A CHANGING MARKET
The Woodlands economy has seen changes over the past three years with health care becoming the largest area of employment among the major nonretail employers with at least 100 employees. KEY Energy Health care Education
Business & professional services
Other sectors*
EMPLOYMENT BY SECTOR
17%
20.1%
27%
22.4%
31.8%
11.2%
31.2%
8.1%
2019
2020
2021
2022
28%
16%
13.7%
30.4%
26%
10.9%
11.5%
24%
16%
17.8%
18.1%
18.8%
*Other sectors include hospitality and entertainment; chemical; banking and financial services; public agencies; transportation, warehousing and utilities; and life sciences.
SOURCE: THE WOODLANDS AREA ECONOMIC DEVELOPMENT PARTNERSHIP/COMMUNITY IMPACT NEWSPAPER
Oil and gas struggles According to Gilmer, the oil and gas industry has been hesitant to expand job offerings due to previous indus- try crashes and bankruptcies from oil prices being cut, and the recovery for the sector has been slow since the pre- vious crash in 2014. In late October, ExxonMobil announced it would relocate its employees from The Woodlands to its Houston campus based in City Place in Spring. As of the EDP’s report in February, ExxonMobil was no lon- ger among The Woodlands area’s 84 major nonretail employers. Gilmer stated this follows a trend of slow growth for the oil and gas indus- try as a whole between a credit crunch and oil prices dropping from the Orga- nization of the Petroleum Exporting Countries in 2014 as well as the coro- navirus pandemic beginning in 2020. “We have lost 75,000 jobs [in the Houston metro], and most of those will simply never come back,” Gilmer said. “We will see some returns this year. … We are seeing improved oil prices, anything above $65 [per bar- rel] is respectable, and their finances are substantially improved.” NASDAQ data indicated as of March 10 that the average crude oil price was $106.02 per barrel. Gilmer noted the conflict between Russia and Ukraine that began Feb. 23 was also affecting oil prices as 40% of the natu- ral gas that goes throughout Europe is exported fromRussia. “It is not a growth stock anymore. Now it is a value stock,” Gilmer said. “That means the rig count cannot grow as fast as it did previously.” Both Gilmer and Staley noted the
EDUCATED WORKFORCE Hiranya Nath, an economics professor at Sam Houston State University, said educated workers are needed in professional and business services, which have grown to 13% of nonfarm jobs nationwide.
just south of our community,” Staley said in a phone interview, referring to ExxonMobil moving 1,500 employ- ees to Spring in 2021. “That was a huge factor in seeing the downturn.” Following a trend that began in 2019—when energy was the largest industry in the region for major non- retail employers, or those with 100- plus employees—the energy sector dropped from the area’s third-larg- est single sector to the fourth largest in the 2022 report, according to The Woodlands EDP. Over the three-year period, the sector has decreased from making up 27% of the jobs in the area to 8.1% among major nonretail employers. Bill Gilmer, the director of the Uni- versity of Houston’s Bauer Institute for Regional Forecasting, said despite rising oil prices—which often equate to employment opportunities in the oil and gas industry—he believes the Houston region will not see a return to the same strength the industry pre- viously saw. “I would not be optimistic about big job gains or it ever returning in the foreseeable future to 2014 levels in Houston,” Gilmer said. Despite the job losses and declines in the energy sector, Staley said he is optimistic about other industries con- tinuing to grow. According to the EDP’s 2022 report, the health care, educa- tion, and professional and business services make up the top three indus- tries for employment in the area. “It is still a surprise to me in a very good way to see health care growing stronger and stronger, year after year,” Staley said. “That is unprecedented to us, and it is not going to slow down.”
increasing oil prices are not factoring into job growth for the region, which are affected by numerous conditions. Gilmer said following a previous crash in 2014, the industry shifted to a new financial model, which involves paying dividends to investors instead of diverting revenue to job growth. Hiranya Nath, an economics profes- sor at Sam Houston State University, said the disruptions from the early shutdowns with the coronavirus pan- demic in early 2020 caused the indus- try to focus on digital technology for efficiency and productivity gain, although this may have caused addi- tional slow growth. “There is a shortage of skilled workers who can facilitate adop- tion of appropriate technologies and extraction of value thereof,” Nath said. Staley noted there has been some movement from midsize oil and gas employers that may make themmajor employers in future years. GeoSouth- ern Energy, an independent oil and gas company, was among the busi- nesses that moved from a midsize employer in 2021 with 99 employees to a major employer with 136 in 2022. Patrick Jankowski, senior vice president of the Greater Houston Partnership, said midsize employ- ers are adding jobs for the Houston region as a whole but are struggling to fill openings. “The National Federation of Inde- pendent Business found that in Jan- uary, 47% of its members had job openings they could not fill,” Jankow- ski said. “The number of unfilled job openings still far exceeds the 48-year historical average of 23%.”
The Woodlands
In addition to business sectors, education and health care require higher education levels.
High school graduate or higher
97.8%
Bachelor’s degree
63.8%
Houston
High school graduate or higher
78.9%
Bachelor’s degree
32.9%
Montgomery County
High school graduate or higher
87.7%
Bachelor’s degree
34.5%
SOURCE: U.S. CENSUS BUREAU/COMMUNITY IMPACT NEWSPAPER
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The Woodlands Area Economic Development Partnership, during The Woodlands Area Chamber of Com- merce’s Annual Economic Outlook Conference on Feb. 11. The EDP pre- sented its annual report of major non- retail employers, regional economic updates and total nonretail job counts at the conference. “Amajor [energy] employer moved
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COMMUNITY IMPACT NEWSPAPER • COMMUNITYIMPACT.COM
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