As much of the Texas economy continues to grow, continued low fuel prices has led to job losses and other downward trends in the state’s oil and gas industry.
The latest jobs report showed the mining and logging sector, which includes the oil and gas industry saw a loss of 1,100 jobs in September. That’s a sharp contrast from September 2018, when the state’s Workforce Commission reported the addition of 1,700 new jobs in the industry.
Reuters reported this week that smaller independent oil and gas producers are having difficulty obtaining loans because banks fear they won’t be able to pay the money back.
According to Keith R. Phillips, assistant vice president and senior economist at the Federal Reserve Bank of Dallas, the weakness in the oil and gas sectors is having a negative effect on “other sectors such as transportation and warehousing, which experienced job losses in both August and September.”
The reserve also said the industry can expect further declines for the rest of the year
“Conditions in the oil and gas sector deteriorated in the third quarter, with overall activity and employment declining modestly. Oilfield service firms were most affected, with a sharp drop in equipment utilization and operating margins,” Dallas Fed senior research economist Michael Plante said. “In general, the survey results suggest the second half of 2019 is going to be a tough one for the industry.”
Focusing solely on the Houston economy, the University of Houston Energy Fellows wrote in Forbes Magazine that oil prices are not a cause for concern in the state’s largest city. The entity also wrote that bankruptcies in the Houston oil and gas industry are only slightly higher this year than last, according to RT.
The unemployment rate for Texas remains a little above three percent, which is below the national rate of 3.6 percent.