Page 15 - NBIZ October 2020

ENERGY MANUFACTURING
The energy industry struggled before the pandemic. Ninety percent of the manufacturing losses were in dura-
Crude oil topped at $70 per barrel in October 2018, then ble goods, i.e., items that were not easily consumed or that
began to drift downward. The U.S. Rig Count peaked at wear out quickly. Two-thirds of those losses can be tied to
1,083 in December of 2018. Energy employment plateaued the energy downturn. Fabricated metal products (i.e., pipes,
at 238,880 jobs in June of 2019. And drillers sank 16 valves, flanges) and oil field equipment manufacturing have
percent fewer wells last year than in 2018. cut a combined 9,600 jobs. Without an increase in drilling
Energy’s future doesn’t look bright. Global oil demand activity, the jobs are unlikely to return.
won’t return to pre-pandemic levels until 2022, according Chemicals and refining, which employs one in four
to separate forecasts by the International Energy Agency manufacturing workers in the region, remains a bright
(IEA), the U.S. Energy Information Administration spot. The two downstream sectors added 1,100 jobs during
(EIA) and the Organization of Petroleum Exporting the pandemic. This trend should continue as U.S. producers
Countries (OPEC). benefit from lower-cost feedstocks and take market share
A March survey by the Federal Reserve Bank of Dallas from producers overseas.
found most exploration firms need West Texas Intermediate
(WTI) at $49 per barrel or higher to drill a well profitably. CONSTRUCTION
EIA doesn’t forecast WTI to reach that level until late in Nearly one in eight Houston construction workers lost
2021. And Rystad Energy doesn’t see drilling activity their jobs in the pandemic. Projects were delayed or can-
returning to last year’s level for at least five years. We expect celed, forcing contractors to reduce their payrolls. A
additional layoffs as the industry adapts to weak demand nationwide survey by the Associated General Contractors
and soft prices. (AGC) found that 50 percent of its members had at least one

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