Houston retailers are largely settling down after their hiring frenzy of the past few months, but the city still has 19,000 more jobs than February 2020 despite years of coronavirus uncertainty and rapid retail turnover.
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This higher job count comes largely from increased consumer spending, according to second-quarter data from Marcus & Millichap. Retail sales are up 18% for the 12 months ending in March through a combination of 100,000 newly minted Houstonians and surges of new visitors, as seen in a 45% year-over-year activity boost at George Bush Intercontinental Airport. The Houston metro just edges out the greater U.S. in terms of year-over-year employment gains.
Now halfway through the year, Marcus & Millichap estimates that 112,000 retail jobs will be created in 2022, higher than its initial retail forecast for 2022, which predicted 89,000 new jobs.
Retail is one of the few industries that has recovered more jobs than it lost after the start of Covid-19, per May data from the Greater Houston Partnership, up nearly 144% over the peak of pandemic losses. Other industries, like transportation, warehouses, finance and insurance, saw their jobs recover by more than 500%.
The dire construction straits facing real estate in general seem to be bolstering retail's recovery, the Marcus & Millichap data suggests. Few new construction starts mean vacancy has been falling for the past year. Vacancy is now at about 2019 levels, at 6%. Net absorption is 1M SF greater than deliveries. Despite that, Houston's availability is still the highest of the major Texas metros.
"When vacancy peaked at 7.0 percent in September 2020, there was some uncertainty as to how long it would take for retailer demand to bounce back," the report states. "Initial fears of a longer-term rebound have been neutralized by the impressive recovery that transpired in the recent quarters."
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