HOUSTON - Even after Hurricane Ike smashed thousands of windows in Houston's skyscrapers last month, times could not be much better in the Petro Metro.
While the ill wind of economic turmoil sweeps across America, Houston has been shielded by a combination of low housing prices, a sagging U.S. dollar and surging profits for energy companies based here.
Houston, the fourth-largest city in the United States, is on track to register one of fastest-growth rates of any U.S. city this year, as the number of jobs grows and housing prices -- falling almost everywhere else -- hold steady.
A big driver has been the rise in crude prices to a peak of $147 a barrel in July this year from less than $20 in 2002.
"There's a ripple effect and Houston's economy tends to do very well because of it," said Ken Medlock, an economics professor at Rice University. "Hard times haven't fallen on Houston the same way they have fallen on Wall Street or California."
A flood of development has included a new stadium, light rail and park.
And while crude prices have fallen to below $80 per dollar, they are at levels where Houston-based companies like ConocoPhillips are still living high on the hog.
Since the Spindletop well gushed Texas tea in 1901 and ushered in the era of global hydrocarbon dependence, Houston's economic wagon has been hitched to the oil market.
When oil hit a record high this summer, a boutique hotel was offering a luxury suite with champagne and strawberries thrown in for $150 -- about the price of a barrel of oil -- in celebration.
When oil prices crashed in 1986, the same hotel was offering an "Oil Barrel Special" lunch for $9, the price of a barrel of oil at that time.
Stephen Zimmerman, the hotel's proprietor, said Houston's oil elite were much more sober during the recent runup in oil prices than they were in the 1980s, when oil executives spent lavishly on art, cars and real estate.
"There was a reckless abandon with how people spent money then," said Zimmerman, 67, who opened La Colombe d'Or in 1980 and has hosted the likes of Madonna and Robin Leach. "The ones who have it aren't flashing it around."
THE COMEBACK KID
Despite oppressive summer heat that downtown workers avoid by taking to an underground warren of air-conditioned tunnels, Kiplinger's Personal Finance magazine in July ranked Houston the No. 1 U.S. city, dubbing it the "Comeback Kid."
But storm clouds may be on the horizon. Oil prices have slid nearly 40 percent to 13-month lows, and natural gas prices have dropped 50 percent from summer highs, over fears that the global financial crisis could take a big chunk out energy demand.
If the economic slowdown continues to impact oil and natural gas prices, Houston's economy could take a hit, said Barton Smith, director of the Institute for Regional Forecasting at the University of Houston.
Where prices are now, around $80 a barrel, would "leave us no better off than the rest of the nation," Smith said.
In July, the Houston area's year-on-year job growth was 2.2 percent, bested only by Dallas at 2.3 percent among the 12 biggest U.S. metropolitan areas. That's about half year-ago growth of over 4.5 percent but well ahead of its nearest contenders -- Washington employment was up 1.2 percent and Boston was up 0.8 percent, according to U.S. government data.
Another unknown is what effect the end of George W. Bush's presidency will have on Houston. Bush is a former Texas oil man whose policies have been viewed as favorable to big oil companies. Neither of the two presidential candidates have ties to the state.
ENERGY CAPITAL
Houston officials say they are not putting all their economic hopes on the price of an oil barrel, noting that it is home to 26 Fortune 500 companies, a number bested only by New York.
The list includes Continental Airlines, Sysco Corp (the largest US wholesale food distributor) and Service Corporation International (the biggest US mortuary firm).
But half of Houston's economy is linked in some way to energy companies like ConocoPhillips and oilfield services firm Halliburton Co., formerly headed by Vice President Dick Cheney.
"There's no doubt we are the energy capital," Houston Mayor Bill White said. The sector plays "an important but generally a decreasing role over time," he said, as its economy diversifies to high-tech and medicine.
Giant international oil companies like Royal Dutch Shell and BP Plc have major trading operations in Houston, and Chevron Corp. occupies the old Enron Corp tower, which stands as a reminder to the spectacular collapse of the once-resurgent energy trader.
A weak dollar has kept demand for U.S. exports firm, which has meant booming business for the Houston Ship Channel along with the nearby port of Galveston, hard hit by Hurricane Ike. Texas led the nation in exports in 2007.
Despite the city's buoyant economy, Houston officials are wary of the "B word".
"The word 'boom' always makes me uneasy because the antonym of it is bust," said Patrick Jankowski, vice president of research at the Greater Houston Partnership. "Houston is not in a boom -- it is on a new path."
Officials make the case that things are different this time around, because Houston is more an engineering and design center for the global oil industry.
"Houston does have an energy exposure -- there is no doubt about that," said Craig Pirrong, a professor at the University of Houston. "But it's not the direct boomtown exposure that Houston had in the 1970s and 80s."
When crude oil prices fell below $10 a barrel in 1986, Houston's boom-town vibe gave way to a ghost-town as businesses shut down and real estate prices plummeted.
At the Petroleum Club of Houston, a private club with commanding views of the skyline, Tuesdays are "Oil Man's Steak Night."
