Houston's Economic Forecast: 'Pretty Mediocre Year'

HOUSTON, TX — Despite predicting that about 38,000 new jobs would be created in the Houston area in 2017, a local analyst said this week that oil's low prices are a heavy drag on the city's economy and would continue to be for the foreseeable future.

"Like you, I'm plenty tired of the crash of oil prices," Bruce Gilmore, director of the Institute for Regional Forecasting at the University of Houston's Bauer School of Business, told an audience on Thursday. "We're not going to get good strong growth based on $48 a barrel, where we were this morning."

Gilmore was presenting his findings from "Is the Oil Bust Really Over? And What Does It Mean for Houston?," a study he authored and which was released on Thursday.

"All of the optimism we were seeing back in November has pretty much been flushed out of the market," Gilmer said, as reported by the Houston Chronicle. "The problems we have continue to be about oil."

Gilmore was hesitant to predict oil's future price, but stressed that the proportion of energy-related jobs to non-energy jobs in the area has remained the same in 20 years, something that might surprise many Houstonians. For the past several years, the talk of the town has been about how diversified the area's economy had become; Gilmer's report dampens those claims.

Instead, he said, the area's stability has been bolstered by the nation's strong economy. "There is no structural change here," Gilmer said. "We haven't changed a thing in terms of how we're connected to oil."

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