Houston is poised to create thousands of new jobs on a twin boom, one fed by chemical plant and liquefied natural gas investments, the other as Mexico opens its doors to foreign money, according to an analysis by the Greater Houston Partnership (GHP) and HSBC Group.
"The combined impact of the massive investment in chemical plants and liquid natural gas export terminals underway on the Texas Gulf Coast, and the opening of Mexico's oil production to Houston businesses, could add more than 55,000 jobs to the region's economy, even with only a 15% increase in exports," said the authors of "Houston's Next Boom: Exporting Innovation."
"If that proves to be the case, then the export expansion about to occur is worth at least 10 months of job growth to the region's economy."
HSBC helped to fund "Made for Trade" reports for four U.S. cities, including Houston. The GHP, which represents 10 counties and more than 2,000 member organizations, represents about one-fifth of the region's workforce.
The first wave of jobs growth would be fed by "massive investment" in chemical manufacturing plants and gas (LNG) export terminals, which have benefited by "innovations in exploration, specifically directional drilling and hydraulic fracturing."
The second wave would arrive "as Mexico opens its doors to foreign investment and foreign operators for the first time in 75 years" (see Daily GPI, May 2).
"Billions will be spent to reverse Mexico's production decline, and much of that money will be spent in Houston...Simply put, Houston, the energy capital of the world, will prosper from Mexico's new open door policy."
According to the research, Houston led the nation in exports in 2012, overtaking New York and ranking ahead of Los Angeles, Detroit and Seattle. Overall, Houston's exports increased 164% to $110.3 billion in 2012 from $41.7 billion in 2005. Houston businesses now trade with more than 200 countries, led by growth in Latin America.
The Port of Houston, considered the busiest U.S. port in foreign tonnage, handled 67.2 million metric tons of cargo (exports/imports combined) in 2013, ahead of second ranked New Orleans (44.2 mmt) and third-ranked Los Angeles (31.4 mmt). Last year crude/refined products accounted for most of the trade (47%), worth around $118.4 billion, while chemicals accounted for 12.3%, or $30.9 billion.
"As Houston continues to pioneer innovations in fields as diverse as medicine, energy, chemicals and manufacturing, trade and investment will become only more central to its economy," the report stated. "Trade was at the center of the city's development, and recent trends suggest it will be at the center of Houston's future as well."