Texas Job Growth Slows

April 9, 2015 Elizabeth Alford

As crude prices continue to bounce around, the effects of sustained low prices are showing up in slowed job growth throughout Texas.

The Texas Workforce Commission reported that the state added 7,100 jobs in February, which was the smallest monthly job gain since October 2011. The biggest hit came in the oil industry where 6,900 jobs were lost in January and February.

Low crude prices means reduced activity and the decreased demand for oilfield equipment and services means layoffs for many companies that service producers. These companies are reporting significant revenue losses as drilling activity and oil prices have steadily declined. Recent layoffs in the service sector include:

Offshore drilling contractor Seadrill will cut 159 jobs
Tenaris will cut 133 workers from its northwest Houston plant
AFGlobal Corp. will cut 89 workers from the company’s North Houston facility
DHW Well Service Inc. will cut 55 workers from a fabrication shop in Victoria

“Texas ‘continues to be a model for economic growth and prosperity across the nation. However, there is more we can and must do. I am working with the legislature to ensure we pass legislation that lowers the tax burden on businesses, guarantees long-term funding for transportation, and provides economic development opportunities – including in higher education - to further diversify our economy.’ ”

— Gov. Greg Abbott

Despite the slowed job growth, the Texas consumer confidence index increased 4.7 percent over this time last year and the state’s unemployment rate dropped to 4.3 percent, down from 4.4 percent in January 2015.

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

Eagle Ford Energy Boom is Just Beginning

September 21, 2012 R.T. Dukes

"The Eagle Ford energy boom is just beginning" was the comment for Texas A&M University professors earlier in the week. Hotels and restaurants are already benefiting in Corpus Christi and other industries will be following along in short order. The influx of South Texas oilfield jobs is supporting the economy across the area and not just where drilling is active.

San Antonio Businesses Have Eagle Ford Optimism

August 9, 2011 Kenny DuBose

Eagle Ford Shale jobs have posted major gains over the past year and optimism in the economy is spreading throughout San Antonio. Even with the obstacles the U.S. faces as a country, South Texas is poised for growth. Only one in nine businesses in a recent survey expects business to slow in the coming year and only one expects the economy to stay flat. The rest are expecting higher demand for products and services. An interesting note from the story is that the one company that expects the economy to stay flat hired 13 employees in the past year! If that is a sign of things to come, South Texas might benefit from the Eagle Ford Shale Oil boom for many years to come.

The association's 2011 Mid-Year Economic Report found that 58 percent expect the economy to remain flat in the coming year, and 30 percent — more than twice the number counted in a similar survey last December — felt it would fall back into recession.
Texas' and San Antonio's economies have outperformed the nation's during the recession, however, and area business owners have been quick to acknowledge their good fortunes.
Only one of the nine businesses asked to assess their prospects in the coming year was pessimistic, and a second one, Metropolitan Contracting Co., said the coming year should be stable.
But Tim Swan, CEO of Metropolitan, said that's not bad news because his business picked up last October, enough for the contractor to add about 13 employees this year.