Houston: reinvention

The United States may be in the economic doldrums, yet Houston is a hot spot, writes Daniel Gross in Slate. It is a story of successful reinvention.

Soaring oil and commodity prices and a weak dollar means the residential market is still buoyant and there is plenty of work. In May, the unemployment rate in the United States' sixth-largest metropolitan area was just 3.8%, with companies adding 71,000 jobs to their payrolls last year. The number of homes sold in Houston may have fallen 15.3% from May 2007, but the median price ($155,000) was unchanged, Gross adds.

The city has managed to evolve into sort of 'Silicon Valley' for the global energy industry, with a high concentration of oil companies, alternative energy start-ups, energy consultants and software developers driving growth. The residential market has also flourished due to 'endless supplies of land' and a lack of zoning laws, which may mean it avoids the 'bubble' trap.

Time Magazine's Justin Fox writes in his Curious Capitalist blog that other metropolitan areas have unemployment rates lower than Houston's and job growth of 1% or more, including Salt Lake City, Oklahoma City, New Orleans, Fargo, Austin, Des Moines, Omaha, Richmond, Wichita, Fayetteville, San Antonio and Seattle. He concedes that a few cities, like Houston, owe much of their job growth to high energy prices. Yet other than Seattle, none of them are anywhere near Houston's size.