Permian Basin Economic Indicators
November 27, 2019
Permian Basin total nonfarm employment contracted in October, while year-to-date payrolls remained flat. Unemployment held steady. Oil production reached a new high in September, while the rig count slipped. Home prices in the Permian Basin have dipped, and homes sales have flattened for the past few months.
Permian Basin job growth has been sluggish this year. Through October, employment is little changed at an annualized -0.2 percent (Chart 1). This marks the first time since 2016 that Permian Basin employment has lagged Texas job growth.
Payroll Gains Mixed
In October, mining, logging and construction, the Permian’s largest employment sector, contracted at 13.9 percent annualized, dragging total employment down (Chart 2). Year to date, the sector has fallen by 4.7 percent, and government and financial activities have also posted declines. Meanwhile, leisure and hospitality has grown at a 6.3 percent rate. Overall, the region’s employment has remained relatively flat. In the first 10 months of the year, Permian Basin employment inched down by 400 jobs, compared with the same period last year when jobs soared by 16,700.
After posting consistent declines, the Permian Basin unemployment rate has steadied. In October, the jobless rate stood at 2.3 percent for the fourth consecutive month (Chart 3). The Permian rate remains well below the state average. In October, the Texas jobless rate held steady at 3.4 percent.
Oil Production Climbs
Permian Basin oil production continues to climb, with production estimated to have reached an all-time high of 4.5 million barrels per day in September (Chart 4). Meanwhile, the rig count has been trending down. In October, the rig count rose to 417 from 414 in September; however, it has fallen by 72 over the last year.
Drilled but Uncompleted Wells Edge Down
Drilled but uncompleted wells (DUCs) in the Permian Basin have been on the decline since hitting a peak of 3,713 in July. In October, Permian DUCs were estimated to be 3,589, down 1.2 percent from September (Chart 5). DUCs outside of the Permian continue to drop and fell 4.3 percent from September to October.
The median home price in the Permian was $301,045 in October, down 2.6 percent from August when prices peaked at $309,094 (Chart 6). Meanwhile, monthly home sales edged down to 372 in October, dropping 3.6 percent from September figures.
As sales have slowed, inventories of existing homes have inched up. In October, Midland’s home supply stood at 3.1 months, up from 2.7 in September. Meanwhile, Odessa’s supply was 2.5 months in October, up from 2.4 months in September.
NOTES: Employment data are for the Midland–Odessa metropolitan statistical area (Martin, Midland and Ector counties), unless otherwise specified. Energy data include the 55 counties in West Texas and southern New Mexico that make up the Permian Basin region. Data may not match previously published numbers due to revisions.
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