Houston added 118,700 net jobs during

A publication of the Greater Houston Partnership Volume 22, Number 4 April 2013 Catch Us If You Can The Houston metro area continues to set the pace for job growth in the nation, recording a 4.5 percent increase in employment from February 12 to February 13, according to data released by the U.S. Bureau of Labor Statistics (BLS). That s three times the pace of job growth for the nation as a whole and faster than any other major metro. BLS reports employment data for 372 metro areas. Only 10 other metros reported faster growth than Houston, but they were all significantly smaller. Provo, UT, the most populous of the 10, reported job growth of 5.4 percent, which translates to 10,100 jobs over the past year, or about as many as Houston created in an average month. 20 MOST POPULOUS U.S. METROS Ranked By Percent Change in Employment February 12 - February 13 Metro Area Jobs Added % Change Houston 118,700 4.5 Dallas-Fort Worth 108,900 3.7 San Francisco 59,400 3.1 Tampa 33,200 2.9 Seattle 46,400 2.8 Atlanta 57,800 2.5 San Diego 31,400 2.5 Los Angeles 124,600 2.4 Riverside 27,500 2.4 Phoenix 41,500 2.4 Minneapolis 41,100 2.4 Baltimore 30,300 2.3 Boston 41,600 1.7 Miami 36,600 1.6 New York 110,000 1.3 Chicago 55,400 1.3 Washington 39,700 1.3 Philadelphia 26,300 1.0 Detroit 10,500 0.6 St. Louis 6,900 0.5 Houston added 118,700 net jobs during Source: U.S. Bureau of Labor Statistics the 12 months ending February 12. Only the Los Angeles metro, with twice the population of Houston, created more. Los Angeles, however, remains 325,000 jobs below its pre-recession peak. At its current pace, Los Angeles won t recoup all the jobs it lost in the recession until the fall of 15. Houston returned to its previous peak in the fall of 11. Since January 10, the month the recession ended here, Houston has created 276,900 new jobs, 180.9 percent of what the region lost. At the current pace of growth, Houston area employment will top 2.8 million before the end of the year. In February, Houston s unemployment rate (not seasonally adjusted) stood at 6.3 percent, nearly two points below the U.S. unadjusted rate of 8.1 percent. Houston s unemployment rate historically ticks up in January and February as temporary workers hired for the holiday shopping season are laid off. If history repeats itself and the unemployment rate falls by half a percentage point or more in the coming months, Houston could soon see unemployment below six percent. April 2013 2013, Greater Houston Partnership Page 1

Who s #1? The media widely reported that Dallas-Fort Worth was the fastest growing metro last year. They got it wrong. Dallas-Fort Worth added more residents but it wasn t the fastest growing. Midland, with a population gain of 4.6 percent, was the fastest. Dallas-Fort Worth s population grew 2.0 percent, still a healthy pace but behind Midland and Houston. The U.S. Census Bureau reports that Houston s population grew 2.1 percent last year, the fastest pace among the nation s 20 major metro areas including Dallas- Fort Worth. 