Tumblelog by Soup.io
Newer posts are loading.
You are at the newest post.
Click here to check if anything new just came in.

Within Houston, oil workers may face the ax but employment still grows

Simply by Howard Schneider
BAYTOWN, Texas, March ten (Reuters) - Plunging energy costs robbed the Texas economy of an estimated 60, 000 jobs last year, as oil and gas companies put the brakes on production and slashed investment decision, throwing engineers and geologists out of work.
But the forest of design cranes sprouting around this petrochemical center tell the flip side from the story, as some of the same makes that drove down those prices sparked tens of billions of dollars in investment in new processing vegetation to take advantage of cheap and abundant supplies of oil and gas.
Exxon Mobil Corp and Chevron Corp are usually building mammoth chemical crackers to process polyethylene from natural gas, and logistics firms have created millions of new square feet of storage place space as they plan to ship the outcome to the global plastics industry.
Rising chemicals output has contributed in order to record traffic at the Houston Interface Authority, and officials say the trend is expected to continue. Throughout the Baytown area, which is on the outskirts of Houston, an estimated $8 billion worth of projects is expected to become finished this year and another $22 billion completed in 2017.
This provides all propped up employment in Texas at an otherwise difficult time. The positive impact on the overall U. S. economic climate from the chemicals industry that this illustrates is also one of the reasons the U. H. should avoid a downturn despite troubles elsewhere in the world. That in turn should create the conditions for the Federal Reserve to raise interest rates once again this year.
"They are shedding jobs upstream. That's the nature of the company, " said B. J. Claire, associate executive director of the Baytown-West Chambers County Economic Development Foundation. But "the opportunity to build these crackers just could not be approved up... access to cheap feedstocks transformed the whole equation downstream. "
Construction workers have jobs, new schools are now being built to handle a growing local people, a new Kroger Marketplace store has been completed, and a partially vacant shopping mall is being overhauled.

The global economy may be sputtering, with weak demand one of the reasons that oil prices have cratered. However the U. S. keeps adding jobs, and at a rate consistent with the view from Fed policymakers who anticipate growing U. S. payrolls means enough domestic spending to keep the economy expanding overall.
Texas "lost a lot of energy jobs, " stated Dallas Fed research head Mine Yucel, but the state "has been very resilient. I was surprised. "
Across the oil patch, there's a similar pattern of positive trends offsetting bad news. Though low prices have crippled investment in exploration plus cut drilling rigs, overall work in Oklahoma continues to rise in a situation that has built large logistics plus defense contracting industries.
In North Dakota, Get The Best Special Offers ground zero for the hydraulic fracing boom, overall employment has dropped, but the unemployment rate remains a super-low 2 . 7 percent when compared to national average of 4. nine percent. The number is held lower by an expected adjustment: just like workers flocked to the state whenever vacancies were plentiful, the labor force has declined as the jobs vanished and workers returned home.
These states represent a drop in the bucket compared to Texas's $1. six trillion, 12. 5 million-job economy, a size approaching that of Canada. Despite the oil downturn, Get The Best Special Offers unemployment rate is only 4. 7 % as non-energy companies like fiber-optic manufacturer Applied Optoelectronics expand in the state.
In a rough 12 months for the oil business, the state in general added 144, 000 jobs within 2015, according to the Texas Workforce Commission payment, with strong gains across the business and hospitality sectors, as well as expert services, health and education.

The Given meets next week to take stock of the U. S. economy after a rocky beginning to the year.
A rate hike is not expected at the March conference but the central bank's post-meeting declaration and fresh economic projections from policymakers will provide important insight into just how worried the Fed is about the particular combined impact of cheap oil and weak global demand on prospects for U. S. jobs, development and investment.
In an organization that will prizes consensus under Chair Janet Yellen, clear cracks have emerged: between Vice Chair Stanley Fischer's recent statement that inflation is "stirring, " for example , and Fed Governor Lael Brainard's continued extreme caution about how the rest of the world may lessen the U. S.
The Fed raised rates in December for the first time in the decade and projections by its policymakers at the time showed they expected four hikes this year. However , several investors and analysts now feel the Fed may be stuck where it is for much of the rest of the year.
The jobs growth figures provide a counterweight to that view. The labor recovery has been going on for seven many years now, and whenever hiring provides slowed in one sector of the economy another has picked up the slack.
The early strength in commodity-based jobs that spread across the hydraulic fracing fields of North Dakota and Oklahoma gave way over the past 2 yrs to a surge in construction, education and learning and health-related positions. Even in govt, where belt-tightening by local, federal and state agencies trimmed payrolls coming out of the particular recession, employment is growing again.
U. S. non-farm jobs growth has held at an average of 190, 000 per month during the recovery. Which faster than anticipated and strong enough to both accommodate new entrants to the labor force and bring sidelined workers back into jobs.
There have already been concerns that many of the jobs getting created were at the low end of the wage spectrum, in dining places, LAS VEGAS HOTELS and retail stores. But most recent analysis of occupation and wage trends by Goldman Sachs showed that over the past two years in particular job gains have been strongest in higher-paying positions.
For a graph showing the composition of U. S i9000. jobs growth in the past few years, notice website
In its most recent Beige Guide release of anecdotal economic info, Fed officials noted that previous oilfield workers were shifting straight into jobs as auto mechanics, while construction and petrochemical companies acquired shortages in fields considered supporting to the skills of frontline oil and gas workers.
"It's easier to place a welder right now than someone with a four-year degree, " said Jim Hanna, a vice president for human resources and industrial relations with Fluor, the engineering and construction giant working on the Chevron project within Baytown.
Fluor's workforce at the Chevron site is already up to 3, 000, with 600 more to be employed over the summer.

In the particular Houston metropolitan area, which when compared to rest of Texas has traditionally been most dependent on the energy sector, the oil crash did not prevent a net gain of 23, 500 jobs last year. That was well lacking the above-average 100, 000 roles that the city had been adding in recent years as oil production surged, mentioned Patrick Jankowski, vice president associated with research at the Greater Houston Relationship. But it is also more in line with the city's long-run average and likely a lot more sustainable.
While there may be some effect on wages from the loss of higher paying out positions for geologists and technical engineers, said Jankowski, some of the skilled design trade and health jobs which will replace them also pay endowed.
Fluor's Hanna said it was regular for construction workers to put in 50-hour weeks or more, with annual wages running upwards of $100, 000.
"I would not describe Houston's economy because strong, but I would never use the word recession, " Jankowski stated. "We will have a year or two of slower growth, rather than an increase... We will be selling fewer BMWs. "
(Reporting by Howard Schneider; Editing by Martin Howell)

Don't be the product, buy the product!