I thought I would update some of the employment numbers I posted before on the site. The Bureau of Labor Statistics released revised numbers for October and preliminary numbers for November. Based on these releases employment from October 2014 to November 2014 declined by 4,291. (Cue dramatic music.) Of course this is a great concern for many, and I do not fault them for that. Oil and gas extraction, and the closely related industries, were clear growth leaders for the state as a whole over the last few years. But let’s take a closer look.
What about the same monthly change the year before? From October 2013 to November 2013 employment in North Dakota declined by 3,261. If we looked at the difference from October 2012 to November 2012 we would find a decline of 7, 540. At least recently, the employment change from October to November was typically negative in the state overall, and this last year’s number was not even the biggest decline in the last three.
It is clear that lower oil prices are going to have an effect on employment in the state. It is equally clear that the effects will be difficult to determine right now because we are entering a time when employment in the state naturally declined. Why? Think of all the industries that have reduced demand due to the winter weather, for example construction. Now let’s shift the focus to year-over-year numbers.
From November 2013 to November 2014 employment in North Dakota increased by 15,871, a 4.08% increase. Attempting to make some comparisons similar to my previous post, employment increased by 16,901 (4.31%) from October 2013 to October 2014. So from this perspective, at least through November employment in North Dakota, on a year-over-year basis, was still increasing. How much of this was due to oil?
The core Bakken counties (Dunn, McKenzie, Mountrail, Williams) accounted for employment increase of 6,810. All four of those counties experienced positive growth. This is 42.9% of total state employment growth from November 2013 to November 2014. As a comparison, over the same time period, Burleigh, Cass, and Grand Forks counties accounted for 35.5% of the increase.
To reiterate, clearly we need to discuss the likely changes in growth and economic structure due to the decline in oil prices. However, the recent declines in employment seem more likely a natural part of the seasonal fluctuation in North Dakota’s labor market rather than an early sign of oil price impacts on labor. The four core Bakken oil counties are still over 40% of the growth in employment, year-over year, and in fact the November numbers saw the share of the growth for those counties increase by almost 3% (over the October year-over-year increase).
This work by Flynnglis is licensed under a Creative Commons Attribution-NonCommercial 4.0 International