Permian Basin Economic Indicators
January 17, 2020
Permian Basin payrolls remained flat through November, and the unemployment rate has ticked up in recent months. Oil production reached a new high in November, while the rig count was largely flat in December. Home price gains in the Permian have slowed, and homes sales dipped further.
While the Texas economy is growing at a healthy pace and has posted solid job gains, the Permian Basin labor market is sluggish. Data through November 2019 show that Permian employment is unchanged at 0.0 (Chart 1). This marks the first time since 2016 that Permian Basin employment has lagged Texas job growth.
Permian Industries See Mixed Performance
The energy slowdown has led to cuts in the Permian’s largest industry—mining, logging and construction—which employs nearly 1 in 3 Permian workers. Through November, this industry’s payrolls were down an annualized 4.2 percent (Chart 2). Government jobs have also posted declines throughout the year, falling an annualized 6.9 percent. However, losses have been offset by gains in trade, transportation and utilities, which climbed an annualized 4.1 percent, and leisure and hospitality, which rose 6.2 percent through November.
Unemployment Rate Steady
Unemployment in the Permian Basin has been ticking up since bottoming out at 2.0 percent in April 2019 (Chart 3). In November, however, the jobless rate was 2.4 percent for the second consecutive month. While it has been edging up, the rate remains well below the state’s jobless rate of 3.4 percent.
Oil Production Climbs
Permian Basin oil production continues to climb, with production estimated to have reached an all-time high of 4.6 million barrels per day in November (Chart 4). While the rig count was flat in December, it has fallen by 88 since its peak of 493 in November 2018.
Oil Prices Edge Up
Oil prices experienced a temporary boost in early January as tensions between Iran and the United States rose. West Texas Intermediate’s January month-to-date price averaged $60.27 per barrel, slightly above December’s average of $59.82 (Chart 5).
Permian’s median home price was $303,730 in November, just above the October median of $302,615 (Chart 6). Meanwhile, monthly home sales continue to dip and averaged 366 in November, just below October’s average of 370.
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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