In a sign of possible leaner times ahead, the club on October 10 hosted a "Highly Affordable Wine Dinner," with four courses and wine, for $85.
While the ill wind of economic turmoil sweeps across America, Houston has been shielded by a combination of low housing prices, a sagging U.S. dollar and surging profits for energy companies based here.
Houston, the fourth-largest city in the United States, is on track to register one of fastest-growth rates of any U.S. city this year, as the number of jobs grows and housing prices -- falling almost everywhere else -- hold steady.
A big driver has been the rise in crude prices to a peak of $147 a barrel in July this year from less than $20 in 2002.
"There's a ripple effect and Houston's economy tends to do very well because of it," said Ken Medlock, an economics professor at Rice University. "Hard times haven't fallen on Houston the same way they have fallen on Wall Street or California."
A flood of development has included a new stadium, light rail and park.
And while crude prices have fallen to below $80 per dollar, they are at levels where Houston-based companies like ConocoPhillips are still living high on the hog.
Since the Spindletop well gushed Texas tea in 1901 and ushered in the era of global hydrocarbon dependence, Houston's economic wagon has been hitched to the oil market.
When oil hit a record high this summer, a boutique hotel was offering a luxury suite with champagne and strawberries thrown in for $150 -- about the price of a barrel of oil -- in celebration.
When oil prices crashed in 1986, the same hotel was offering an "Oil Barrel Special" lunch for $9, the price of a barrel of oil at that time.
Stephen Zimmerman, the hotel's proprietor, said Houston's oil elite were much more sober during the recent runup in oil prices than they were in the 1980s, when oil executives spent lavishly on art, cars and real estate.
"There was a reckless abandon with how people spent money then," said Zimmerman, 67, who opened La Colombe d'Or in 1980 and has hosted the likes of Madonna and Robin Leach. "The ones who have it aren't flashing it around."
THE COMEBACK KID
Despite oppressive summer heat that downtown workers avoid by taking to an underground warren of air-conditioned tunnels, Kiplinger's Personal Finance magazine in July ranked Houston the No. 1 U.S. city, dubbing it the "Comeback Kid."
But storm clouds may be on the horizon. Oil prices have slid nearly 40 percent to 13-month lows, and natural gas prices have dropped 50 percent from summer highs, over fears that the global financial crisis could take a big chunk out energy demand.
If the economic slowdown continues to impact oil and natural gas prices, Houston's economy could take a hit, said Barton Smith, director of the Institute for Regional Forecasting at the University of Houston.
Where prices are now, around $80 a barrel, would "leave us no better off than the rest of the nation," Smith said.
In July, the Houston area's year-on-year job growth was 2.2 percent, bested only by Dallas at 2.3 percent among the 12 biggest U.S. metropolitan areas. That's about half year-ago growth of over 4.5 percent but well ahead of its nearest contenders -- Washington employment was up 1.2 percent and Boston was up 0.8 percent, according to U.S. government data.
Another unknown is what effect the end of George W. Bush's presidency will have on Houston. Bush is a former Texas oil man whose policies have been viewed as favorable to big oil companies. Neither of the two presidential candidates have ties to the state.
ENERGY CAPITAL
Houston officials say they are not putting all their economic hopes on the price of an oil barrel, noting that it is home to 26 Fortune 500 companies, a number bested only by New York.
The list includes Continental Airlines, Sysco Corp (the largest US wholesale food distributor) and Service Corporation International (the biggest US mortuary firm).
But half of Houston's economy is linked in some way to energy companies like ConocoPhillips and oilfield services firm Halliburton Co., formerly headed by Vice President Dick Cheney.
"There's no doubt we are the energy capital," Houston Mayor Bill White said. The sector plays "an important but generally a decreasing role over time," he said, as its economy diversifies to high-tech and medicine.
Giant international oil companies like Royal Dutch Shell and BP Plc have major trading operations in Houston, and Chevron Corp. occupies the old Enron Corp tower, which stands as a reminder to the spectacular collapse of the once-resurgent energy trader.
A weak dollar has kept demand for U.S. exports firm, which has meant booming business for the Houston Ship Channel along with the nearby port of Galveston, hard hit by Hurricane Ike. Texas led the nation in exports in 2007.
Despite the city's buoyant economy, Houston officials are wary of the "B word".
"The word 'boom' always makes me uneasy because the antonym of it is bust," said Patrick Jankowski, vice president of research at the Greater Houston Partnership. "Houston is not in a boom -- it is on a new path."
Officials make the case that things are different this time around, because Houston is more an engineering and design center for the global oil industry.
"Houston does have an energy exposure -- there is no doubt about that," said Craig Pirrong, a professor at the University of Houston. "But it's not the direct boomtown exposure that Houston had in the 1970s and 80s."
When crude oil prices fell below $10 a barrel in 1986, Houston's boom-town vibe gave way to a ghost-town as businesses shut down and real estate prices plummeted.
At the Petroleum Club of Houston, a private club with commanding views of the skyline, Tuesdays are "Oil Man's Steak Night."
In a sign of possible leaner times ahead, the club on October 10 hosted a "Highly Affordable Wine Dinner," with four courses and wine, for $85.
