Woodlands weathers slow economy, leaders optimistic about 2017
By: Bridget Balch
San Antonio Express News
Area business people heard a hopeful message of recovery from a lineup of political and economic leaders at The Woodlands Economic Outlook Conference Friday.
The Woodlands managed to add 510 jobs in 2016, in spite of the fact that no new major companies relocated to the area last year, according to Gil Staley, CEO of The Woodlands Area Economic Development Partnership.
“I thought there was going to be a loss,” Staley said.
And while the energy sector has suffered through the downturn in oil and gas, it has remained the top employment sector in The Woodlands, closely followed by health care. In 2016, the sectors that saw the most growth were health care, education, retail and food service, which are poised to see even more growth in 2017.
The two new hospitals in the area, Houston Methodist The Woodlands Hospital and Texas Children’s Hospital The Woodlands, are expected to open this year with more than 1,500 new jobs, collectively. The area’s existing hospitals,Memorial Hermann The Woodlands Hospital and CHI St. Luke’s Health The Woodlands Hospital added nearly 500 jobs, Staley reported.
In education, Conroe ISD anticipates adding 1,500 students and is building two new schools within the next two years, Staley said.
In spite of the optimism surrounding these sectors, the real estate and Class A office space markets have slowed. The Woodlands had about a 12 percent vacancy rate in 2016 for its niche market of Class A office space.
Still, Staley preferred to see this as an opportunity for improvement.
“The Woodlands area has the building blocks for a strong future,” Staley said.
Tim Welbes, president of The Woodlands Development Company, also presented a positive outlook on real estate in spite of dropping home sales – from 2,898 in 2013 to 2,262 in 2016. January home sales reports show that it’s a seller’s market in The Woodlands for homes priced under $600,000, with a 3.7 months’ supply, and a buyer’s market for homes priced over $600,000, with a 15.4 months’ supply.
Welbes was optimistic about home sales in 2017 because he believes the threat of rising interest rates could pressure those looking at homes to buy sooner rather than later.
“People have waited and they’re tired of waiting. This is going to be a better year,” Welbes said. “Americans just like shiny, new stuff.”
In addition to planning to add 354 acres of new residential development, The Woodlands Development Company also has plans for 838 acres of commercial development on the books. Among the projects planned are retail developments on Lake Woodlands Drive and Research Forest Drive and a new high-rise office building on The Waterway.
Chairman of The Woodlands Township board Gordy Bunch reiterated The Woodlands’ firm financial standing, citing the township’s comparatively low 23-cent property tax rate and significant growth in hotel and sales tax revenue over the past five years.
Speakers Texas Sen. Brandon Creighton, R-Conroe, U.S. Rep. Kevin Brady, R-The Woodlands, Heidi Cruz of Goldman Sachs & Co. and State Comptroller Glenn Hegar also addressed the conference attendees on state, national and global issues affecting the economy.
Creighton emphasized the state Legislature’s responsibility to balance the budget, invest in infrastructure and maintain a business-friendly climate that continues to incentivize companies to create jobs in Texas.
Brady, chair of the influential Ways and Means Committee in Washington, spoke of his recent meetings with Republican leadership and President Donald Trump and of his plans to repeal and replace the Affordable Care Act, enact tax reform, redesign the Internal Revenue Service and cut down on “red tape” that gets in businesses’ way.
“We want Washington to take less so you can invest more,” Brady said.
He also praised Trump on his recent actions to revive the Keystone XL and Dakota Access pipelines.
“It’s refreshing to see a president and administration who understand how important energy is to the American economy,” Brady said.
Hegar, who replaced former Texas Gov. Rick Perry – now Secretary of the Department of Energy – as the luncheon keynote speaker, assured the crowd that Texas’ economy is resilient. Although the state lost 160,000 jobs in mining and manufacturing, Texas has not seen the overall negative numbers that other oil-and-gas-dependent states have registered, Hegar said.
Even during the slow economic times, Texas managed to edge its way into its place as the 10th-largest economy in the world, outpacing Spain, Australia and Russia, according to Hegar.
Hegar credited the Houston area, and specifically The Woodlands, for contributing to Texas’ success.
“The Woodlands is helping drive the Texas economy,” Hegar said. “We’re going to be able to get through this. Texas is a great place to be home.”