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A publication of the Greater Houston Partnership

Volume 22, Number 1 January 2013

Houstons Big Three Three factors have guided Houstons economy in recent years energy prices, the value of the dollar against foreign currencies, and the health of the U.S. economy. This issue of Glance explores the impact each currently has on the region. Energy Prices: Oil prices held strong in 12, but ENERGYPRICESIN'12 natural gas prices remained weak. The spot CrudeOil NaturalGas price for West Texas Intermediate, the U.S. $/bbl(1) $/mcf(2) benchmark for light, sweet crude, closed at High $109.39 $3.77 $77.72 $1.82 $91.83 a barrel on the last trading day of the Low 1YrAverage $94.04 $2.75 year, down $9.99 from where it started the year $86.02 $4.78 but significantly above the one-year and five- 5YrAverage year averages. Natural gas at the Henry Hub 1WestTexasIntermediate2HenryHub closed at $3.43 per thousand cubic feet (mcf) on Source:U.S.EnergyInformationAdministration the last trading day of 12, up 46 cents from where it started the year and above the oneyear average but well below the five-year average. Crude prices had enough muscle NORTHAMERICANDRILLINGRIGCOUNT to support an increase in oil- Weekof... OilRigs GasRigs Other Total directed drilling in 12, but natu- 1/6/2012 1,191 811 5 2,007 ral gas prices sapped some of the 12/28/2012 1,327 431 5 1,763 industrys strength. The number Change +136 380 0 244 of rigs drilling for oil rose Source:BakerHughes,Inc. through mid-summer, peaking at 1,432 in early August but began to taper off in the fall. The number of rigs looking for natural gas fell steadily throughout 12. The year finished with 244 fewer total rigs working in North America than when it started. It began with 60 percent of all working rigs in North America drilling for oil and 40 percent for natural gas. By December, 75 percent of all rigs were drilling for oil and 25 percent for gas. The slip in the rig count has slowed growth in energy employment. In January, employment in oil and gas extraction grew at an 8.7 percent annual rate, hit a high of 11.1 percent in May, and by November, the latest month for which data is available, the rate had slipped to 6.2 percent. Likewise, employment in oil field services grew at a 12.4 percent annual rate last January. By November, the rate settled in at 3.6 percent. While those rates represent slower growth for the energy industry, the rates remain above the 3.2 perJanuary 2013 2012, Greater Houston Partnership Page 1

HOUSTONTHE ECONOMY AT A GLANCE cent overall employment growth rate for the region. The slower pace does suggest energy will not be as strong of an economic driver in 13 as it was in 12. The U.S. Energy Information AdministraPRIVATESECTORFORECASTS tion forecasts WTI to average $88.38 and WTI$/bbl'13 Henry Hub gas to average $3.79 in 13. Pri- CreditSuisse $102.75 vate sector forecasts are more bullish for oil GoldmanSachs $101.00 $96.00 prices, but not for natural gas. Theres just JPMorgan $90.00 too much natural gas in inventory for prices BankofAmerica to improve substantially. Stronger U.S. eco- Source:Variousbankforecasts nomic growth, a harsh winter, a hot summer, and reduced production are needed to cut inventory and drive up prices. EIA estimates there is 3.5 billion cubic feet of natural gas in storage, 12.4 percent above the five-year average for the month of January. The price of WTI will improve once the industrys ability to transport oil catches up with its ability to produce it. Much of the nations crude passes through Cushing, Oklahoma, the delivery point for oil traded on the New York Mercantile Exchange. Many Midwestern refineries now source their crude directly from Canada and North Dakota creating a glut in Cushing. The glut has forced the industry to expand their tank farms there and inventories in Cushing have more than doubled in recent years. More pipeline capacity is needed to siphon off that glut. The nations pipeline network is primarily designed to move crude from Texas to the Midwest, not the other way around. In May, Enterprise Products Partners and Enbridge reversed the flow of the Seaway Pipeline, allowing oil to flow from the bottlenecked Cushing to the refinery complex along the Gulf Coast near Houston. The line moves 150,000 barrels per day and with modification underway should reach 400,000 barrels per day this year. A twin pipeline on the existing right-of-way is under construction and expected to increase Seaway's capacity to 850,000 barrels per day by early 14. Other pipelines have been proposed or are under construction, including the highly publicized Keystone Pipeline, which will connect Canada to Cushing with an extension to Houston. Until these pipelines are built, the glut in Cushing will continue to depress WTI prices. How much has the Cushing bottleneck depressed prices? The spread between WTI and Brent crude, a blend of North Sea oils used to benchmark two-thirds of the worlds oil, provides some insight. Prior to September 10, the difference between WTI and Brent averaged $3 per barrel. This year started with Brent trading at $112.98 compared to $93.14 for WTI. Obviously, other factors play a role in the price differentialexchange rates, local supply disruptions, geopoliticsbut the spread does suggest the penalty on WTI due to U.S. transportation constraints.