1 A Common Mistake Those unfamiliar with the data often assume all Houston s 125,185 20 MOST POPULOUS U.S. METROS Ranked By Population Population Change Since 7/1/11 Rank Metro As of 7/1/12 Residents Percent 1 New York 19,831,858 101,928 0.5 2 Los Angeles 13,052,921 107,781 0.8 3 Chicago 9,522,434 26,715 0.3 4 Dallas-Fort Worth 6,700,991 131,879 2.0 5 Houston 6,177,035 125,185 2.1 6 Philadelphia 6,018,800 21,326 0.4 7 Washington 5,860,342 89,129 1.5 8 Miami 5,762,717 74,809 1.3 9 Atlanta 5,457,831 83,153 1.5 10 Boston 4,640,802 37,458 0.8 11 San Francisco 4,455,560 58,642 1.3 12 Riverside 4,350,096 48,255 1.1 13 Phoenix 4,329,534 77,456 1.8 14 Detroit 4,292,060 4,094 0.1 15 Seattle 3,552,157 54,338 1.6 16 Minneapolis 3,422,264 33,215 1.0 17 San Diego 3,177,063 38,880 1.2 18 Tampa 2,842,878 16,440 0.6 19 St. Louis 2,795,794 2,419 0.1 20 Baltimore 2,753,149 19,471 0.7 Source: U.S. Census Bureau new residents moved here from somewhere else. The increase actually consists of the natural increase in the population, i.e., the excess of resident births over resident deaths, net domestic migration, i.e., the difference between those who move here from elsewhere in the United States and those who move out of Houston, and net international migration, i.e., the difference between those who move here from outside the United States and those who leave Houston for a destination elsewhere. Annual Estimates of the Components of Population Change 7/1/11 7/1/12 County Population Natural Vital Events Net Migration Change Increase Births Deaths Total International Domestic Austin -16 86 353 267-103 33-136 Brazoria 5,542 2,664 4,728 2,064 2,862 489 2,373 Chambers 719 257 472 215 456 20 436 Fort Bend 19,341 5,361 7,829 2,468 13,837 3,073 10,764 Galveston 5,291 1,619 3,994 2,375 3,637 513 3,124 Harris 80,005 45,321 68,433 23,112 34,647 19,587 15,060 Liberty 626 335 1,061 726 297 40 257 Montgomery 13,343 3,320 6,398 3,078 9,906 1,390 8,516 Waller 334 304 590 286 31 80-49 Totals 125,185 59,267 93,858 34,591 65,570 25,225 40,345 Source: U.S. Census Bureau 1 On a percentage basis, the Dallas-Fort Worth metro ranked 26 th among all U.S. metros. Houston was tied at 21 st with Daphne, AL (pop. 186,830); Sioux Falls, SD (pop. 237,251); Greeley, CO (pop. 263,691) and Victoria, TX (pop 94,675). April 2013 2013, Greater Houston Partnership Page 2

A New Name For Houston The 11 population estimates for Houston feature a new name for the Houston metro. As of February 28, the region is now known as the Houston- The Woodlands-Sugar Land Metropolitan Statistical Area. From this point on, the metro s old name Houston-Sugar Land-Baytown Metropolitan Statistical Area will only be used in an historic context. 2 Counties in Houston-The Woodlands-Sugar Land Metro Area Ranked by Share of Metro Population County Change Since Population 7/1/11 Share of Metro Pop. 11 12 # % Harris 4,173,695 4,253,700 80,005 1.9% 68.9% Fort Bend 607,952 627,293 19,341 3.2% 10.2% Montgomery 471,704 485,047 13,343 2.8% 7.9% Brazoria 319,227 324,769 5,542 1.7% 5.3% Galveston 295,193 300,484 5,291 1.8% 4.9% Liberty 75,945 76,571 626 0.8% 1.2% Waller 44,023 44,357 334 0.8% 0.7% Chambers 35,477 36,196 719 2.0% 0.6% Austin 28,634 28,618-16 -0.1% 0.5% Totals 6,051,850 6,177,035 125,185 2.1% 100.0% Source: U.S. Census Bureau The Office of Management and Budget (OMB) delineated the Houston metro area to consist of nine counties, not 10, dropping San Jacinto. 3 San Jacinto represented 0.4 percent of the region s population, so dropping the county from the official metro delineation won t impact Houston s population rank, but it does complicate matters for analysts and economists who maintain long-running data series on the region s economy. Job News Keeps Getting Better Houston performed better last year than first thought, creating 105,700 net new jobs, or 21,200 more than BLS previously reported. The upward bump in employment came from the annual benchmark revisions, a review process that starts each fall and ends with the release of revised employment data in March. The initial reports are based on a survey sample of area employers. The revised job counts are based on data available from unemployment insurance accounts. BLS revised employment data from April 11 through December 12. The revisions show nine sectors performed better than originally reported and three performed worse. The upward revision for architectural and engineering services was expected, given the performance of the oil industry and the spate of recent chemical plant announcements. 