Houston Job Market Set For Positive Growth in 2018

The job market in Houston is rebounding after the collapse in crude prices and the devastation caused by Hurricane Harvey and seems all set for a year of steady growth in 2018. Employment forecasts for the region are very positive and it is estimated that the city could add up to 70,000 jobs this year. [1]

Recovery of Job Growth

It has been a rollercoaster ride for Houston in the past few years. In 2013, the city outranked and outperformed the rest of the country in terms of job creation and enjoyed a period of high growth and with tax cuts, more growth is expected. [2] The very next year, however, crude prices collapsed sharply, which impacted the local economy and the job market negatively.

In the following two years, the region lost over 81,000 jobs in the oil and natural gas sector alone, making the period from 2014 to 2016 the worst downturn in the energy sector in the past three decades. [3]

In 2017, however, the city recovered remarkably well. Statistics show that the nine-county Houston metropolitan area added 46,000 jobs in 2017, which was a significant increase from the previous two years – 18,700 jobs in 2016 and a mere 200 jobs in 2015. [4]

Hiring in December 2017 was up by 30.7% compared to December 2016. If the variations in seasonal hiring are excluded (the holiday season in December), hiring in December 2017 was nearly the same as that in November.

The Impact of Hurricane Harvey

Just as the market was rebounding and recovering, it was hit by an unexpected devastation in the form of Hurricane Harvey. The damage caused by the hurricane, which was one of the most destructive weather events in recent history, amounted to $80 billion, a major share of which was borne by Houston. [5]

Surprisingly, the city’s core economic base, which is driven by oil exploration and production, medical services, and aerospace industries, was largely unaffected by the hurricane.

As a result, the market was able to rebound much sooner than most people expected, thanks in part to the federal aid that poured into the region as well as the spur in economic activity caused by the increase in demand for construction supplies, furniture, and vehicles.

Increase in Construction Activity

By September 2017, the construction sector had suffered a loss of 7,200 jobs and was on its way to lose more than 10,000 by the end of the year. However, the destruction caused by the hurricane, which affected over 160,000 homes in the metro area alone, resulted in a major jump in construction activity.

From September to December 2017, the city approved a large number of residential permits, the total value of which was around $949 million – a staggering 76.1% increase from the previous year. As a result, the sector lost only 800 jobs last year.

Job Gains in Other Sectors

Banking, insurance, and real estate sectors added a total of 3,800 jobs in 2017. The jobs were mostly added towards the end of the year, thanks to the increase in residential property sales as well as commercial leasing activity in the aftermath of the hurricane.

Manufacturing, employment services, and professional, scientific, and technical services sectors added 8,800, 10,700, and 7,500 jobs respectively, accounting for a majority of the jobs created in 2017. The public sector added 8,000 jobs, the majority of which were created in the education sector. Retail and food and accommodation services sectors only added 2,800 and 2,600 jobs last year – their weakest performance in a long time.

A Solid Year for Houston Job Market

On the whole, 2017 was a good year for the Houston job market. In December 2017, the total number of unemployed people in the region was significantly lower at 143,787, compared to 174,603 in December 2016. The unemployment rate dropped from 5.3% in December 2016 to 4.3% in December 2017 though America’s job numbers have been improving and America’s gross domestic product (GDP) in 2017 went up as well compared to previous years. It passed 3% for a quarter in back to back sessions (2nd and 3rd quarter) for the first time in a long time. [6]

Despite the disaster caused by the hurricane, the region not only managed to bounce back, but the job market actually grew at a faster pace compared to the previous few years. [7]

Moreover, the average hourly wage in many sectors in Houston is higher than the national average. The mean hourly wage in the city is $25.42, which is 7% higher than the national mean, which is $23.86.

Given here is a list of average hourly wage for a selected list of occupations. [8]

Occupational Group Average Hourly Wage in Houston Average Hourly Wage in the United States
Management $66.77  $56.74
Business and Finance $40.62  $36.09
Legal $60.87  $50.95
Computer and Mathmatical $43.74  $42.25
Food $11.35  $11.47
Office and Administrative Support $18.58  $17.91
Construction and Extraction $22.20  $23.51
Installation, Maintenance, and Repair $22.67  $22.46
Transportation $19.73  $17.34

Houston Job Market Forecast for 2018

One of the reasons why Houston always manages to bounce back after any kind of collapse – be it natural or manmade – is that its growth is tied to the country’s economic growth and global trade. The country, and the world to a large extent, buys what Houston sells – from natural gas to plastics, chemicals, and a wide range of other goods. The US economy and global trade forecasts for 2018 are positive, so it is fair to assume that this will be a year of positive growth for the city as well as already stated but needs to be emphasized. [9]

The Institute for Regional Forecasting at the University of Houston says that the rise in crude prices after a three-year lull could lead to sustained drilling in the oil fields, which in turn could keep manufacturers, energy service firms, and production companies busy throughout the year. The region’s job market is estimated to grow by 2%, which has been the average growth rate for the past 25 years. [10]

These estimations are based on several assumptions – the oil market remains stable, the region does not suffer another natural disaster and the global economy maintains the current rate of growth. If one or more of these things were to go wrong, it could have an impact on the job market and local economy.

2018 will likely be a solid year for Houston – in terms of economic growth as well as employment opportunities.


  1. https://us.hudson.com/latest-thinking-articles/postid/1931/the-2018-jobs-outlook-for-houston
  1. https://www.theatlantic.com/business/archive/2013/05/houston-is-unstoppable-why-texas-juggernaut-is-americas-1-job-creator/275927/
  1. https://www.dallasnews.com/business/energy/2017/03/14/crude-awakening-houston-lost-lot-oil-gas-jobs-initial-data-indicated
  1. http://www.houston.org/pdf/research/quickview/Economy_at_a_Glance.pdf
  1. https://www.bauer.uh.edu/centers/irf/houston-updates.php
  1. https://www.cnsnews.com/news/article/terence-p-jeffrey/12-years-gdp-grew-3-3-straight-quarters
  1. http://www.wrksolutions.com/Documents/Employer/LMI/unemploymentrates/Houston-LAUS.pdf
  1. https://www.bls.gov/regions/southwest/news-release/OccupationalEmploymentandWages_Houston.htm
  1. https://www.houston.org/assets/pdf/economy/Employment-Forecast-2018-web.pdf
  1. https://www.houstonchronicle.com/business/article/Houston-could-add-70-000-jobs-next-year-forecast-12336671.php