It’s only a few years since Brazil’s economy seemed poised for a great leap forward into the 21st century, energized by reports of enormous reserves of oil and gas just waiting to be developed by lucrative investors. But, as time has passed, that dream has begun to tarnish as foreign investors have been hard to come by, and poor planning has hamstrung domestic growth. Brazil’s struggles are detailed over at The Washington Post.
While the intricacies of international finance are a little outside of EMSI’s jurisdiction, the business complexities that The Post covered have a very real impact on the lives of everyday Brazilians — especially workers who may have gotten jobs in that initial surge of optimism, only to have those opportunities fade away with time. To see if the workforce situation was truly grim we examined EMSI’s Brazilian data.
Big Country, Big Oil
While the situation for oil and gas industries in Brazil is hardly as bright as it is in, say, North Dakota, it isn’t exactly dire either. Since 2010 (the first year EMSI’s data covers), the leading state for jobs in oil and gas extraction and its support industries (CNAE industry codes 060 and 091, respectively) has consistently been Rio de Janeiro. In fact, as of 2013, Rio de Janeiro had more oil and gas jobs than the rest of Brazil combined (see the chart to the right). The same was true in 2011 and 2012.
The really explosive growth has come in other areas, however, as the table below illustrates.
State Name 2010 Jobs 2011 Jobs 2012 Jobs 2013 Jobs % Change
Source: EMSI Brazil 2013.3 BETA
Rio de Janeiro 32,905 35,521 38,818 39,260 19%
Rio Grande do Norte 3,232 5,335 5,531 5,149 59%
Bahia 3,585 4,195 4,051 3,990 11%
Esprito Santo 2,914 3,183 3,084 3,179 9%
Sergipe 3,135 3,210 3,208 2,890 (8%)
Amazonas 1,409 2,384 1,956 1,905 35%
Rio Grande do Sul 26 31 566 1,083 4065%
Sao Paulo 2,449 498 984 1,046 57%
Total 49,655 54,357 58,198 58,502 18%
Overall, since 2010, the main states for oil exploration have been either steady or growing, with only two exceptions — one down slightly (Sergipe) and the other down dramatically (Sao Paolo.) Rio has added consistently to its job totals, although it has slowed significantly over the last two years. Only 400 new jobs were developed from 2012 to 2013.
While the overall trend from 2010 to 2013 is positive, there’s still a definite softening of oil and gas job growth. Looking back at the table, states with good numbers overall tend to have the most job growth in the first two years. That’s also when Sao Paolo’s job numbers crash. From 2012 to 2013, the only one of those top states to add jobs was Rio Grande de Sul, which did very well. The others uniformly plateaued or even declined. It seems that while there’s life in her engine yet, Brazil’s oil and gas economy is indeed at a crisis — and not only jobs, but also a great deal of national prestige depend on it pulling through and accelerating.
As a side note, looking at Brazil state by state brings up an important fact about Brazilian data: the thoroughness with which it’s recorded varies significantly from state to state. To show what we mean, we compared the number of reported jobs for each state with the number of actual inhabitants. In many states, like Sao Paolo and Rio de Janeiro, between 30% and 50% of the population have jobs — a normal rate for developed economies. In other states, especially those further north, that percentage drops significantly, in some cases as low as 10%. This is due less to extraordinary unemployment, and more to the fact that less-developed areas are less likely to have systematic data about employment. The trends we’ve observed, however, are still a useful indicator, especially since the most important states in Brazil’s oil and gas industry are the well-reported coastal areas.