Planned oil industry layoffs in the U.S. are approaching 100,000 in the past four months with more likely to come.
Oil-producing states such as North Dakota, Texas, Oklahoma and Louisiana are catching the brunt of the cutbacks just as consumers are enjoying cheaper gasoline prices brought on by the 55% drop in crude oil prices since last June.
"The entire Midwest from Texas to North Dakota is really feeling the effects," says Moody's Analytics economist Aaron Smith.
About 91,000 energy-related job cuts have been made public since early December, says Continental Resources, the Oklahoma City-based oil producer, which has been tracking companies' layoff announcements by the week. They came from oil exploration and production companies, oilfield services companies and manufacturers, such as U.S. Steel, that supply them. Some cuts have occurred, and most are expected this year.
Oilfield services companies, including Schlumberger and Baker Hughes, have announced about 69,000 layoffs the past four months, Continental's count shows.
Oil and natural gas producers, including Chevron and BP, have said they're chopping 10,000 jobs. And manufacturers, such as those that make steel for oil pipes and storage tanks, plan about 11,700 reductions.
Nationally, employment in mining and logging, which includes the oil industry, is down by a seasonally adjusted 14,000 the past two months. Moody's Analytics projects net job losses for the mining sector — including layoffs and hiring — will total 37,000 in the second and third quarters before rising crude prices help recoup about half that deficit by early next year.
But low oil and gasoline prices should spur more consumer spending, a stronger economy and average monthly job growth of 270,000 this year, up from 260,000 in 2014.
Shrinking oil industry payrolls, however, are reshuffling states' economic fortunes. New drilling techniques that siphon crude from shale rock fueled roaring job growth in states such as North Dakota, Texas, Oklahoma and Louisiana.
But North Dakota, which has led the boom, in February lost its place as the state with the lowest jobless rate for the first month since October 2008, as unemployment there rose to 2.9% from 2.8%. Nebraska claimed the top spot with a 2.7% rate.
In North Dakota, mining employment tumbled by 600 jobs in February alone, the Labor Department reports. There are 96 active drilling rigs in the state, down from 194 a year ago, according to the state Department of Mineral Resources.
"We're starting to see effects ... from low oil prices," says Michael Ziesch, labor market information manager for Job Service North Dakota.
Yet the state's labor market is so tight, he says, that oil companies resisted layoffs until recently, opting to hang on to employees.
The loss of North Dakota's top ranking in unemployment is "concerning," says Sandy McMerty, spokeswoman for the state Commerce Department. But noting the state still has about 21,000 job openings, she adds, "There are ample openings for workers" in fields such as health care, engineering and construction.
She says the state has been working to broaden its manufacturing base to insulate it from oil price shocks. "We're developing new industries," including unmanned aircraft and biotechnology
Oil-producing states such as North Dakota, Texas, Oklahoma and Louisiana are catching the brunt of the cutbacks just as consumers are enjoying cheaper gasoline prices brought on by the 55% drop in crude oil prices since last June.
"The entire Midwest from Texas to North Dakota is really feeling the effects," says Moody's Analytics economist Aaron Smith.
About 91,000 energy-related job cuts have been made public since early December, says Continental Resources, the Oklahoma City-based oil producer, which has been tracking companies' layoff announcements by the week. They came from oil exploration and production companies, oilfield services companies and manufacturers, such as U.S. Steel, that supply them. Some cuts have occurred, and most are expected this year.
Oilfield services companies, including Schlumberger and Baker Hughes, have announced about 69,000 layoffs the past four months, Continental's count shows.
Oil and natural gas producers, including Chevron and BP, have said they're chopping 10,000 jobs. And manufacturers, such as those that make steel for oil pipes and storage tanks, plan about 11,700 reductions.
Nationally, employment in mining and logging, which includes the oil industry, is down by a seasonally adjusted 14,000 the past two months. Moody's Analytics projects net job losses for the mining sector — including layoffs and hiring — will total 37,000 in the second and third quarters before rising crude prices help recoup about half that deficit by early next year.
But low oil and gasoline prices should spur more consumer spending, a stronger economy and average monthly job growth of 270,000 this year, up from 260,000 in 2014.
Shrinking oil industry payrolls, however, are reshuffling states' economic fortunes. New drilling techniques that siphon crude from shale rock fueled roaring job growth in states such as North Dakota, Texas, Oklahoma and Louisiana.
But North Dakota, which has led the boom, in February lost its place as the state with the lowest jobless rate for the first month since October 2008, as unemployment there rose to 2.9% from 2.8%. Nebraska claimed the top spot with a 2.7% rate.
In North Dakota, mining employment tumbled by 600 jobs in February alone, the Labor Department reports. There are 96 active drilling rigs in the state, down from 194 a year ago, according to the state Department of Mineral Resources.
"We're starting to see effects ... from low oil prices," says Michael Ziesch, labor market information manager for Job Service North Dakota.
Yet the state's labor market is so tight, he says, that oil companies resisted layoffs until recently, opting to hang on to employees.
The loss of North Dakota's top ranking in unemployment is "concerning," says Sandy McMerty, spokeswoman for the state Commerce Department. But noting the state still has about 21,000 job openings, she adds, "There are ample openings for workers" in fields such as health care, engineering and construction.
She says the state has been working to broaden its manufacturing base to insulate it from oil price shocks. "We're developing new industries," including unmanned aircraft and biotechnology
0
Comments