Perryman was recently quoted in a February 2nd feature on the oil industry in Time magazine where he projected annual job losses tied to the oil bust that could range from 125,000 to 175,000 jobs. This will have the greatest impact in the Eagle Ford field in South Texas and the Permian Basin in West Texas as well as Houston. The energy sector has seen strong job growth at five times the state's average with oil counties averaging 2.3% unemployment. The effect is especially stark in oil towns like Midland which leads the nation in per capita income at $83,000.
Even with job losses, Perryman still projects Texas will see a net gain of approximately 200,000 to 225,000 jobs in 2015. The Texas economy is more diversified than during previous oil busts and industries that are petroleum intensive such as chemical feedstock producers will benefit from lower energy costs.
So what we can expect in Texas is slower growth, as fewer new wells get drilled and marginal ones are closed. It is likely there will be a knock-on effect as wages move down in oil counties and unemployment rises. However, as Pioneer Resources president Tim Dove recently said at the Goldman Sachs energy conference, "This is our fifth rodeo, and I think we will work our way through it."
* This is post is a synopsis of a more extensive article written by Bill Saporito for Time Magazine February 2nd, 2015.