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IRF Releases Updated Economic Forecast for HoustonMetro Area Population to Exceed 8 Million People by 2035
On Wednesday (April 7), the Institute for Regional Forecasting (IRF) released its annual long-term forecast for the eight county Houston Consolidated Metropolitan Statistical Area (CMSA). This forecast is presented in its entirety in the IRF's DATABook -Houston, a monthly publication. Barton Smith, professor of economics and director of the institute said, "While economic growth has recently been stunted by the national and global recessions, Houston will continue to expand over the long term, adding nearly 1.5 million jobs in the next 25 years and 3.7 million people.
"CMSA employment and population, which are now over 2.5 million and 5.1 million, respectively, will increase to 3.2 million and 7.4 million by 2020. That implies a growth rate of approximately 2.5 percent per year, the best full decade performance since the 1970s."
By 2035, the IRF estimates that employment will have reached four million and population will have soared to 9.5 million. Smith adds, "While the growth rate will decline during the subsequent 15 years to around 1.5 percent, it will be mostly due to sheer city size as the negative effects of ‘city bigness' take its toll on overall growth."
The IRF report also shows that the decentralization of Houston will continue with suburban counties capturing a greater and greater share of this new job and population growth. Most recently the suburban counties have been capturing about 44 percent of all employment growth and 51 percent of all population growth. "This trend will continue well into the future," Smith says, noting that by 2035 the suburban counties will be capturing 63 percent of all new jobs and 78 percent of all new population.
While the IRF's DATABook-Houston contains detailed forecasts by county, the explanation of what will be driving this growth will be covered at its annual Economics and Real Estate Symposium to be held at the Hyatt Regency Hotel on May 6. Smith did comment, however, that the same drivers that have been instrumental in Houston's growth since the energy-bust of the 1980s will continue to be present, including Houston's strategic international transportation capabilities, its low costs for both households and businesses, and those occasional spurts in the energy economy. Diversification in the regional economy is also expected to continue but not at the rapid pace of the 1990s.
Such growth is not necessarily all good news, Smith points out. "The challenges of accommodating this growth over the next 25 years will be enormous. We can let the current recession blind us to the future needs of this community like we did after the energy bust of the 80s. Back then, too many policy makers assumed that Houston was dead, never to thrive again. As a consequence, we were ill-prepared for the growth that came in the 1990s, renewing the region's congestion problems and pushing the existing infrastructure to the limits. The suburban counties can't allow themselves to get overwhelmed by the growth that is coming their way or they will lose the quality of life that they now cherish."
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