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HOUSTONTHE ECONOMY AT A GLANCE

TradeWeightedU.S.DollarIndex
MajorCurrencies
90 85 March'73Value=100 80 75 70 65 60 55 50
Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13

Value of the Dollar: The value of the U.S. dollar against major currencies ended the year unchanged from where it started the year and 7.5 percent below where it stood four years ago, according to data provided by the Federal Reserve Bank of St. Louis. The weaker dollar is important because it makes the goods and services Houston sells overseas more affordable.

Between 09, the bottom of the recession in Houston, and 11, the year Houston recovered, exports through the Houston-Galveston Customs District grew $44.1 billion or 58.7 percent, according to the U.S. Census Bureau. Houston benefits from the traffic, but not all goods shipped via Houston originate here. The International Trade Administration (ITA), with help from the Census Bureau, tracks the value of goods that originate from each metro area. Between 09 and 11, exports of goods manufactured in Houston grew $38.6 billion, or 58.7 percent, according to the ITA1. This does not include the value of services, i.e., engineering, design, construction management, IT consulting, that Houston firms sell overseas. Data on the export of services is scare at even the national level, but the Partnership has identified approximately 1,500 Houston service companies doing business overseas, companies which also benefit from a weak U.S. currency.
Source:FederalReserveBankofSt.Louis

So whats the outlook for the dollar? Three times a year, the National Association for Business Economics (NABE) surveys several dozen prominent economists seeking their insights into the direction of the U.S. economy. The consensus from the December 12 survey is that the trade-weighted value of the dollar will remain unchanged in 13. That consensus has held constant for the past three NABE surveys. Given that outlook, Houstons export-oriented industries should do well this year.

CountriesintheTrade WeightedU.S.DollarIndex Argentina,Australia,Brazil, Canada,Chile,China,Colombia, Europe(Eurocountries),Hong Kong,India,Indonesia,Israel, Japan,SouthKorea,Malaysia, Mexico,Philippines,Russia, SaudiArabia,Singapore,Swe den,Switzerland,Taiwan, Thailand,UnitedKingdomand Venezuela

Health of the U.S. Economy: The U.S. economy has improved over the past three years. From the lowest point during the recession, housing starts are up 80.1 percent, auto sales up 71.6 percent, real retail sales2 up 11.4 percent,
Some goods produced here actually leave via ports other than Houston. Adjusted for growth due to inflation January 2013 2012, Greater Houston Partnership
2 1

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HOUSTONTHE ECONOMY AT A GLANCE initial claims for unemployment insurance are down 45.4 percent and the U.S. unemployment rate has fallen from a high of 10.0 percent to a low 7.8 percent in December. The nation has also created 4.8 million jobs over the past three years, though still 4.0 million short of the previous employment peak. SELECTEDU.S.ECONOMICINDICATORS
Nonfarm Employment1 CivilianUnem ploymentRate1 InitialClaims ForUnempIns2 Industrial Production3 SingleFamily HousingStarts4 Autos&Light TruckSales4 QuarterlyReal RetailSales5
Recent Peak Date Recession Trough Date Current Level Date Improvement SinceTrough

