Houston Economist Patrick Jankowski had one word for skeptics who believe America’s long-term economic expansion is due to head downward: “Poppycock!”
“If you take one thing away from what I’ve said today,” Jankowski said, “just remember that we’re not in danger. All of the indicators I’m mentioning today say we’re not about to fall off the edge of the cliff.”
Jankowski is the regional economist and senior vice president of research at the Greater Houston Partnership. He and District 8 Congressman Kevin Brady spoke at the Lake Houston Area Chamber’s annual Economic Outlook Luncheon Feb. 19, forecasting what to expect locally and nationally for 2019.
In defending his positive economic outlook, Jankowski quoted former Federal Reserve Economist Janet Yellen: “Expansions don’t die of old age.”
After displaying multiple headlines predicting the economy is overdue for a major correction, Jankowski pointed out that something must happen for the economy to go bad.
“Financial stress is what causes economic problems and you can see that just isn’t happening,” he said as he clicked through charts and graphs highlighting the national economy. “On the consumer side, we’ve got strong job growth, unemployment is down, unemployment insurance claims are going down, and credit card and auto delinquencies are down.”
Jankowski also pointed to the expanding economy, the rising number of housing permits, and vehicle sales. “There’s not a lot of stress that would push us into a national downturn,” he concluded.
Jankowski says the Houston economy is even better.
“Job creation is up in Houston. The rig count is up, but not to where we were. And we got back half of the jobs we lost in the oil and gas downturn,” he said, pointing to more charts and graphs. “Retail sales are moving up as good jobs are created. Home sales are up, up, up, and one of our leading indicators, purchasing managers, are expanding their purchases. That’s an excellent sign.”
Brady’s economic outlook mirrored Jankowski’s positive position.
“The new tax code I helped shepherd in the last session when I was Ways and Means chair allows us to focus on welcoming investment,” he said. “It’s very pro-growth. The signs are positive. Blue-collar growth is up. A survey from a couple weeks ago shows that seven in 10 of us believe we will improve.”
Brady also pointed to the surge of small business start-ups due to the new tax code encouraging investment.
Both speakers see challenges in continuing the positive economic growth.
“If Houston’s economy is so rosy, why am I worried?” Jankowski asked. “Crude output is up but frankly, the industry has become so efficient that many blue-collar jobs just aren’t coming back. Technology has changed everything.”
With the new tax code, Brady says the United States has incentives for companies to build and locate here but these same companies believe the workforce just won’t be available for them.
His answer is to develop a workforce including incentivizing those not working with long-term careers.
“Fortunately, here in Lake Houston, you have an excellent educational system with Humble ISD and Lone Star College,” Brady said.
He also supports creating an immigration policy that rewards immigrants for what they can do, not for who they know.
Jankowski is mostly worried about consumer and business attitude.
“We think the economy may turn downward, so we make it a self-fulfilling prophesy,” he said. “We postpone purchases and investments, so we slow down the economy.”
Jankowski had one final word about Houston’s economy, “In 2019, energy is doing well, we’re expanding, we’re adding jobs. No sector is slowing down. It’s all in our favor.”
The Economic Outlook Luncheon began with a short, colorful, informative video extolling the virtues of business in Lake Houston. The video can be seen on the chamber’s website. The luncheon was held at the Clubs of Kingwood’s completely refurbished Kingwood Clubhouse.
Teachers from Lake Houston’s public and private schools and Lone Star College – Kingwood will be honored at the Lake Houston Chamber’s annual Teachers of the Year luncheon March 26 at the Humble Civic Center.
For more information or to register, lakehouston.org.