What The Government Shutdown Cost Houston

The federal shutdown is over, but it's likely to hurt economic growth for the fourth quarter. And Houston won't escape the damage.

BBVA Compass estimates the shutdown will knock 0.2% off America’s gross domestic product for the fourth quarter. The bank says Houston is likely to get off easy. Its low concentration of federal workers means the region’s economy will take a hit of only 0.1%.

That’s still about $75 million, and it doesn’t include the indirect hit to businesses from federal workers and contractors who cut back on spending. Jason Frederick is a senior economist with BBVA Compass.

“The multiplier effect on that probably would be about 1.5 times that effect. So the total impact is about $115 million to the Houston economy in that short time frame.”

Frederick says some of that will be made up once furloughed workers receive the back pay voted them by Congress. But that will be little consolation to local merchants for sixteen days of weaker sales.

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...