138.0 million 4.4% 302,000 100.7 1.495 million 16.705 million $178.8 billion

Jan08 Mar07 May07 Dec07 Mar07 Feb07 Q2/07

129.2 million 10.0% 659,250 83.4 478,000 9.021 million $159.2 billion

Feb10 Oct09 Mar09 Jun09 Apr09 Feb09 Q2/09

134.0 million 7.8% 359,750 97.5 861,000 15.481 million $177.3 billion

Dec12 Dec12 Dec12 Nov12 Nov12 Nov12 Q2/12

4.8
million

2.2% 299,500 14.1 383,000 6.460


million

$18.1 billion

(1)SeasonallyAdjusted(2)SeasonallyAdjusted4WeekMovingAverage(3)07=100(4)SeasonallyAdjustedAnnualRate (5)AdjustedforInflation Sources:U.S.BureauofLaborStatistics,U.S.DepartmentofLaborEmploymentandTrainingAdministration,BoardofGov ernorsFederalReserveSystem;U.S.CensusBureau,U.S.BureauofEconomicAnalysis,FederalReserveBankofSt.Louis.

Recent reports on U.S. gross domestic product (GDP) reflect an improving economy. Real GDP (i.e. growth once inflation has been factored out) increased at an annual rate of 3.1 percent in the third quarter of 12, up from a tepid 1.3 percent rate in the second quarter. GDP growth is important to Houston for two reasons. First, Houston does not exist in a bubble. The metro is part of the United States (though we would sometimes rather not admit it). Second, strong GDP growth translates into healthy demand for Houstons key products and servicesenergy, chemicals, plastics, industrial equipment, engineering, and health care. Houston receives an additional stimulus to its economy when U.S. GDP grows at a 3.0 percent or better annual rate. Slower growth doesnt signify a downturn for Houston. Slower growth means that Houston must rely on the other drivers energy and foreign tradeto create jobs in the region, which has been the case the past three years. Most forecasters expect the uncertainty over U.S. fiscal policy to limit growth in the first half of 13. If Congress makes significant progress by mid-year toward resolving the
January 2013 2012, Greater Houston Partnership Page 4

HOUSTONTHE ECONOMY AT A GLANCE challenges, GDP growth should pick up. The consensus among NABE economists is for real GDP growth to reach 3.0 percent by the fourth quarter of 13.3

HoustonAirportSystemPassengerVolume NovemberYTDComparisons
50 #ofPassengers,millions 45 40 35 30

25 Air Traffic Update 20 The Houston Airport 15 System (HAS) handled 10 46.17 million passengers 5 through the first eleven 0 months of this year, a 1.0 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 percent increase from the International Domestic 45.72 million handled Source: HoustonAirportSystem over the same time last year. This is the strongest January-to-November performance since the recession began in the fall of 08. International traffic rose 1.9 percent to 8.02 million passengers, up from 7.87 million travelers compared to the first eleven months 11. Domestic traffic grew 0.8 percent to 38.15 million passengers, up from 37.85 million passengers over the same period in 11.

During the first eleven months of 12, three out of four domestic passengers handled by HAS passed through George Bush Intercontinental Airport (IAH). While IAH handled the majority of domestic travel, activity at William P. Hobby Airport (HOU) was responsible for all domestic passenger growth. International traffic accounted for 17.4 percent of total HAS passenger traffic but a third of total passenger growth. Most of the growth occurred in travel between Houston and Asia, Africa and Australia. Foreign Trade Update More than $231.6 billion in foreign trade passed through the Houston-Galveston Customs District in the first 10 months of 12, a 4.8 percent increase from $221.1 billion handled during the same period in 11. Exports totaled $104.8 billion from January through October 12, up 7.6 percent from $97.5 billion the previous year. Imports totaled $126.7 billion through Oct, a 2.5 percent increase from the same period in 11. From January through October 12, exports totaled $104.8 billion. Five commodities accounted for 75.2 percent of all exports through the district: mineral fuel and oil ($38.5 billion), industrial machinery ($15.5 billion), organic chemicals ($14.0 billion), plastics ($5.7 billion) and electric machinery ($5.0 billion).
3

A summary of the most recent NABE forecast can be found at http://nabe.com/outlook/Dec_2012_NABE_Outlook. 2012, Greater Houston Partnership Page 5

