Construction Sharply Down in Houston; 16,000 Job Losses Predicted for This Year in Sector

HOUSTON — Last year saw the launch of myriad residential projects in the Houston area, including luxury buildings with penthouses going for upwards of $3 million. A few of those projects have been halted, but most are either completed or under way, and cranes and construction crews are busy at many sites around the city.

Not all is bright, however, in the construction sector in Houston. Dodge Data & Analytics has released a report indicating that construction starts in November of 2016 totaled $776.7 million, a decline of 40 percent from the same period in 2015. Nonresidential construction starts fell by a whopping 74 percent.

Of course, this will affect the Houston area's employment numbers. The Greater Houston Partnership forecasts a loss of 16,000 jobs in the construction sector in 2017.

In its 2017 Houston Employment Forecast, the agency had this to say about the sector: "Houston has enjoyed a five-year construction boom. More than $90 billion in commercial, industrial and residential contracts have been awarded since January ’11. Construction has helped offset weakness in Houston’s economy after the energy industry collapsed. But that won’t be the case in ’17. In a reversal of roles, construction will be a drag on Houston next year."

The darkest spot is office space, according to the Partnership:

"The office market is grossly overbuilt. More than 33 million square feet of direct space and another 12 million square feet of sublease was available in Q3/16. The effective vacancy rate exceeds 20 percent. A rate reflecting a balanced market would be in the low teens. Without significant job growth, that space will sit
empty for years."

In total, the Partnership forecasts that the Houston area will see a creation of 29,700 jobs net in 2017.

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