GDP growth of 3% forecast this year for Houston

Houston’s economy will benefit from in-migration in 2023 and see moderate growth in a broad range of industries, but its pace of growth will continue to trail most of its Texas peer metros. Its 2022 job growth rate of 5.7% exceeded the US growth of 4.3% last year. Job growth was led by restaurants, construction, and fabricated metal manufacturing. We forecast a 2023 annual job growth rate of 2.4%, but Houston is forecast to see a job decline of 1% in the second half of 2023 before rebounding to an average annual job growth of 0.7% in 2024 through 2027, above the US forecasted rate of 0.4%.

What you will learn:

• Houston’s 2022 GDP growth rate of 3.4% ranks in the top 20 of the 50 largest metros. GDP growth was led by real estate and professional business services. We forecast annual GDP growth of 3% in 2023, which includes a GDP decline of 1% in the second half of the year. We forecast 2024-2027 annual GDP growth of 1.7%, on par with the 50-city forecasted average rate.
• Houston’s economy has often suffered from the vicissitudes of the oil sector and oil prices. Mining jobs grew 8.7% in 2022 and are forecasted to grow 4.7% in 2023 but fall 0.9%, annually, from 2024 to 2027. Proof of the energy sector’s volatility: mining GDP fell 20.4% in 2022, but we forecast average GDP growth of 7.5%, annually, in 2023 through 2027.
• Like most of Texas, Houston saw net in-migration of 95,100 in 2022. This contributed to population growth of 1.9% for the year. We forecast cumulative net in-migration of 277,200 from 2023 to 2027 and population growth of 1.4%, above the forecasted US rate of 0.5%.