Published Apr 28, 2025 by Brina Morales
Fifth Third Bank Chief Economist Jeff Korzenik is forecasting the Houston region and the U.S. will grow this year and avoid a recession. Despite growing concerns around inflation, labor shortages, and interest rate uncertainty, Houston stands out as a region poised to weather potential economic headwinds.
In a recent economic outlook presentation during the Greater Houston Partnership's Economy Series event, Korzenik offered reasons why Houston is better positioned than many U.S. cities to remain resilient in the face of macroeconomic challenges:
While inflation remains elevated – particularly in rent, food and energy – aggregate household debt levels are relatively low, reducing the risk of widespread financial distress.
Texas continues to offer a pro-business environment, with Houston at the forefront of population growth and continued attraction of corporate headquarters. Houston ranks No. 1 in job growth, ahead of Dallas, Philadelphia, and Phoenix, and No. 2 in population growth over the past decade and year-over-year. Houston also leads in growth among residents under 18, has the highest two-year GDP increase at 25 percent, and remains the No. 1 exporting metro.
According to Fifth Bird Bank's Empowering American Cities' regional economic snapshot, "compared with other large extended-metropolitan-areas, Houston is in the top third, with projected GDP growth above the U.S. average." The key industries expected to drive growth include health care, energy, logistics and manufacturing.
Manufacturing shows potential as a growth engine, especially with reshoring efforts. However, Korzenik said uncertainty around trade policy could slow momentum because businesses need stable rules to plan long-term investments.
Korzenik said he’ll be keeping a close eye on unemployment claims, which if it gets to 400,000 – 500,000 weekly claims, could be an indication of a recession. While broader national risks remain on the radar, Houston’s demographic strength, business climate and economic diversity provide strong insulation.
Learn more about Houston's economy and why companies continue to choose Houston.