January 2013

HOUSTONTHE ECONOMY AT A GLANCE Imports totaled $126.7 billion in the first ten months of 12, up 2.5 percent from $123.6 billion a year earlier. Five commodities accounted for 79.9 percent of all imports through the district: mineral fuel and oil ($73.9 billion), industrial machinery ($8.9 billion) articles of iron and steel ($8.7 billion), electric machinery ($5.7 billion) and organic chemicals ($3.9 billion). Employment Update The Houston-Sugar Land-Baytown Metropolitan Statistical Area added 85,300 net new jobs, a 3.2 percent annual increase, in the 12 months ending November 12, according to data released in December by the Texas Workforce Commission. The private sector added 86,600 jobs, a 3.8 percent annual increase, during the same time frame. Houston continues to lead the states economy, with no other metro adding as many jobs.
ChangeinNonfarmPayrollEmployment,TexasMetros Nov11Nov12
Metro Jobs Added % Change Houston 85,300 3.2 Dallas-Ft Worth 72,600 2.5 Austin 35,300 4.4 San Antonio 21,000 2.5 El Paso 4,600 1.6 Odessa 4,000 5.9 Corpus Christi 3,500 1.9 Killeen-Temple 2,600 2.0 Waco 2,600 2.5 Texarkana 2,500 4.3 Midland 2,400 3.2 Tyler 2,100 2.2 Abilene 2,000 3.1 Source: Texas Workforce Commission Metro Amarillo Beaumont Longview Wichita Falls Sherman San Angelo Victoria McAllen Laredo College Station Lubbock Brownsville Jobs Added 1,800 1,600 1,200 1,200 700 600 100 0 -400 -1,200 -2,000 -3,200 % Change 1.6 1.0 1.2 2.1 1.6 1.3 0.2 0.0 -0.4 -1.2 -1.5 -2.5

Houston's November unemployment rate was 5.8 percent, down from 7.3 percent in November 11. Texas' unemployment rate was 5.8 percent, decreasing from 7.2 percent in November 11. The U.S. rate was 7.4 percent, a drop from 8.2 percent the past November. This is the lowest unemployment rate for Houston, Texas and the nation since December 08. The rates are not seasonally adjusted.
Patrick Jankowski, Jenny Philip and Pooja Patel contributed to this issue of Houston: The Economy at a Glance

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HOUSTONTHE ECONOMY AT A GLANCE

STAY UP TO DATE!

Are you a Partnership Member? If so, log in to your account here and access archived issues of Glance available only to members. You can also sign-up RSS feeds to receive Houstons latest economic data throughout the month. If you are a non-member and would like to receive this electronic publication on the first working day of each month, please email your request for Economy at a Glance to dmorrow@houston.org. Include your name, title and phone number and your companys name and address. For information about joining the Greater Houston Partnership and gaining access to this powerful resource, call Member Services at 713-844-3683. The Key Economic Indicators table is updated whenever any data change typically, 11 or so times per month. If you would like to receive those updates by e-mail, usually accompanied by commentary, please email your request for Key Economic Indicators to dmorrow@houston.org with the same identifying information. You may request Glance and Indicators in the same email.

January 2013

2012, Greater Houston Partnership

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HOUSTONTHE ECONOMY AT A GLANCE


