The four-star business lunches are disappearing. Upscale apartments that once were filling fast now are offering free-rent specials. Factories that ran around-the-clock to produce oil hardware are slashing shifts or shutting down entirely. The hard-luck jobless lining up for career counseling include the suit-and-tie engineers, geologists and energy executives who once earned six-figure (or higher) salaries.

As Houston enters the second year of the worst oil downturn in decades, its once-booming economy has sputtered, and the strain finally is starting to show.

Houston could flirt with recession in 2016 as the oil and gas industry cuts jobs and spending, but the local economy isn't collapsing the same way it has during prior oil busts, and most economists don't think it will happen.

"It's bad, but it's not awful," said Ed Friedman, director at Moody's Analytics.

The infamous 1980s oil slump reverberated across Houston, causing 1 in every 7 local workers to lose their jobs before the market eventually recovered. This time around, a healthy national economy coupled with continued population growth and a surge of construction is buffering the metro area from deeper trouble.

The city is harnessing momentum from other booming sectors - petrochemicals, refineries, health care, construction - to offset the losses in energy and energy-related manufacturing.

"Houston is not the same Houston it was 30 years ago," Friedman said.

Hospitals, clinics and medical offices are expanding as they try to keep up with a population boom of nearly 10 percent since 2010. Downtown Houston has been revitalized with new office towers and residential construction that sprang up when oil was hovering around $100 a barrel the previous two years.

And an estimated $50 billion in investment along the city's petrochemical corridor is in the works, enough to build downtown Houston two times over. That industrial renaissance is bringing thousands of new construction jobs to the area that is helping compensate for the losses in energy.

"It's the gift that keeps on giving," said Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston.

Nevertheless, economists predict that 2016 likely will be an austere year for Houston. The oil and gas industry is bracing for anemic crude prices over the next 12 months, and most analysts don't expect meaningful improvement until 2017.

As a result, Houston could lose as many as 50,000 jobs in manufacturing and oil and gas before the industry recovers. How much those cuts drag down the local economy is an open question. The city still is expected to see a net gain in jobs this year that could reach nearly 25,000.

While not the 104,700 jobs created during the oil boom's heyday in 2014, any sort of gain when crude is trading below $40 a barrel widely is considered a positive outcome.

"If you're living and breathing oil and gas, or something close to it, you're really, really concerned," said Ross Harvison, who compiles data on local economy for the Houston affiliate of the Institute for Supply Management (ISM). "If you're in some other area, you're doing OK."

Energy losses reverberate

The buttoned-up lunch crowd still is robust at Sullivan's, a high-end steakhouse in the Galleria that relies on oil and gas for about 30 percent of its revenue.

But the meals are a little less lavish, and the more expensive bottles of wine remain in the cellar, said Dylan Gotesky, the general manager.

"When (energy) companies cut their expense accounts, they don't allow alcohol," Gotesky said. "They still want them to entertain clients, but they don't want $1,000 bottles of wine."

The effects of deepening spending cuts at energy companies and the barrage of layoffs have started to creep into various parts of the local economy.

The metro area's unemployment rate has climbed to 4.9 percent from 4 percent last December, amid a flurry of oil-related job cuts and factory closures that started about a year ago. Sales and use tax revenue, as reported in December, slipped nearly 7 percent from the same time last year, signaling a broader fallout from the global oil slump that has led to bankruptcies and layoffs in Houston and beyond.

Sales of vehicles starting at $100,000 lost 20 percent of its market share between September and October, the most recent month available, according to InfoNation Inc., a Sugar Land-based firm that monitors auto sales activity.

The high-end luxury car market is small, to be sure, but with fewer Mercedes, Ferraris, and Rolls Royces rolling off the lot, it's an indication that the oil crash may be crimping Houston's high rollers.

Across the Houston area, real estate has softened after four years of booming growth. Home sales tumbled by 10.5 percent in November, showing a double-digit slump for the second month in a row. The commercial market is slipping, too, as energy companies throw unused space up for rent, swelling the sublease market to 7.1 million square feet, nearly double what it was a year ago.

And the effects are playing out in what has been a red-hot rental market.

New residents are still signing up to live in many of the newly built apartment complexes in the Energy Corridor and across Houston's west side, but they're getting better deals instead of signing up on waiting lists.

"I don't expect to see a lot of rent increases out on the west side," said Stacy Hunt, executive director of Greystar, which manages and owns multifamily units across Houston. "It's going to take a while to absorb all the units that have been built there, in part since the west side won't have as much growth as we did in years' past."

'What am I going to do?

Layoffs within the oil and gas industry were swift and deep for most of 2015, starting with the factories that churn out rigs, drill bits and steel pipe, then extending into corner offices as crude prices remain well below levels to justify additional drilling and exploration.

And the longer the slump lingers, the harder it becomes for Houston's energy workers to find new jobs in an industry that has produced as much as 40 percent of the city's job growth over the past 25 years.

"There are a lot of people who got into the energy business who are not getting back in," said Jesse Thompson, business economist with the Houston branch of the Federal Reserve Bank of Dallas.

Roger Peters said he was laid off from his job earlier this year working as a salesman in the Houston office of a Louisiana oil field services firm, Quality Energy Services. He initially turned down a couple of jobs, including a position at a software technology firm, where the $40,000 salary offer seemed paltry compared to the $120,000 a year he had been making.

As the months have stretched on with no work, Peters says he regrets that decision. He recently applied for a job managing a Dollar General.

"I'm thinking about a career change," he said, "but at 68, what am I going to do?"

More layoffs are expected in the coming months. Those losses will continue to create an undertow that will pinch local spending, home prices and tax revenue, BBVA chief economist Nathaniel Karp said.

"We're going to lose some of the high-paying jobs that have been driving up the economy over the last few years and we're going to gain some of the lower paying jobs," he said.

As the severance packages dissipate alongside the job listings for new positions, some workers now are having to dramatically curtail their own budgets.

Chris Seay returned to his hometown of Houston in hopes of finding another oil and gas position after losing his job working on a contract for an oil company in Ohio. But he couldn't get permanent work and found himself selling tricked-out children's wagons from the back of his pickup in a Mont Belvieu parking lot to make ends meet.

"I've had to break into my savings and depleted a lot of funds I didn't want to deplete," he said. "No more going to out to eat. No more blowing on myself. Now it's food, my car note and phone bill. The basic necessities. I even contemplated shutting my phone off just to survive."

Tipping point

If Houston slips into a mild recession, the city may already be out of it by the time economists can measure it, as government data often lags by several months.

The Houston Purchasing Managers Index, a closely watched predictor of the city's economic health, indicates the city already may have reached a tipping point.

"We've got a pretty good chance of moving into recession in the first quarter, if we're not already in one," said Harvison of the ISM.

Still, any contraction in economic activity will likely be short-lived as the pace of energy layoffs slows and Houston's population continues to grow.

"People aren't abandoning Houston," said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership.

In addition, the flurry of construction activity in the region's petrochemical corridor isn't slated to peak until late 2016 or early 2017, with Houston expected to add up to 10,000 more construction jobs next year, according to the Greater Houston Partnership.

While those jobs are temporary and transient, they might provide the metro area with enough lifeline to gird against the steep financial turmoil of prior oil busts.

"It's sort of ironic," Gilmer said. "The piece of this diversification that's saving us is the other end of the oil industry."