More positive news about the Houston jobs scene arrived this month when the area’s unemployment rate fell below 5% for the first time since May 2008. This came in addition to news that further job growth could be on the horizon with more energy-spawned trade and investment. A report released this month by the Greater Houston Partnership and HSBC Group states that energy reform opening Mexico to foreign investment as well as investment in LNG export terminals and chemical plants along the Gulf Coast are expected to create thousands of jobs in the Houston region. The Energy Capital of the World already has bucked national unemployment trends, which also have shown signs of improvement dropping recently from 6.7% to 6.3 % in April. For the Houston area, the unemployment rate dropped from 5.2% in March 2014 to 4.6% in April 2014. A year ago, the rate was 5.9%. The energy industry has no doubt played a significant role as oil and gas E&P keeps workers busy. Texas Workforce Commission Chairman Andres Alcantar called April a robust month. “With all 11 major industries adding jobs over the year, I encourage job seekers to visit Workforce Solutions offices around the state and seize the opportunities created by Texas employers,” he said. The recently released report forecast even more jobs for the Houston area, driven by abundant shale oil and gas supplies along with what is expected to be a need for expertise and services as Mexico reaches beyond its borders to develop its hydrocarbon resources. “The current expansion along the ship channel and the door to Mexico that will soon open for companies wishing to explore there will have a significant impact on Houston’s growth. The full potential is unknown, but the increase in shipments of commodities, equipment and services will be measured in the billions,” the report said. “This could add more than 55,000 jobs to the region’s economy.” Using the Regional Input-Output Modeling System to predict the impact exports could have on the Houston region, the report unveiled some impressive numbers if assumptions hold true: • Assuming the more than $40 million worth of planned chemical plant expansions in the region lead to a 15% increase in exports, this would equate to an additional $2.5 billion in exports, supporting an additional 23,787 jobs. Currently, Houston exports $16.8 billion in chemicals via the Houston-Galveston Customs District; • Assuming Mexico will need lots of oilfield equipment, a 15% increase in exports would equate to an additional $2.8 billion in equipment exports, supporting an additional 28,574 jobs; • Assuming Mexico will also need more pipelines to transport products to refineries and processing facilities, a 15% increase in annual exports would equate to an additional $390 million in exports, supporting an additional 2,824 jobs, the report said. Presently, Houston exports $2.6 billion in iron and steel products. The model used to calculate the numbers utilizes a method for determining multiplier effects. “For instance, in Houston’s case, the model would measure how an increase in the manufacturing of drilling rigs would require inputs from steel manufacturers, cable makers, diesel engine firms, paint suppliers and so forth,” the report explained. “The model also estimates the impact on consumer-oriented firms, like grocers, doctors and dry cleaners that are supported by the workers receiving paychecks in primary industries. In economics parlance, these are referred to as employment, output and earnings multipliers.” No one knows how much exports will actually increase at this point, and unforeseen changes or events could alter the outlook. But if plans progress as hoped, the future looks promising indeed. Contact the author, Velda Addison, at vaddison@hartenergy.com.