Midland Unemployment Falls to 2.2 Percent as Labor Force Tops 101,000

Mella McEwen | Midland Reporter-Telegram | August 17, 2018

A surging oil and gas sector continued to strengthen the Midland labor market in July, according to figures released Friday by the Texas Workforce Commission.

The commission reported the July unemployment rate in its Midland metropolitan statistical area fell to 2.2 percent from 2.4 percent in June and 3 percent last July. Midland reported the state’s lowest unemployment.

The Odessa metropolitan statistical area saw its unemployment rate drop to 2.9 percent from 3.2 percent in June, tying Midland’s western neighbor with Amarillo for the state’s second lowest unemployment.

“We have a very hot economy in the Permian Basin,” observed Willie Taylor, chief executive officer of the commission’s Workforce Solutions Permian Basin.

He noted that the area’s dominant industrial sector, Mining, Logging and Construction, which includes the oil and gas industry, seems to be expanding. In Midland, the sector now comprises 34 percent of its industrial composition, up from an average 32 percent.

Taylor added that Midland’s strong wages – among the highest in the state - reflect the fact “we don’t have enough workers.” He put average weekly wages in the Permian Basin at $1,200 compared to $1,100 statewide “and Midland is even higher.”

“Mining, Logging and Construction is driving the economy; everything else is along for the ride,” he said.

Midland’s civilian labor force topped 100,000, coming in at 101,167, up from 100,082 in June and 93,349 in July 2017.

“Midland has seen an increase of about 1,000 in its workforce every month since January of this year,” James Beauchamp, president of the Permian Basin Coalition, a public-private alliance supporting safe, reasonable development in the Permian Basin, told the Reporter-Telegram by email.

“It is a tremendous increase, and frankly, it is an increase that one, most people are not really aware of, and two, that we are simply not prepared for.”

The coalition recently hosted a regional luncheon at the Petroleum Museum to discuss how infrastructure needs, from roads to housing to pipelines, could hamper the region’s economic growth.

“Most of the Texas Department of Transportation energy sector projects are all centered around the Delaware Basin, so there isn't really much added capacity for roads outside of projects that were leveraged through the Midland Development Corp., such as completion of North Loop 250, and county efforts aimed at the county road extension that could someday serve as South Loop 250,” Beauchamp continued.

He went on to add, “While Midland has had tremendous gains in housing, those gains have not kept up with demand. Additionally, it isn't possible to add additional housing as fast as we are adding people, and as these folks look for places to live, it is going to drive up the price of housing units and rents.”

Infrastructure was also on Taylor’s mind as he told the Reporter-Telegram that infrastructure will play a significant role in the region’s growth. “We want people to be able to bring their families. That means teachers, people in the medical field,” he said.

Midland added 400 nonfarm jobs from June to July, bringing the total to 104,000. The Education and Health Services sector added 400 jobs during the month, followed by the Mining, Logging and Construction sector with 300 jobs. But those gains were offset by the loss of 200 jobs in the Trade, Transportation and Utilities sector and 100 jobs in the Leisure and Hospitality Sector.

For the 12 months from July 2017 to July 2018, the Midland MSA added 9,500 nonfarm jobs for a growth rate of 10.1 percent, a number Taylor called “phenomenal.”

The Mining, Logging and Construction sector added 7,400 jobs, followed by the Leisure and Hospitality sector with 600 new jobs. The Trade, Transportation and Utilities sector added 500 new jobs and the Education and Health Services 400 new jobs. Some 300 new jobs were added in the Professional and Business Services sector while the Manufacturing sector, Information sector and Other Services sector each added 100 new jobs.

“We’re going to continue to see growth. We can’t just sit back and watch it,” Taylor warned.

The area’s cities and counties need to get aggressive in addressing how they’re going to handle the growth, he said. And, he added, “We need to look at our mentality towards growing communities.”

He said continues to encourage younger residents “without skills to go to the local colleges and upgrade their skills. It can make the difference between making $15 an hour and $20 an hour.”

Statewide, the unemployment rate remained at 4 percent in July. The Workforce Commission said the state added 23,500 seasonally adjusted nonfarm jobs, marking 25 consecutive months of employment growth. For the year, the commission says the state has added 377,100 jobs for an annual employment rate growth of 3.1 percent.

While Midland reported the lowest unemployment, McAllen-Edinburg-Mission posted the highest at 6.9 percent.

Midland Unemployment

January 2018 2.4 percent January 2017 4 percent

February 2018 2.5 percent February 2017 3.8 percent

March 2018 2.4 percent March 2017 3.5 percent

April 2018 2.1 percent April 2017 3 percent

May 2018 2.1 percent May 2017 3 percent

June 2018 2.4 percent June 2017 3.2 percent

July 2018 2.2 percent

July 2017 3 percent

Preliminary numbers for July with June numbers in parentheses:

Midland 2.2 (2.4) Amarillo 2.9 (3.1) Odessa 2.9 (3.2) Austin-Round Rock 3.1 (3.2) College Station-Bryan 3.3 (3.5) Sherman-Denison 3.3 (3.6)

Lubbock 3.4 (3.6) San Angelo 3.4 (3.6) Abilene 3.5 (3.7)

San Antonio-New Braunfels 3.5 (3.7) Dallas-Plano-Irving 3.6 (3.8) Fort Worth-Arlington 3.7 (3.8) Tyler 3.7 (3.9) Wichita Falls 3.7 (3.9) Waco 3.9 (4.1) Laredo 4.0 (4.3) Victoria 4.1 (4.3) Killeen-Temple 4.2 (4.4) Longview 4.3 (4.5) El Paso 4.4 (4.7)

Houston-The Woodlands-Sugar Land 4.4 (4.6) Corpus Christi 5.2 (5.5) Texarkana 5.3 (5.6) Beaumont-Port Arthur 6.3 (6.4) Brownsville-Harlingen 6.6. (6.9) McAllen-Edinburg-Mission 6.9 (7.2)

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