Houston is Booming — It’s Not Only the Weather That’s Hot Down Here
“Texas is a land of buccaneering capitalism.”- The Economist, 12/19/02
In addition to having a low cost of living and a great quality of life, Texas has one of the nation’s most favorable business environments.
By 2030 the U.S. Census Bureau projects Texas population will increase by 60 percent compared with 2000 and will be one of the three other states that account for nearly one-half of total U.S. population growth between 2000 and 2030.
So……..with all the environmental infrastructure in place, it’s not surprising that we’re off to a running start. Noted in New York Times article last week, Houston is experiencing its strongest resurgence in more than 20 years. The article cites energy, real estate development, and real estate investment as leading the way for the boom. There are, however, many other drivers contributing to the diverse economic health of Houston.
The international trade and logistics sector is trucking along in the speed zone and will not be putting on the brakes anytime soon. Increasing trade, Houston’s Foreign Trade Zone, and the city’s Gulf Coast expansion of port terminal facilities has set the stage for continued growth for import export activities. Texas Foreign Trade Zones (FTZ) led the nation with over $4.7 billion in exports in 2004 and ranked first in the nation for FTZ employment. The Feb 2007 Monster.com Index showed a greater number of online opportunities for transportation and material moving occupations in Houston shipping hubs compared to the same month a year ago, reflecting strong international trade and commerce.
The Manufacturing Industry in Houston has seen a marked increase in activity that mirrors the overall manufacturing growth in Texas. This according to a survey conducted by the Federal Reserve Bank of Dallas in January 2007.
Houston also has a thriving Software Development community supported heavily by the financial, biomedical, and energy industries. We have a burgeoning tech start up community powered by a favorable business climate.There is no scarcity of programming talent in Houston, either. With Rice University and the University of Houston in the city limits and Texas A&M University a mere 90 miles away, the market gets pumped full of eager developers at the end of every semester.
Internet Technology is large in Houston as well. With such a great source of software developers as employment candidates, no wonder I.T. companies such as The Planet, the world’s largest privately held dedicated hosting company, move their headquarters to Houston.
Texas’ business friendly slogan, “Open for Business,” and its commitment to investing in research is reeling in the Biotech Industry and is encouraging Alternative Energy Development as well. With more than 400 public research centers scattered throughout the state, it has a formidable scientific research base. Most notable is the Texas Medical Center in Houston, the world’s largest medical complex.
Physicians are flocking to Texas, thanks to the 2003 tort reform that limits malpractice lawsuit awards. This is boosting the Healthcare-Related Sector in Houston. Each doctor is like a small business, needing staff, suppliers and professional services. The Texas Medical Association estimates that each new doctor would employ five people and contribute $600,000 a year to the economy. With the current population growing and projected population growth into the future, an increased number of physicians and health-related services and supporting technology will be necessary to the community, especially since the baby-boomers are getting to the age that require such services.
Banking Institutions and other service-oriented businesses are and will continue expanding to Houston as corporations relocate to the Houston area and the population swells.
Monster.com, the leading online global careers network, reports (Feb 2007) that “Houston continues to lead all Index markets with its 15-point rise in jobs year over year, and the fact that the increase has been broadbased across occupations is an encouraging testament to the diversification of the local economy.” Job growth and population growth are strong in Houston and together are key indicators for its robust economic future and small business marketplace.
Investors and developers will continue to add Texas real estate assets to their portfolios. In addition, Houston is already experiencing a high level of business transfer activity of privately-held small businesses as reported by Houston area business brokers. Small businesses will continue to be valuable commodities for the foreseeable future as individuals, private equity groups, corporations, and Business Owners from other countries look to Houston, and Texas in general, to buy existing businesses in order to take part in its expanding economy.