Oil & Gas Growth Expected in 2014 - Dallas Fed

December 5, 2013 R.T. Dukes

The Federal Reserve Bank of Dallas reported that oil & gas companies in the 11th district, which includes Texas, expect further growth in 2014.

Texas respondents indicated particularly strong activity levels in energy, which means the Eagle Ford Job market will remain robust.

The Fed also noted demand for oilfield services was steady even though the rig count had fallen in response to more wells being drilled per rig.

“The Eleventh District economy expanded at a moderate pace over the past six weeks. Manufacturing activity increased overall, with demand weakening in only a few industries.”

Other economic highlights from the region included:

Refining and petrochemical contacts reported extreme difficulty finding engineers and construction workers. They also noted rising wages
Manufacturers of construction related products reported slightly higher demand
Chemical production in the Gulf Coast region was up
Refinery utilization rates were down with the fall maintenance season
Winter fuel standards are pulling prices down at refineries, but margins remain healthy
Business relocations to Texas fueled demand for non-financial services
Railroad contacts said U.S. cargo volumes grew strongly during the reporting period and noted chemicals shipments were robust
"A contact noted Houston may be close to having too much office development in the works."
Drought conditions continue to ease

The highlights came from the Dallas Beige Book, which summarizes recent economic conditions in the Eleventh District.

Read the full beige book at dallasfed.org

Energy Activity Holding at High Levels in Texas - Dallas Fed

October 17, 2013 R.T. Dukes

The Federal Reserve Bank of Dallas reports energy activity has seen little change from "high levels" over the past reporting period in its most recent Beige Book.

It's no surprise. More than 800 of the ~1,700 rigs active in the U.S. are working in Texas. Over 250 of those rigs are active in the Eagle Ford.

The report goes further in saying activity is higher than last year, but it does note one not so promising metric. Margins for oil & gas service firms have tightened over the past few months. Tighter margins are the direct result of operators moving into development mode where there is an increased focus on costs.

Takeaways from the energy report include:

Global energy demand is steady
Oil & gas operators expect "modest" improvement in economy through 2014
Petrochemical production was down slightly due to unplanned outages and softening global demand

Other economy-wide notes include:

Reports of labor shortages have eased from earlier in the year
Housing market remains strong
Office & industrial leasing activity strengthened
Severity of the drought's influence on agriculture in Texas lessened with recent rainfall

The Dallas Beige Book summarizes recent economic conditions in the Eleventh District.

Read the full Beige Book at dallasfed.org

Retail Workers Are Hard To Find In The Eagle Ford - Dallas Fed

July 19, 2013 R.T. Dukes

The latest beige book from the Dallas Federal Reserve notes that finding retail workers in the Eagle Ford is becoming more difficult. The economist also highlighted rising commercial lending & real estate development.

“If you are looking for qualified workers, consider a listing on our Eagle Ford Jobs Board. Over 20,000 job seekers search here each month!”

The Federal Reserve Bank expects energy activity to increase in the second half of the year. Activity levels in South Texas and West Texas are expected to remain high as Gulf of Mexico activity increases.

There is difficulty finding workers across the state:

"Difficulty finding qualified workers became more widespread, with scattered reports among accounting, finance, single-family construction, auto sales, and primary metals manufacturing firms, as well as from retailers in the Eagle Ford Shale area."

Moderate growth in loan demand:

"Financial institutions experienced moderate growth in loan demand. Commercial real estate and transactions lending increased solidly, especially in oil and gas areas around the Eagle Ford Shale and West Texas."

Little change in energy, but growth expected:

"Energy activity was little changed at high levels. Global demand held steady, although there was some weakness from Mexico and Canada. Respondents expect improvement in energy activity in the second half of the year, due in part to anticipated increases in rig activity and production from the Gulf of Mexico."

Read the full beige book at dallasfed.org

Employment Growth Continues In The South Texas Eagle Ford - Dallas Fed

June 17, 2013 R.T. Dukes

The Federal Reserve Bank of Dallas released its most recent beige book and Eagle Ford job growth was noted as part of the steady labor market.

The report states "Financial firms added employees to comply with regulatory stress testing and wealth management, and noted employment growth in Austin and the Eagle Ford Shale area. Several contacts reported difficulty finding qualified people to fill vacancies.... A construction-related manufacturer noted truck drivers were in short supply."

Notes on the energy sector included:

Energy activity improved since the last report. The Texas rig count increased, and contacts noted strong global demand. Respondents expect further improvement in the second half of the year, especially due to anticipated increases in rig activity and production from the Gulf of Mexico.

Other highlights include:

Manufacturing activity increased overall, and many contacts were more optimistic in their outlooks.
Drought conditions worsened across the Eleventh District.
Refiners said operating rates and margins were up over the reporting period.
Automobile sales were steady over the reporting period, and demand remains above year-ago levels.
Transportation service firms said overall cargo and container volumes increased over the reporting period. Railroad contacts reported notable increases in motor vehicles, petroleum, lumber......
..commercial real estate sector said leasing activity for office and industrial warehouse space continued at a steady pace.

The Dallas Beige Book summarizes recent economic conditions in the Eleventh District. Read the full report at dallasfed.com