Houston Economic Indicators A Service of the Greater Houston Partnership Month ENERGY U.S. Active Rotary Rigs Spot Crude Oil Price ($/bbl, West Texas Intermediate) Spot Natural Gas ($/MMBtu, Henry Hub) UTILITIES AND PRODUCTION Houston Purchasing Managers Index Nonresidential Electric Current Sales (Mwh, CNP Service Area) CONSTRUCTION Total Building Contracts ($, Houston MSA) Nonresidential Residential Building Permits ($, City of Houston) Nonresidential New Nonresidential Nonresidential Additions/Alterations/Conversions Residential New Residential Residential Additions/Alterations/Conversions Multiple Listing Service (MLS) Activity Closings Median Sales Price - SF Detached Active Listings EMPLOYMENT (Houston-Sugar Land-Baytown MSA) Nonfarm Payroll Employment Goods Producing (Natural Resources/Mining/Const/Mfg) Service Providing Unemployment Rate (%) - Not Seasonally Adjusted Houston-Sugar Land-Baytown MSA Texas U.S. FOREIGN TRADE (Houston-Galveston Customs District) Port of Houston Authority Shipments (Short Tons) Air Passengers (Houston Airport System) Domestic Passengers International Passengers Landings and Takeoffs Air Freight (metric tons) Enplaned Deplaned CONSUMERS New Car and Truck Sales (Units, Houston MSA) Cars Trucks, SUVs and Commercials Total Retail Sales ($000,000, Houston MSA, NAICS Basis) Consumer Price Index for All Urban Consumers ('82-'84=100) Houston-Galveston-Brazoria CMSA United States Hotel Performance (Harris County) Occupancy (%) Average Room Rate ($) Revenue Per Available Room ($) POSTINGS AND FORECLOSURES Postings (Harris County) Foreclosures (Harris County) Dec '12 Dec '12 Dec '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 Nov '12 2Q12 Nov '12 Nov '12 3Q12 3Q12 3Q12 Dec '12 Dec '12 MONTHLY DATA Most Recent 1,784 87.86 3.34 54.6 4,209,166 796,169,000 256,836,000 539,333,000 493,549,879 224,128,211 72,956,012 151,172,199 269,421,668 246,308,515 23,113,153 5,891 167,000 37,909 2,728,200 520,100 2,208,100 5.8 5.8 7.4 3,584,946 4,053,579 3,401,426 652,153 64,788 35,707 17,941 17,766 18,760 8,051 10,709 25,809 204.139 230.221 64.3 90.09 57.90 2,061 678 Year % Earlier Change 2,003 98.56 3.17 61.6 4,083,403 607,897,000 190,525,000 417,372,000 311,260,200 239,101,648 95,781,160 143,320,488 72,158,552 54,382,941 17,775,611 4,607 154,500 46,674 2,642,900 492,900 2,150,000 7.3 7.2 8.2 3,414,188 4,064,699 3,429,676 635,023 68,148 35,470 18,456 17,014 20,669 8,324 12,345 24,595 201.398 226.23 58.1 86.25 50.11 4,338 1,169 5.0 -0.3 -0.8 2.7 -4.9 0.7 -2.8 4.4 -9.2 -3.3 -13.3 4.9 1.4 1.8 -10.9 -10.9 5.4 -11.4 3.1 31.0 34.8 29.2 58.6 -6.3 -23.8 5.5 273.4 352.9 30.0 27.9 8.1 -18.8 3.2 5.5 2.7 YEAR-TO-DATE TOTAL or YTD AVERAGE* Most Recent 1,916 * 94.05 * 2.75 * 58.9 * 47,199,764 9,868,636,000 3,401,286,000 6,467,350,000 4,499,025,092 2,823,238,877 1,176,203,989 1,647,034,888 1,675,786,215 1,446,496,425 229,289,790 68,627 161,891 * 41,128 * 2,677,637 * 507,882 * 2,169,755 * 6.9 * 6.9 * 8.1 * 40,335,210 46,172,301 38,153,911 8,018,390 748,832 384,034 198,636 185,398 299,632 132,261 167,371 50,442 204.478 * 229.593 * 66.5 * 94.22 * 62.68 * 34,730 9,993 Year % Earlier Change 1,879 * 94.88 * 4.00 * 60.3 * 47,510,401 8,177,220,000 3,289,722,000 4,887,498,000 3,322,047,855 2,234,317,946 957,519,171 1,276,798,775 1,087,729,909 891,927,467 195,802,442 58,225 153,038 * 49,411 * 2,588,273 * 485,673 * 2,102,600 * 8.3 * 8.1 * 8.9 * 38,960,537 45,719,636 37,850,597 7,869,039 784,821 386,749 198,973 187,776 235,010 99,453 135,557 46,984 200.454 * 224.873 * 60.5 * 91.24 * 55.28 * 43,832 11,092 3.5 1.0 0.8 1.9 -4.6 -0.7 -0.2 -1.3 27.5 33.0 23.5 7.4 2.0 2.1 2.0 -0.9 -31.3 -2.3 -0.7 20.7 3.4 32.3 35.4 26.4 22.8 29.0 54.1 62.2 17.1 17.9 5.8 -16.8 3.5 4.6 3.2

