In what could be good news for real estate, a new report indicates Houston is on track to gain a significant number of jobs next year, with sectors including construction, energy, government and healthcare set to bring strong employment.

But with the city’s economy more directly tied to the national economy than any time in recent history, the U.S. slipping into recession has the power to greatly impact the final number.

Greater Houston Partnership made this prediction in its newly released Houston Region Economic Outlook, which also warned a recession could come from a variety of factors, though the main trigger would be the Federal Reserve continuing to raise interest rates to combat inflation.

The organization’s baseline forecast shows Houston experiencing a shallow recession in the first half of the year, with growth resuming in Q3. That would bring a net gain of about 60,800 jobs, though estimates range from 30,400 to 79,200 jobs, depending on whether there is a prolonged recession or the country barely misses one.

The latter would be GHP’s “best-case scenario.”

The baseline puts the region slightly below its long-term average of 65,000 to 70,000 new jobs annually, according to the report. It’s far below the number of jobs the region added this year — 144,000 at the end of October, according to the Texas Workforce Commission.

GHP Chief Economist Patrick Jankowski forecasts a 50% chance of a short and shallow recession, a 30% chance of nearly missing a recession and a 20% chance of a deep, protracted recession. Despite the likelihood of a recession, Jankowski is staying positive, especially regarding job growth.

“While business leaders are anticipating a recession, they aren’t letting it derail their plans,” Jankowski said in a news release, citing The Conference Board’s recent CEO survey, which found 98% of respondents expect a recession in the next 12 to 18 months, yet 86% plan to maintain or increase their capital budgets, and 44% plan to keep hiring.

“That tells us that business is prepared for what’s coming, but more importantly looking beyond it,” Jankowski said.

In the short, shallow recession scenario, GHP predicts that interest rate-sensitive industries, including real estate, will suffer short-term pain. However, the area would continue to attract job seekers from elsewhere, giving a boost to the healthcare, education and government sectors, and the year would still end with net job growth across all sectors.

In any scenario, GHP predicts Houston’s construction industry will enter the new year with a considerable backlog.

Dodge Data & Analytics reports nearly $31B in construction contracts were awarded in the first nine months of 2022, up from $23.3B over the comparable period in 2021, according to the report. That’s a 22.7% increase after adjusting for inflation.