2 The Office of Management and Budget (OMB) develops the standards for delineating and naming metros that Census then applies to the data. The naming guidelines call for a metro name to include the largest incorporated place in the region, any city or Census Designated Place (an unincorporated area that functions much like a city) with a population of 250,000 or more or in which 100,000 or more persons work, and any city or place with more than 50,000 residents but less than 250,000 where the number of workers in the place exceeds the number of residents. 3 OMB defines metropolitan statistical areas as having a large population nucleus and adjacent communities that have a high degree of integration with that nucleus. OMB applies a simple test to determine that degree of integration and whether a county should be included in an MSA. At least 25 percent of the workers living in an outlying county must work in the central county or counties of a metro area, or at least 25 percent of the jobs in an outlying county must be held by workers who live in the central county or counties of a metro area. Evidently, San Jacinto County no longer meets either of those criteria, so OMB decided to exclude it from the officially delineated metro area. April 2013 2013, Greater Houston Partnership Page 3

Manufacturing continues to thrive in Houston, one of the few metros that can make that claim. Significant Revisions to Employment by Sector Upward Revisions Jobs Architectural and Engineering +8,000 Government +7,700 Manufacturing +5,300 Mining and Logging +3,800 Leisure and Hospitality +2,600 Financial Activities +2,500 Employment Services +2,500 Wholesale Trade +1,700 Real Estate +1,500 Downward Revisions Jobs Construction -8,300 Retail Trade -5,400 Health Care and Social Assistance -6,000 Source: U.S. Bureau of Labor Statistics Mining and logging, in Houston primarily oil and gas, performed even better than first reported. The big surprise was the government sector. The bulk of the revisions occurred in local government, primarily in public education, as school districts found ways to hire educators and support staff to teach the region s burgeoning school-age population. The downward revisions for construction and health care are cause for some concern. Given the demand for housing and the chemical plant and office building construction underway, one would have expected construction employment to have been revised upward, not downward. Recent weeks have seen several reports about construction workers classified as independent contractors, keeping them off the formal payroll and allowing companies to avoid paying benefits or running immigration background checks. That practice may explain why construction activity remains strong but the job numbers remain weak. Regarding the health care revisions, BLS probably didn t account for local providers taking early steps to control staff levels in anticipation of changes that will take place this year under the Affordable Care Act. BLS also revised Houston s overall employment growth in 10 downward by 1,400 jobs