(Commentary by Ralph Bivins) – Houston leads the nation in job growth with 112,200 new jobs created for the 12 months ending in July – almost exactly what one research group forecasted.
That represented a 4 percent gain for Houston’s job market to top the nation’s major metropolitan areas, followed by Dallas/Fort Worth at 3.9 percent and Miami at 3.3 percent.
The energy industry has been supercharging the Houston economy for several years. Many experts, especially the local ones, predicted the economic surge would peter out in 2014.
But researchers at California-based Marcus & Millichap nailed it. Marcus & Millichap predicted Houston would gain 111,700 new jobs in 2014. That forecast has turned out exceptionally accurate right now – only 500 jobs off the annual total reported by the Texas Workforce Commission recently.
Marcus & Millichap’s James Reeves said the research group at the real estate firm came up with the super-accurate forecast by analyzing ubiquitous data last fall in order to publish the prediction in M&M’s 2014 National Apartment Research Report. The brilliant report was prepared by M&M’s Hessam Nadji and John Chang.
On the other hand, two of most-quoted Houston-based economists, Bill Gilmer and Patrick Janowski, did not fare as well with their forecasts.
o Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston, said the Houston area would create only 65,000 new jobs in 2014.
o Patrick Jankowski, the Greater Houston Partnership’s vice president of research, predicted only 69,800 new jobs would be created.
Gilmer and Jankowski have been back-pedaling and revising as the year has gone along. But, the question needs to be asked: If Marcus & Millichap can be so accurate, how can the local economists be so wrong? Their highly publicized forecasts influence a lot of business decisions.
Of course, 2014 is not over yet. Maybe the Houston economy will blow up and be attacked by a black swan. It’s not likely, though.
Since January, we’ve been writing about the excessively negative forecasts by this pair of local prognosticators. I am no economist. But take my word for it: The Boom Is Not Over.
Commentary by Ralph Bivins, Editor, RealtyNewsReport
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