4.5 15.5 -52.5 -42.0

3.3 13.4 -20.8 -9.9

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HOUSTONTHE ECONOMY AT A GLANCE


Sources Rig Count Spot WTI, Spot Natural Gas Houston Purchasing Managers Index Electricity Building Construction Contracts City of Houston Building Permits MLS Data Employment, Unemployment

Baker Hughes Incorporated U.S. Energy Information Admin. National Association of Purchasing Management Houston, Inc. CenterPoint Energy McGraw-Hill Construction Building Permit Department, City of Houston Houston Association of Realtors Texas Workforce Commission

Port Shipments Aviation Car and Truck Sales Retail Sales Consumer Price Index Hotels Postings, Foreclosures

Port of Houston Authority Aviation Department, City of Houston TexAuto Facts Report, InfoNation, Inc., Sugar Land TX Texas Comptrollers Office U.S. Bureau of Labor Statistics PKF Consulting/Hospitality Asset Advisors International Foreclosure Information & Listing Service

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HOUSTONTHE ECONOMY AT A GLANCE


HOUSTON MSA NONFARM PAYROLL EMPLOYMENT (000)
Nov '12 Total Nonfarm Payroll Jobs Total Private Goods Producing Service Providing Private Service Providing Mining and Logging Oil & Gas Extraction Support Activities for Mining Construction Manufacturing Durable Goods Manufacturing Nondurable Goods Manufacturing Wholesale Trade Retail Trade Transportation, Warehousing and Utilities Utilities Air Transportation Truck Transportation Pipeline Transportation Information Telecommunications Finance & Insurance Real Estate & Rental and Leasing Professional & Business Services Professional, Scientific & Technical Services Legal Services Accounting, Tax Preparation, Bookkeeping Architectural, Engineering & Related Services Computer Systems Design & Related Services Admin & Support/Waste Mgt & Remediation Administrative & Support Services Employment Services Educational Services Health Care & Social Assistance Arts, Entertainment & Recreation Accommodation & Food Services Other Services Government Federal Government State Government State Government Educational Services Local Government Local Government Educational Services SOURCE: Texas Workforce Commission 2,728.2 2,352.5 520.1 2,208.1 1,832.4 96.5 53.3 40.8 185.9 237.7 161.0 76.7 142.3 289.7 127.4 17.3 19.2 23.7 10.8 31.4 15.7 91.8 48.8 384.7 182.6 23.3 17.1 59.6 26.9 181.1 171.1 80.0 44.6 306.8 27.6 236.3 101.0 375.7 27.2 73.9 40.1 274.6 193.8 Oct '12 2,717.0 2,343.6 521.8 2,195.2 1,821.8 96.0 53.0 40.7 189.5 236.3 159.2 77.1 141.7 278.2 126.4 17.4 19.2 23.7 10.7 31.4 15.6 92.8 48.9 388.4 185.7 23.4 16.9 60.7 27.2 181.4 170.8 78.9 44.6 304.9 27.5 236.1 100.9 373.4 27.4 73.7 39.9 272.3 191.4 Nov '11 2,642.9 2,265.9 492.9 2,150.0 1,773.0 91.9 50.2 39.4 170.6 230.4 152.7 77.7 137.0 280.7 122.3 16.4 19.7 22.5 10.5 31.5 15.9 90.7 48.8 388.5 187.8 23.3 17.5 63.4 25.8 179.5 169.8 72.5 44.3 285.8 25.7 222.2 95.5 377.0 27.5 72.8 39.9 276.7 193.7 Change from Oct '12 Nov '11 11.2 8.9 -1.7 12.9 10.6 0.5 0.3 0.1 -3.6 1.4 1.8 -0.4 0.6 11.5 1.0 -0.1 0.0 0.0 0.1 0.0 0.1 -1.0 -0.1 -3.7 -3.1 -0.1 0.2 -1.1 -0.3 -0.3 0.3 1.1 0.0 1.9 0.1 0.2 0.1 2.3 -0.2 0.2 0.2 2.3 2.4 85.3 86.6 27.2 58.1 59.4 4.6 3.1 1.4 15.3 7.3 8.3 -1.0 5.3 9.0 5.1 0.9 -0.5 1.2 0.3 -0.1 -0.2 1.1 0.0 -3.8 -5.2 0.0 -0.4 -3.8 1.1 1.6 1.3 7.5 0.3 21.0 1.9 14.1 5.5 -1.3 -0.3 1.1 0.2 -2.1 0.1 % Change from Oct '12 Nov '11 0.4 0.4 -0.3 0.6 0.6 0.5 0.6 0.2 -1.9 0.6 1.1 -0.5 0.4 4.1 0.8 -0.6 0.0 0.0 0.9 0.0 0.6 -1.1 -0.2 -1.0 -1.7 -0.4 1.2 -1.8 -1.1 -0.2 0.2 1.4 0.0 0.6 0.4 0.1 0.1 0.6 -0.7 0.3 0.5 0.8 1.3 3.2 3.8 5.5 2.7 3.4 5.0 6.2 3.6 9.0 3.2 5.4 -1.3 3.9 3.2 4.2 5.5 -2.5 5.3 2.9 -0.3 -1.3 1.2 0.0 -1.0 -2.8 0.0 -2.3 -6.0 4.3 0.9 0.8 10.3 0.7 7.3 7.4 6.3 5.8 -0.3 -1.1 1.5 0.5 -0.8 0.1