and in 11 upward by 4,400. Revisions to Houston Metro Area Net Change in Payroll Employment Year Original Estimatport Revised Re- Net Change 10 48,800 47,400-1,400 11 76,800 81,200 +4,400 12 84,500 105,700 +21,200 SOURCE: U.S. Bureau of Labor Statistics Art is Big Business Nonprofit arts and culture contributed $977.7 million to the Houston metro economy in 11, according to Arts & Economic Prosperity IV, a study conducted by the Houston Arts Alliance and Americans for the Arts. The study analyzed the expenditures of 171 Houston-area nonprofit arts and culture organizations and estimated the event-related spending habits of 16.2 million arts and culture patrons. Houston-area nonprofit arts and culture organizations spent $414.6 million on employee salaries, vendor services, supplies and various assets and items within the community. Event-related spending by audiences on art and cultural events pumped an additional $563.1 million into the local economy. April 2013 2013, Greater Houston Partnership Page 4

Economic Impact of Houston s Nonprofit Arts and Culture Organizations and their Audiences 171 arts and culture organizations 16.2 million attendees $414.6 million expenditures $563.1 million expenditures $977.7 million Total Expenditures 29,118 jobs $702.9 million Household Income Source: Houston Arts Alliance, Americans for the Arts, Arts & Economic Prosperity IV The report estimated that a typical arts patron spends an average of $34.81 in the community per event beyond the cost of admission. Average audience expenditures were based on data collected from 1,284 event attendees on their spending in areas such as restaurants, retail stores, and transportation. The typical Houston arts and culture patron spent 40 percent more than the U.S. patron, who spent an average of $24.60 per event. Of the 16.2 million arts and culture patrons, 2.2 million were from outside the region and spent $55.81 per person, or 60.3 percent more than residents. The report states that communities that draw cultural tourists experience an additional boost of economic activity. Cultural tourists typically spend more in the categories of lodging, meals, and transportation. Arts & Economic Prosperity IV also asserts that a vibrant arts community not only keeps residents and their discretionary spending close to home, it also attracts visitors who spend money and help local businesses thrive. Of all nonresident survey respondents, 52.8 percent reported that they would have traveled to a different community in order to attend a similar cultural experience; 43.2 percent of Houstonians responded the same. For the full report, please visit the Houston Arts Alliance website or click here. Aviation Update The Houston Airport System (HAS) handled 3.60 million passengers in February 13, a 1.7 percent decrease from the 3.66 million handled in February 12. Domestic traffic dropped 1.6 percent from 3.04 million passengers in February 12 to 2.99 million passengers in February 13. International traffic fell 2.0 percent from 625,197 in February 12 to 612,693 in February 13. While Hobby Airport continues to experience passenger growth, its volume is not enough to offset the losses that occur at Bush Intercontinental Airport (IAH). The last time annual passenger traffic increased at IAH was in 10. Passenger traffic declined 0.72 percent from 10 to 11 and 0.74 percent from 11 to 12. Although these are small declines, they run counter to the trends Houston has experienced in areas such as employment, GDP, and foreign trade. April 2013 2013, Greater Houston Partnership Page 5

