'Brexit' likely bad news for Houston economy

HOUSTON (FOX 26) - With their ballots the British have decided on divorce from the European Union and like any break-up the aftermath may well be messy and largely uncertain.

"And because of that uncertainty they are most likely to postpone hiring decisions. They are most likely to postpone investment decisions," said Patrick Jankowski, an economist Patrick Jankowski of the Greater Houston Partnership. Jankowski says the fallout from Britain's departure will be less economic growth throughout Europe and less acutely, a slowdown in the U.S. as well.

"I can see this having repercussions for other countries wanting to pull out of the EU as well. This may be the first one. This may be the domino," said Jankowski.

Craig Pirrong, head of the Global Energy Management Institute at UH's Bauer College of Business, says the British will likely have company.

"I was in Denmark last month and I was talking to CEO's of major shipping companies and they said, 'Hey if Britain leaves, Denmark's likely to leave'," said Pirrong.

Pirrong believes the uncertainty and shake-out in Europe will dampen economies everywhere.

"It could conceivably trigger a global recession yes, but I think more over the longer term, the impact would be that world growth would be slower," said Pirrong.

The turmoil is also likely to draw investors worldwide into the relative safety and stability of the U.S. Dollar, increasing the currency's value, but also further depressing the cut-rate price of oil, a commodity at the core of Houston's economy.

"We don't want to see a strong dollar in Houston. We really don't, because it makes what we are trying to sell over seas more expensive. It will make it harder for us to sell our goods and services overseas," said Jankowski.