Despite the economic downturn during the early stages of the pandemic, Houston entrepreneurs saw a window of opportunity to launch something new.  A report from LendingTree ranks the Houston metro area No. 1 in new-business applications in Texas during 2020. With a 37.4% increase in new-business applications from 2019 to 2020, Houston not only outranks Austin and Dallas but takes 20th place among the nation’s 100 largest metros. The Greater Houston area racked up 118,183 new-business applications in 2020, up from just 85,998 new-business applications in 2019, according to the U.S. Census Bureau. “The pandemic has created so much financial chaos for so many people, and that uncertainty surely spurred many Americans to take the plunge,” said Matt Schulz, Chief Credit Analyst at LendingTree. “Some folks did it out of necessity because of income or job losses. Some folks did it to feel more secure, as the idea of relying on one source of income just didn’t make sense anymore for a lot of people. Others likely did it because they’d wanted to for years but never felt the time was right.” While not everyone who filed an application would move forward to form a business, the increase indicates that a growing number of Houstonians were looking to start one in 2020.  Nationally, despite COVID-19 directives and stay-at-home restrictions, the retail trade sector  experienced the biggest growth among major industries at 59.7%. “So many companies have made it so easy to sell online that people feel good about taking the plunge,” Schulz explained. “Setting up an online store is generally simpler, quicker and less expensive than ever, so the barriers to entry that once scared potential entrepreneurs away from opening a new store aren’t the obstacles that they once were.” Two other sectors did not fare as well. Mining and real estate were the only industries to experience a decline in new applications between 2019 and 2020. Both sectors had trouble adjusting to the restrictions that came with the pandemic.  Though metro data isn’t yet available for 2021, the Census Bureau says business applications continued to climb nationwide last year, up by 600,000 compared with 2020 totals. The Bureau also forecasts a 0.3% increase in business formations, or roughly 30,000 new businesses in 2022.    View the full list below:   Learn more about Houston’s Economy and what makes the region a great place for business. 

HOUSTON (Dec. 5, 2019) – The Greater Houston Partnership forecasts the Houston metro area will create 42,300 net new jobs in 2020. The health care, government, accommodation & food services and construction sectors are expected to lead employment growth, though losses are anticipated in energy and retail trade.  A downturn that’s already begun in the energy industry is thwarting the broader Houston jobs outlook. Investment in that sector is drying up, resulting in fewer wells being drilled, a drop in the rig count and a decline in new equipment orders. Layoffs have already begun in energy services, with more expected to follow across the industry. Meanwhile, sectors tied to population growth, such as health care, and others linked to the global economy, such as manufacturing and trade, will help ensure Houston stays in positive jobs territory in 2020. “As Houston prepares to enter the 2020s, the region needs a new set of growth engines. Perhaps they will emerge from the Texas Medical Center, the Innovation Corridor, or Houston’s Energy Corridor,” said Patrick Jankowski, Senior Vice President of Research at the Partnership. “Until those new engines emerge, Houston’s growth will depend heavily on the U.S. and global economies. Fortunately, both should perform reasonably well next year.”  This year’s Employment Forecast includes a sector-by-sector look at Houston’s major industries, including their contribution to the region’s GDP, current employment and the forecasted change in jobs in 2020.  The top five industries by percentage of GDP are:  Manufacturing: $83.1 billion or 17% of GDP | Current jobs: 241,000 | 2020 forecast: 1,000 jobs gained  Real Estate and Rental and Leasing: $44.4 billion or 9.1% of GDP | Current jobs: 63,400 | 2020 forecast: 1,200 jobs gained  Energy: $44.3 billion or 9% of GDP | Current jobs: 87,400 | 2020 forecast: 4,000 jobs lost  Wholesale Trade: $42 billion or 8.6% of GDP | Current jobs: 172,000 | 2020 forecast: 1,000 jobs gained  Professional, Scientific, and Technical Services: $39.5 billion or 8.1% of GDP | Current jobs: 252,900 | 2020 forecast: 4,700 jobs gained  Jankowski said an oversaturated real estate market and a bleak outlook for oil and gas paint a current picture similar to what Houston faced after the 1980s oil bust. But he said it’s important to remember that since that downturn, the region has added 3.4 million residents and 1.5 million jobs, making the economy far more resilient. As of October 2019, Houston’s employment stood at 3.2 million, a record high for the region.  Click here to see the full report, including additional jobs figures by industry. For a look back at the economy in 2019 by industry, click here for the Houston Economic Highlights report. The mission of the Partnership is to make Houston one of the world’s best places to live, work and build a business. To that end, the Partnership provides this forecast to help the Houston business community and those involved in economic development in the region understand trends influencing the region’s economy and driving industry gains or losses. The forecast is designed to help businesses make better investment, staffing and purchase decisions in the coming year. CONTACT:     A.J. Mistretta                    Maggie Martin  (o) 713-844-3664             (o) 713-844-3640 amistretta@houston.org  mmartin@houston.org