The April 1 issue of Airline Weekly addresses the puzzling traffic decline despite Houston s strong economy and diverse population. The article states that the drop at Bush IAH is more likely a United story than a Houston story. During the past year, United has axed 11 destinations from there. The article noted that United controls 82 percent of the capacity out of IAH, so when the airline cuts routes, it impacts IAH s overall traffic count. Airline Weekly noted that IAH continues to experience growth from new entrants such as Turkish Airlines and Air China. Demand for the new Istanbul route has been so strong that Turkish Airlines added two more weekly flights to its originally scheduled four weekly flights before even beginning service at IAH. Existing international carriers such as Emirates, Qatar Airways, Singapore Airlines, and Lufthansa continue to grow their business at IAH. Houston remains a desirable market for these airlines, given the region s strong demand for premium products such as business-class and first-class seats, and traffic from its diverse and mobile population visiting friends and relatives. Patrick Jankowski and Jenny Philip contributed to this issue of Houston: The Economy at a Glance STAY UP TO DATE! Are you a GHP 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 Houston s 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 company s 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 these 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. April 2013 2013, Greater Houston Partnership Page 6

Houston Economic Indicators A Service of the Greater Houston Partnership MONTHLY DATA YEAR-TO-DATE TOTAL or YTD AVERAGE* Most Year % Most Year % Month Recent Earlier Change Recent Earlier Change ENERGY U.S. Active Rotary Rigs Mar '13 1,756 1,979-11.3 1,758 * 1,990 * -11.7 Spot Crude Oil Price ($/bbl, West Texas Intermediate) Mar '13 93.37 106.11-12.0 94.35 * 103.00 * -8.4 Spot Natural Gas ($/MMBtu, Henry Hub) Mar '13 3.80 2.13 78.4 3.49 * 2.36 * 47.9 UTILITIES AND PRODUCTION Houston Purchasing Managers Index Feb '13 64.3 59.6 7.9 60.0 * 59.7 * 0.5 Nonresidential Electric Current Sales (Mwh, CNP Service Area) Feb '13 3,949,675 3,860,890 2.3 7,881,158 7,875,023 0.1 CONSTRUCTION Total Building Contracts ($, Houston MSA) Feb '13 794,267,000 878,535,000-9.6 1,572,787,000 1,686,607,000-6.7 Nonresidential Feb '13 209,964,000 383,999,000-45.3 437,272,000 726,590,000-39.8 Residential Feb '13 584,303,000 494,536,000 18.2 1,135,515,000 960,017,000 18.3 Building Permits ($, City of Houston) Feb '13 580,120,148 394,105,210 47.2 1,059,927,733 750,333,754 41.3 Nonresidential Feb '13 451,014,145 257,732,987 75.0 794,147,487 525,976,800 51.0 New Nonresidential Feb '13 276,494,719 84,117,845 228.7 448,480,191 170,136,276 163.6 Nonresidential Additions/Alterations/Conversions Feb '13 174,519,426 173,615,142 0.5 345,667,296 355,840,524-2.9 Residential Feb '13 129,106,003 136,372,223-5.3 265,780,246 224,356,954 18.5 New Residential Feb '13 114,701,131 120,545,595-4.8 234,268,925 192,923,902 21.4 Residential Additions/Alterations/Conversions Feb '13 14,404,872 15,826,628-9.0 31,511,321 31,433,052 0.2 Multiple Listing Service (MLS) Activity Closings Feb '13 5,324 4,544 17.2 10,004 8,170 22.4 Median Sales Price - SF Detached Feb '13 161,700 149,900 7.9 155,800 * 144,900 * 7.5 Active Listings Feb '13 33,361 42,199-20.9 33,447 * 42,133 * -20.6 EMPLOYMENT (Houston-Sugar Land-Baytown MSA) Nonfarm Payroll Employment Feb '13 2,752,100 2,633,400 4.5 2,738,000 * 2,621,450 * 4.4 Goods Producing (Natural