Even with lower oil prices, Texas will add more
jobs in 2015
Just as we are enjoying low numbers at the gas pump, we are experiencing job loss because of the lower oil price. Lower fuel prices help truckers make more money per load but is there a downside to the low price? We have heard newscasts of personnel cuts at BP and Apache because of the low cost per barrel. I found this prediction that is quite promising: Federal Reserve Bank of Dallas Senior
Economist and Research Officer, Keith Phillips, projects Texas should add
235,000 to 295,000 new jobs in 2015. The growth represents about a 2 to 2.5
percent increase in jobs, but lower than 2014 employment growth at about 3.6
percent.
Phillips presented the economic data as
part of his Texas Economic Outlook at San Antonio’s Federal Reserve
location. Philips states, “The sharp decline in
oil prices has created much uncertainty in our outlook for state job growth
this year, but we’re viewing it as a headwind for the Texas economy. However,
Texas has a diversified economy, and while the drop in oil prices slows job
growth, it won’t send the state into a recession like it did in the 1980s.”
Regions dependent on oil production,
such as the Permian Basin and the Eagle Ford Shale, will sharply cut drilling
if crude prices continue to trade at $50 a barrel or less, according to
Philips. Houston will also experience a drop in oil jobs as well if prices stay
at or below $50 a barrel. However, Philips states employment growth will remain
positive for 2015.
Goldman Sachs reduced its
six-month WTI predictions by half, to $39 a barrel from $75, and for 12 months
to $65 from $80 a barrel. Read more…
Goldman suggests the market needs a
prolonged lower crude oil price of around $42 a barrel so the market demand and
supply can reach an equilibrium.
Moving forward,
Jeff Roach
www.transportationtraining.com
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