The good news for the oil and gas industry: Oil prices hit a 2016 high earlier this week and surpassed $46 a barrel for the first time since November.
The bad news for people who work in oil and gas and communities that rely on the sector: Employment is steadily declining, and job postings data indicates the downward trend is likely to continue.
Over at Medium, we wrote about the once-booming oil and gas sector that has hit rough times. The free fall in oil prices that began in mid-2014 has prompted a major correction in the oil and gas labor market after several years of huge gains. Jobs in the oil and gas extraction industry, which rode the oil boom to 24% growth from 2010–2014, dropped 6% from 2014–2015. And online job ads related to eight core oil and gas occupations have also plummeted.
The latest job postings data from Emsi shows a nearly 50% drop in postings for petroleum engineers and geological and petroleum technicians from March 2015 to March 2016. Job ads for geoscientists sank 56% over that time.
As we explained in the Medium post, job postings activity is fairly limited among oil and gas companies, like it is for most firms that employ skilled trades occupations. Here are some numbers for context:
- In Texas, employers posted 31,000 job ads for registered nurses in March compared to 1,450 for the aforementioned eight oil and gas occupations.
- In North Dakota, the center of the oil boom, companies posted fewer than 100 oil and gas job ads in both March 2015 and March 2016 but hired an average of 850 of these workers per month in 2015. (That hires number in North Dakota is down from an average of 1,100 per month in 2014.)
But it’s not just job postings that point to the decline of the oil and gas sector. Looking at Emsi labor market data compiled from government sources, support activities for mining shed nearly 85,000 jobs from 2014–2015 — more than triple the job loss in the second slowest-growing industry, machinery manufacturing (-23,095). Oil and gas extraction lost 12,654 jobs, sixth-worst among all industries.
The decline of oil and gas has far-reaching implications for economic development organizations in regions with a large share of oil and gas jobs. The areas coping the best are those that have succeeded to some degree to diversify their mix of industries. And for communities that haven’t diversified as much as they would like, the recent oil price collapse served as strong motivation to put diversification strategies in place.
Check out our full post at Medium. For more information on this analysis or how you can use Emsi’s labor market data, please contact us. Follow Emsi on Twitter (@DesktopEcon) or check us out on LinkedIn and Facebook.