Resources/Mining/Const/Mfg) Feb '13 540,100 506,300 6.7 535,250 0 503,200 * 6.4 Service Providing Feb '13 2,212,000 2,127,100 4.0 2,202,750 0 2,118,250 * 4.0 Unemployment Rate (%) - Not Seasonally Adjusted Houston-Sugar Land-Baytown MSA Feb '13 6.3 7.3 6.5 * 7.4 * Texas Feb '13 6.5 7.2 6.7 * 7.4 * U.S. Feb '13 8.1 8.7 8.3 * 8.8 * FOREIGN TRADE (Houston-Galveston Customs District) Port of Houston Authority Shipments (Short Tons) Feb '13 3,460,479 3,390,641 2.1 6,912,712 6,965,394-0.8 Air Passengers (Houston Airport System) Feb '13 3,603,181 3,665,434-1.7 7,505,559 7,536,624-0.4 Domestic Passengers Feb '13 2,990,488 3,040,237-1.6 6,161,272 6,171,047-0.2 International Passengers Feb '13 612,693 625,197-2.0 1,344,287 1,365,577-1.6 Landings and Takeoffs Feb '13 60,850 66,108-8.0 125,096 133,359-6.2 Air Freight (metric tons) Feb '13 31,840 32,292-1.4 65,698 65,542 0.2 Enplaned Feb '13 16,234 16,382-0.9 33,640 33,926-0.8 Deplaned Feb '13 15,606 15,910-1.9 32,058 31,616 1.4 CONSUMERS New Car and Truck Sales (Units, Houston MSA) Feb '13 26,635 24,774 7.5 53,611 52,582 2.0 Cars Feb '13 11,528 11,076 4.1 23,084 22,620 2.1 Trucks, SUVs and Commercials Feb '13 15,107 13,698 10.3 30,527 29,962 1.9 Total Retail Sales ($000,000, Houston MSA, NAICS Basis) 3Q12 26,987 23,661 14.1 76,829 70,081 9.6 Consumer Price Index for All Urban Consumers ('82-'84=100) Houston-Galveston-Brazoria CMSA Feb '13 205.716 204.291 0.7 204.906 * 203.338 * 0.8 United States Feb '13 232.166 227.663 2.0 231.223 * 227.164 * 1.8 Hotel Performance (Harris County) Occupancy (%) 4Q12 62.3 58.3 65.4 * 59.8 * Average Room Rate ($) 4Q12 94.08 89.38 5.3 94.23 * 90.57 * 4.0 Revenue Per Available Room ($) 4Q12 58.65 52.10 12.6 61.66 * 54.16 * 13.8 POSTINGS AND FORECLOSURES Postings (Harris County) Feb '13 2,145 3,547-39.5 3,759 6,686-43.8 Foreclosures (Harris County) Feb '13 618 1,065-42.0 1,029 2,004-48.7 April 2013 2013, Greater Houston Partnership Page 7

Sources Rig Count Baker Hughes Incorporated Spot WTI, Spot Natural Gas U.S. Energy Information Admin. Houston Purchasing Managers National Association of Index Purchasing Management Houston, Inc. Electricity CenterPoint Energy Building Construction Contracts McGraw-Hill Construction City of Houston Building Permits Building Permit Department, City of Houston MLS Data Houston Association of Realtors Employment, Unemployment 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 Comptroller s Office U.S. Bureau of Labor Statistics PKF Consulting/Hospitality Asset Advisors International Foreclosure Information & Listing Service April 2013 2013, Greater Houston Partnership Page 8

HOUSTON MSA NONFARM PAYROLL EMPLOYMENT (000) Change from % Change from Feb '13 Jan '13 Feb '12 Jan '13 Feb '12 Jan '13 Feb '12 Total Nonfarm Payroll Jobs 2,752.1 2,723.9 2,633.4 28.2 118.7 1.0 4.5 Total Private 2,375.8 2,356.9 2,265.2 18.9 110.6 0.8 4.9 Goods Producing 540.1 530.4 506.3 9.7 33.8 1.8 6.7 Service Providing 2,212.0 2,193.5 2,127.1 18.5 84.9 0.8 4.0 Private Service Providing 1,835.7 1,826.5 1,758.9 9.2 76.8 0.5 4.4 Mining and Logging 104.0 104.3 96.2-0.3 7.8-0.3 8.1 Oil & Gas Extraction 55.8 55.9 52.3-0.1 3.5-0.2 6.7 Support Activities for Mining 47.1 47.2 42.8-0.1 4.3-0.2 10.0 Construction 186.3 178.6 173.1 7.7 13.2 4.3 7.6 Manufacturing 249.8 247.5 237.0 2.3 12.8 0.9 5.4 Durable Goods Manufacturing 170.1 168.0 158.8 2.1 11.3 1.3 7.1 Nondurable Goods Manufacturing 79.7 79.5 78.2 0.2 1.5 0.3 1.9 Wholesale Trade 148.7 147.9 141.2 0.8 7.5 0.5 5.3 Retail Trade 279.9 283.2 268.0-3.3 11.9-1.2 4.4 Transportation, Warehousing and