By Rene Cantu
One of the things Houstonians may notice, from time to time, is low gas prices. Gas prices are often used to tell you the state of the oil and gas industry. During the pandemic’s peak, when fewer cars were on the road and oil-carrying ships were stalled in the seas, low gas prices were a clear sign that things were not good in the oil and gas sector.
Bill Gilmer is an economist and the director of the Institute for Regional Forecasting at UH’s C.T. Bauer College of Business. He is well-known in Houston for his annual economic impact reports, one of which shows how hard COVID-19 has impacted Houston.
“The local economy is driven about 60 percent by the U.S. business cycle, 30 percent by oil markets, and 10 percent by long-term factors such as demographics and the Texas growth formula,” said Gilmer about Houston’s dependency on the energy industry.
Houston’s largest economic downturn in its previous history was the 1982-87 oil bust when the metro area lost 212,000 jobs over five years. According to Gilmer, COVID and its stay-home orders precipitated a loss of 345,000 in April 2020 alone.
Gilmer’s work also teaches us how we can use economic studies to anticipate future upheaval, so that we may be better prepared to face it. His goal was for the study to “provide figures that move our understanding of how Houston will fare over the next couple of years from little to no public knowledge to a useful planning range for business.”
Image: Courtesy of UH Bauer College of Business
