Monday, October 13, 2008

Houston Best Performing Large City - Milken Institute

The Milken Institute recently released their 2008 list of Best Performing Cities, and Houston was the highest ranked very large metro at #16, up from #32 last year. By comparison, NYC was #85 (sure to fall hard next year after this meltdown), LA was #126, and Chicago was #160. Relevant excerpts:
Texas performed particularly well in the 2008 index, with six cities placing in the top twenty-five large metros (more than any other state). Thanks to its heavy concentration of oil and gas operations, Texas was a clear beneficiary of rising energy prices and renewed activity in the industry. Additionally, several Texas metros received a boost from continued strength in technology hardware and services. While the housing downturn has been severe in states such as Florida, California, Arizona, and Nevada, Texas has not experienced a similar decline.
Because America’s largest metropolitan areas are characterized by high density, with minimal room for expansion, we have broken out their performances separately. It isn’t reasonable to expect cities like Los Angeles, New York, or Chicago to grow at the same rate as Provo, Raleigh, or Austin. However, the big metro areas could learn something from the favorable business climates promoted by these fast-growing areas.

The best performer among the nation’s largest metros, with an overall ranking of 16th place, Houston–Sugar Land–Baytown, Texas, expanded its job base by a whopping 3.2 percent between March 2007 and March 2008, the second-largest increase in the nation. The one-year indicators for job and wage growth also showed robust gains, rising 3.0 and 4.0 percentage points faster, respectively, than the national average. Opportunities stemming from the energy industry, specifically with respect to oil exploration in the Gulf, have been a key engine of growth. Industries that support oil exploration have also been performing well. The heavy and civil engineering construction sector expanded by 5,700 jobs, while specialty trade contractors added another 7,800 workers in 2007.
Houston–Sugar Land–Baytown, has climbed up in the rankings, rising from 32nd to 16th place. Among the nine measures used to compile the overall index, Houston’s most recent job momentum performance (comparing March 2007 and March 2008) was most notable. The metro area expanded its job base by a whopping 3.2 percent, the second-largest increase in the nation.... In terms of high-tech, machinery manufacturing grew 5.0 percent between 2006 and 2007, generating 3,800 high-paying jobs. The presence of key players in the region (namely Exxon-Mobil, Shell, Chevron, and BP) will help sustain the industry’s growth.
While we're looking at a slowdown with a national recession and oil easing back in the sub-$100 range, I still think we'll be at the top of the big metros next year. In fact, when my wife started joking (?) recently about moving out of the country because of the financial meltdown, I pointed out we're probably in one of the best-positioned cities (and states) in the world to ride out a global slowdown or even recession. Here's to hoping it's a mild one, here and everywhere...

Hat tip to Josh for the heads up on the report.

One more announcement: in case you missed it in Rad Sallee's last Chronicle column today (best of luck, Rad), Texas Lyceum is having a public conference on state transportation issues at the Reliant Center on Wednesday, December 3rd. It looks like a pretty interesting agenda with a lineup of heavy hitter panelists, so I hope to see some of you there. Details and registration here.



At 8:06 AM, October 14, 2008, Anonymous Anonymous said...

Anyone have the word on who METRO will appoint to brown nose them at the Chronicle? Rad was practically on the payroll for METRO based on the biased reporting (lack of finding the truth) on METRO issues.

At 5:54 PM, October 15, 2008, Anonymous Anonymous said...

I think what matters here for Houston not crashing, can be answered with one question. What price per barrel of oil have the oil companies been using to decide wether or not a oil project was viable? As long as oil stays above that price we should see continued growth.

At 8:30 AM, October 16, 2008, Anonymous Anonymous said...

Depends on the company. I've saw some estimates in the spring that said up to $120, then falling to $80-90 for a few years.

If it turns out to be $45 though, some companies will be in trouble.


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