HOUSTON - Houston’s economy has been growing and steadily becoming more tied to the global market over the last decade.
During the first day of the Partnership’s State of Houston’s Global Economy event held on May 26, Patrick Jankowski, Partnership Senior Vice President of Research at the Houston Economy Council, presented his analysis regarding the impact of Covid-19 on international business in the region and what it takes to recover. He expected the global economy to grow by 6% this year and 4.4% in the following year.
During the Covid-19 pandemic, there was an unusual downhill on the global market. With 66 million worldwide Covid-19 cases, the global GDP has decreased by 3.3%, and people lost 255 million full-time jobs around the globe. Foreign trade dropped by 5.3%, and global foreign direct investment dropped to 42%, the lowest since the 90s.
Houston exports also fell by 18.3% during the pandemic, further exacerbated by the decrease of demand for crude and petroleum products. Despite the drop in exports, however, Houston was still the leading U.S. exporting area in 2020.
As vaccinations have started in the U.S. and around the world, the economy has also begun to recover. Global consumer confidence is currently at a record high. Jankowski mentioned that he anticipated seeing strong growth in Houston’s economy this year.
Below are several key takeaways of day two of the State of Houston’s Global Economy event.
1. The outlook for the global economy is positive. Ken Monahan, Vice President of International Economic Affairs at the National Association of Manufacturers (NAM), found an 88% optimism rating in the manufacturing sector.
2. Rob Gorham, Executive Director of the SecureAmerica Institute, said that the pandemic enabled people around the world to look for solutions using technology: “Now there’s an opportunity to use new technologies and innovations developed to tackle COVID in new areas.”
3. As data are now stored online, companies have also been confronted with new challenges. According to Ann Johnson, Corporate Vice President of the Cybersecurity Solutions Group at Microsoft, companies need to be prepared with plans that include cybersecurity.
4. China and the U.S. have been in a trade war for quite some time. The tension has been magnified during the pandemic. David Dollar, a senior fellow at Brookings Institution, said that China has a rapidly aging population, which means that its workforce will decline. This demographic reality will steer China into becoming more of a consumer economy, which means the U.S. exports to China will grow.
5. Reskilling and upskilling are needed to make the U.S. manufacturing sector stronger and more globally competitive. “There are 500,000 cybersecurity jobs open right now in the U.S. alone. If we don’t fill these jobs, we’re going to have more cybersecurity risk,” said Johnson.