It’s not all Gloom and Doom over lower oil prices…
The saying “everything’s bigger in Texas” is right about the Texas oil and gas industry. No other state comes close to the Lone Star State’s share of U.S. oil production. Texas is largely responsible for the United States’ ranking as one of the top oil-producing countries in the world, outpacing major global producers such as Brazil, Venezuela, Nigeria, and Kuwait.
Texas’ surging oil and gas industry is a leading indicator that the United States could become energy independent in the near future. And if there’s one place where energy independence could be possible, it’s Texas. According to the National Bureau of Statistics the Lone Star State consistently outpaces the nation in unemployment, economic growth, job growth, population growth, and housing market growth – and owes one-third of its economy, 2.1 million related jobs and over $4 billion in sales tax revenue in 2014 to its oil and gas industry.
With falling oil prices there are fears Texas could fall into a recession. The Texas economy resembles that of 1986 when a similar oil price collapse created a major recession in the state while the rest of the country reaped the economic benefit of lower prices at the pump. Lower oil prices not only means less money coming into the state, but a general slowdown in drilling activity as costlier exploration methods get shut down.
Despite a less than a rosy economic picture, Texas added jobs in five of the first six months this year. The state’s 4.2% unemployment rate is down and it’s well below the nation’s 5.3% rate, according to the Federal Reserve Bank of Dallas.
While the state has lost about 27,000 energy jobs so far this year, the oil boom in Texas has helped boost wage growth in the state. Texas has 32,000 more jobs for teachers, nurses and other workers in these two areas this year. There were also more jobs created in tourism and in the state government. The Texas economy is resilient because it’s diversified and doesn’t depend as much on oil as it once did.
As they say in the Lone Star State, “Don’t Mess with Texas”.
By Anne Capps Executive Vice President – American Receivable