Utilities 130.9 131.1 125.9-0.2 5.0-0.2 4.0 Utilities 16.4 16.2 16.6 0.2-0.2 1.2-1.2 Air Transportation 22.0 22.1 22.3-0.1-0.3-0.5-1.3 Truck Transportation 24.3 24.1 22.8 0.2 1.5 0.8 6.6 Pipeline Transportation 10.4 10.4 10.5 0.0-0.1 0.0-1.0 Information 31.8 31.8 31.2 0.0 0.6 0.0 1.9 Telecommunications 15.3 15.1 15.4 0.2-0.1 1.3-0.6 Finance & Insurance 89.0 90.1 89.0-1.1 0.0-1.2 0.0 Real Estate & Rental and Leasing 50.2 49.8 49.0 0.4 1.2 0.8 2.4 Professional & Business Services 409.9 401.9 394.9 8.0 15.0 2.0 3.8 Professional, Scientific & Technical Services 198.0 193.8 191.5 4.2 6.5 2.2 3.4 Legal Services 23.8 23.8 23.2 0.0 0.6 0.0 2.6 Accounting, Tax Preparation, Bookkeeping 22.1 21.3 22.7 0.8-0.6 3.8-2.6 Architectural, Engineering & Related Services 68.7 66.8 63.1 1.9 5.6 2.8 8.9 Computer Systems Design & Related Services 27.1 26.8 26.0 0.3 1.1 1.1 4.2 Admin & Support/Waste Mgt & Remediation 188.8 185.0 180.9 3.8 7.9 2.1 4.4 Administrative & Support Services 178.9 175.1 172.1 3.8 6.8 2.2 4.0 Employment Services 73.0 70.4 67.2 2.6 5.8 3.7 8.6 Educational Services 47.3 46.5 45.4 0.8 1.9 1.7 4.2 Health Care & Social Assistance 291.2 289.8 275.7 1.4 15.5 0.5 5.6 Arts, Entertainment & Recreation 26.3 25.6 25.5 0.7 0.8 2.7 3.1 Accommodation & Food Services 234.8 232.6 220.0 2.2 14.8 0.9 6.7 Other Services 95.7 96.2 93.1-0.5 2.6-0.5 2.8 Government 376.3 367.0 368.2 9.3 8.1 2.5 2.2 Federal Government 27.6 27.2 27.3 0.4 0.3 1.5 1.1 State Government 72.3 71.4 71.6 0.9 0.7 1.3 1.0 State Government Educational Services 39.3 38.3 39.1 1.0 0.2 2.6 0.5 Local Government 276.4 268.4 269.3 8.0 7.1 3.0 2.6 Local Government Educational Services 194.9 186.7 189.2 8.2 5.7 4.4 3.0 SOURCE: Texas Workforce Commission April 2013 2013, Greater Houston Partnership Page 9

PURCHASING MANAGERS INDEX HOUSTON & U.S. 2003-2013 70 65 60 55 50 45 40 35 30 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 HOUSTON U.S. Source: National Association for Purchasing Management - Houston, Inc. HOUSTON MSA EMPLOYMENT 2003-2013 NONFARM PAYROLL EMPLOYMENT (000) 2,800 2,750 2,700 2,650 2,600 2,550 2,500 2,450 2,400 2,350 2,300 2,250 2,200 2,150 2,100 2,050 2,000 160 140 120 100 80 60 40 20 0-20 -40 12-MONTH CHANGE (000) -60-80 -100 1,950-120 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 12-MONTH CHANGE JOBS Source: Texas Workforce Commission April 2013 2013, Greater Houston Partnership Page 10

GOODS-PRODUCING AND SERVICE-PROVIDING EMPLOYMENT HOUSTON MSA 2003-2013 GOODS-PRODUCING (000) 550 540 530 520 510 500 490 480 470 460 450 440 2,250 2,200 2,150 2,100 2,050 2,000 1,950 1,900 1,850 1,800 1,750 1,700 1,650 SERVICE-PROVIDING (000) 430 1,600 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 GOODS-PRODUCING JOBS SERVICE-PROVIDING JOBS Source: Texas Workforce Commission 11 UNEMPLOYMENT RATE HOUSTON & U.S. 2003-2013 10 9 8 PERCENT OF LABOR FORCE 7 6 5 4 3 2 1 0 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 HOUSTON U.S. Source: Texas Workforce Commission April 2013 2013, Greater Houston Partnership Page 11

SPOT MARKET ENERGY PRICES 2003-2013 140 28 120 24 WEST TEXAS INTERMEDIATE ($/BBL) 100 80 60 40 20 16 12 8 HENRY HUB NATURAL GAS ($/MMBTU) 20 4 0 0 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 WTI Monthly WTI 12-MO AVG GAS MONTHLY GAS 12-MO AVG Source: U.S. Energy Information Administration 6% INFLATION: 12-MONTH CHANGE 2003-2013 5% 4% 3% 2% 1% 0% -1% -2% -3% Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 HOUSTON CPI-U U.S. CPI-U Source: U.S. Bureau of Labor Statistics April 2013 2013, Greater Houston Partnership Page 12