The future is always uncertain, but it seems that labor markets in the core Bakken counties could be having their Mark Twain moment: “The report of my death was an exaggeration.” My central argument here is not that the markets are not correcting, and I am not suggesting declines in employment will not happen, though the extent of that decide is obviously debatable. At some level, you might expect people to welcome the pause in the employment growth occurring now. It could reduce pressures in the other related areas such as housing. Regardless of any decline, the data show that employment is still more than twice the level from just 5 years ago (see figure below).
Before we look at the small dip at the end of the last figure, take a look at the next one, which calculates the difference from year to year for each month to correct for seasonality in the data.
The last time the year-over-year change in employment was negative was around 70 months ago, and is still positive as of September (the last month of data available). This is not to say we are not seeing adjustments in labor and product markets in the Bakken region. I would hope we are, since it implies markets continue to function. We still saw an increase of over 1000 employed from September 2014 to September 2015. On a percentage basis this is still close to 2% (see figure below).
Now it is unlikely to look at an economist as a source of optimism (dismal scientist here, all the way), but this seems to indicate that aspects of the oil downturn will not transmit as quickly to other sectors as previously thought. Right now we are still not dealing with an actual decrease in employment, just a decline in the rate of decrease in those core Bakken counties. The next three to six months will be very telling as we hit a full year of the general perception of downsizing in the industry. Global price movements and the economic performance of rival sectors will all be important to look at for insights about future movements.
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