Economists: Worst Of The Oil Collapse Is Over
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COLLEGE STATION – When it comes to Texas’s economy, new research suggests the worst of the oil price collapse is over.
Researchers at the Texas A&M University Real Estate Center say a month ago, oil bottomed out around $29 a barrel. This week, it’s around $39.
In the last three months, Chief Economist Dr. Jim Gaines says Texas’ unemployment is slowing after a major decline in the energy industry last year.
“The biggest monthly job loss was probably in about November,” said Gaines. “In January and February, we were still losing jobs, but not nearly as fast, and it appears now that it’s going back the other way.”
If the trend is true, Gaines says the state may have hit its maximum job loss. He says the rate of active rigs has also begun to level off.
“The active rig count had been falling,” said Gaines. “It collapsed very quickly from a little over 900 rigs in the state to just slightly more than 200 rigs.”
Texas was losing 70 rigs a week. Now, it’s only about three.
Gaines says as the price of oil continues to rise, the speculation is rigs will too, but he says increased productivity may keep the number of active rigs low.
“It may not decline anymore, and if it does increase, it would be very small numbers,” said Gaines.
When it comes to the price at the pump, Gaines says consumer savings haven’t boosted the economy like experts hoped.
“The money that’s not spent on gas might be being saved,” he said. “The consumption part of it hasn’t come in as heavily or as pronounced as we might have thought.”
Gaines says it’s too early to call when it comes to whether jobs will return to the industry, but adds trends show it could take several years.
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