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HOUSTONTHE ECONOMY AT A GLANCE

PURCHASING MANAGERS INDEX


HOUSTON & U.S. 2002-2012

70

65

60

55

50

45

40

35

30 Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09
U.S.

Jan-10

Jan-11

Jan-12

Jan-13

HOUSTON

Source: National Association for Purchasing Management - Houston, Inc.

HOUSTON MSA EMPLOYMENT


2002-2012
2,800 2,750 2,700 2,650 NONFARM PAYROLL EMPLOYMENT (000) 2,600 2,550 2,500 2,450 2,400 20 2,350 2,300 2,250 2,200 2,150 2,100 2,050 2,000 1,950 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 JOBS Jan-10 Jan-11 Jan-12 -80 -100 -120 Jan-13 0 -20 -40 -60 100 80 12-MONTH CHANGE (000) 60 40 160 140 120

12-MONTH CHANGE

Source: Texas Workforce Commission

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HOUSTONTHE ECONOMY AT A GLANCE


GOODS-PRODUCING AND SERVICE-PROVIDING EMPLOYMENT
HOUSTON MSA 2002-2012
550 540 530 520 2,250 2,200 2,150 2,100 2,050 2,000 500 1,950 490 1,900 480 1,850 470 460 450 440 430 Jan-02 1,800 1,750 1,700 1,650 1,600 Jan-13

GOODS-PRODUCING (000)

510

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

GOODS-PRODUCING JOBS

SERVICE-PROVIDING JOBS

Source: Texas Workforce Commission

UNEMPLOYMENT RATE
HOUSTON & U.S. 2002-2012
11 10 9 8

PERCENT OF LABOR FORCE

7 6 5

4 3 2 1

0 Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07
HOUSTON

Jan-08
U.S.

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Source: Texas Workforce Commission

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SERVICE-PROVIDING (000)

HOUSTONTHE ECONOMY AT A GLANCE

SPOT MARKET ENERGY PRICES


2002-2012
140 28

120

24

100

20

80

16

60

12

40

20

0 Jan-02

Jan-03

Jan-04
WTI Monthly

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11
GAS 12-MO AVG

Jan-12

0 Jan-13

WTI 12-MO AVG

GAS MONTHLY

Source: U.S. Energy Information Administration

INFLATION: 12-MONTH CHANGE


2002-2012
6%

5%

4%

3%

2%

1%

0%

-1%

-2%

-3% Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09
U.S. CPI-U

Jan-10

Jan-11

Jan-12

Jan-13

HOUSTON CPI-U

Source: U.S. Bureau of Labor Statistics

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HENRY HUB NATURAL GAS ($/MMBTU)

WEST TEXAS INTERMEDIATE ($/BBL)