies. Leading research efforts in the area represent established and emerging industries, including nanotechnology, pharmaceuticals, nutraceuticals, genetics/genomics, biodefense and infectious diseases, stem cell research and oncology. B I O S C I E N C E S JAN 2018
Dunn awards support breakthrough research to scientists at Rice University and other GCC institutions
SEP 2017
Prepping for Mars, NASA launches new biosciences center
SEP 2017
Texas A&M researchers receive more than $9 million in grants for cancer efforts
SEP 2017
Device accurately identifies cancer in seconds during surgery
AUG 2017
Alzeca receives $11M for Early Alzheimer’s Detection Technology
AUG 2017
Research reveals how estrogen regulates gene expression, according to study at Baylor
AUG 2017
ViraCyte, LLC in Houston, receives $8.99M grant from Cancer Prevention and Research Institute of Texas
JUN 2017
Texas Biomed and UT Health Houston to team on $4.4M tuberculosis vaccine study
Outside of the TMC, Black Forest Technology Park, located in The Woodlands (30 miles north of downtown Houston), is a long-standing major research center designed specifically for scientific, research and biotechnology companies. Other established business parks/organizations geared toward biotechnology commercialization in the Houston region include the Genesis Biotechnology Park and BioHouston, Inc. Genesis Biotechnology Park comprises 16 innovative life science companies and researchers located just south of the TMC. The Park was developed to increase venture capital interests in Houston and is committed to supporting start-up companies by providing tenant options for shared office, wet laboratory space (including equipment) and flexible leases. BioHouston, Inc., a non-profit corporation founded by Houston-area academic/research institutions, is actively leading a broad-based effort to strengthen Houston’s position as a global competitor in life science and biotechnology. BioHouston’s Resource Center, the first incubator facility serving the Houston life sciences community, is housed at the Genesis Biotechnology Park, adding a key component to ongoing commercialization efforts. The Center is specifically designed to serve start-up biotech and life sciences companies by offering access to shared laboratory space, research resources and networking opportunities with a community of biotech entrepreneurs. The BioScience Research Collaborative built by Rice University is an innovate-space where scientists and educators from Rice University and other TMC institutions work together to perform leading research that benefits human medicine and health. Shortly after opening in 2010, the National Space Biomedical Research Institute (NSBRI) and Baylor College of Medicine’s Center for Space Medicine joined the Collaborative. Funded by NASA in collaboration with Baylor College of Medicine, the NSBRI is studying and solving the health risks and problems related to long-duration spaceflight. From a base of cutting-edge research, Houston has taken the next step in its evolution as a primary life-science cluster by creating an environment conducive for private companies to develop and market life science products. With key initiatives in place to bring together the public and private sectors, as well as significant improvements to the scope of services and incentives available to private companies, the infrastructure is in place to capitalize on Houston’s strong research base and convert it into commercialized product. With this process now in motion, the biotech future in Houston looks bright.
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HOUSTON HOUSTON ECONOMIC ECONOMIC OUTLOOK OUTLOOK LISA R. BRIDGES LISA R.ofBRIDGES Director Market Research | HOUSTON Director of Market Research | HOUSTON +1 713 830 2125 +1 +1 713 713 830 830 2125 2118 FAX +1 713 830 2118
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Lisa joined Colliers in 2010 as Director of Market Research bringing Lisa joined Colliers in 2010 as Director of Market Research bringing 26 years of commercial real estate experience to the firm. Lisa 26 years of commercial real estate experience to the firm. Lisa initiates proactive market research projects to further the business initiates proactive market research projects to further the business goals of the company. She writes and prepares 27 market reports goals of the company. She writes and prepares 27 market reports annually which include quarterly reports on Houston’s retail, office, annually which include quarterly reports on Houston’s retail, office, industrial and medical office properties. Further, she prepares industrial and medical office properties. Further, she prepares statistical ownership reports for various clients as well as an annual statistical ownership reports for various clients as well as an annual Houston Economic Overview. Lisa also creates PowerPoint market Houston Economic Overview. Lisa also creates PowerPoint market presentations, trade journal articles, and other marketing materials in presentations, trade journal articles, and other marketing materials in support of the company's business endeavors. She works with support of the company's business endeavors. She works with senior management in planning the company's marketing strategy and senior management in planning the company's marketing strategy and public relations support for local and national conferences, luncheon public relations support for local and national conferences, luncheon meetings, recruitment programs, and special events. Lisa works meetings, recruitment programs, and special events. Lisa works closely with the company's brokers to develop effective custom market closely with the company's brokers to develop effective custom market research material specific to both existing and potential clients. research material specific to both existing and potential clients.
Accelerating success. Accelerating success.
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