Economic activity increased in all 12 districts monitored by the Federal Reserve between mid-February and the end of March, with hiring in the energy sector picking up steam in the Dallas, Kansas City and Minneapolis districts, home to the some of the nation’s prolific shale plays.

But in the latest edition of its Beige Book, issued Wednesday, the Fed said several of its contacts reported concerns over price volatility and tightness in the labor market surrounding the oil and gas industry, adding that an accelerated pace for oil and gas drilling may not last through the year.

The Fed said hiring in oilfield services (OFS) “picked up notably” in the first quarter in the Dallas District, but also noted that some exploration and production companies have continued to making layoffs. The district includes Texas, southern New Mexico and northern Louisiana, thereby comprising the bulk of the Barnett, Eagle Ford and Haynesville-Bossier shales and the Permian Basin.

“Several contacts speculated that employment in the energy sector will not increase proportionately with increases in drilling activity because of improved production technology and efficiencies,” the Fed said. “Labor market tightness has appeared throughout the oil and gas supply chain, with several contacts specifically mentioning shortages of truck drivers, and nearly all sectors reported upward wage pressures.”

The Fed said OFS firms in the Dallas District “increased prices over the past six weeks, with further increases expected as demand picks up.” Later in its report, the Fed added that demand for OFS “improved substantially…over the past six weeks.

“Oil and gas activity surged, with firms noting a pickup in the Eagle Ford Shale as well as the Permian Basin. Several contacts mentioned that the accelerating pace may not be sustainable, expecting rig count growth to moderate mid-year. Outlooks overall for 2017 were more positive than in the prior reporting period, especially among OFS firms, but most contacts noted concern over expected volatility.”

In the neighboring Kansas City District, the Fed said activity in the energy sector “continued to expand moderately, while expectations eased somewhat but remained solid.

“The number of active oil and gas drilling rigs grew moderately, mainly in Oklahoma and New Mexico. Contacts reported slight increases in OFS costs for completions since last year, and some expected further increases through the summer. Most respondents expected oil and gas prices to stay near current levels in the coming months.”

According to the Fed, a large supply of natural gas from the Marcellus Shale “was the main factor keeping price expectations low. Some oil and gas firms also reported having concerns about labor shortages affecting the near-term growth in activity.”

The Kansas City District includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri and northern New Mexico, and includes the Niobrara and Woodford shales, as well as the Denver-Julesburg, Piceance and San Juan basins.

In the Minneapolis District — which includes North Dakota and Montana, and therefore much of the Bakken Shale — the Fed said the oil-producing region of North Dakota “saw an increase in hiring, according to a state contact.” Later in its report, the Fed added that “while wages in the Bakken oil region remained below their peak, housing allowances and daily stipends have come back after being eliminated during the oil downturn, according to a source there…

“District oil and gas drilling as of late March increased from low levels a month earlier. Some contacts in the oil-producing region of the district expected an increase in activity in April.”

The Fed said that in the Cleveland District — an area that includes Ohio, western Pennsylvania and eastern Kentucky, and therefore large portions of the Marcellus and Utica shales — “oil and gas field materials prices moved higher because of the expansion in upstream activity…

“A small rise in oil and gas drilling is spurring additional investment in midstream and pipeline projects. Drillers are being motivated by a slow upward trend in wellhead prices and a need to perform on their leases. With the new presidential administration, oil and gas producers are hopeful for a less restrictive permitting process.”

In the Atlanta District, the Fed said its energy contacts there “noted that crude oil inventories remained at historically high levels due to weak demand, oversupply, and continued production.” The district covers Alabama, Florida, Georgia, southern Louisiana, southern Mississippi and eastern Tennessee.

“Utility industry contacts noted continued investments in renewable energy,” the Fed said. “[Our energy] contacts cited robust construction on gas liquefaction plants in southwest Louisiana — however, skilled labor shortages were also noted. Operational liquefied natural gas plants experienced steady export activity.”

Elsewhere, the Fed noted that specialty metals manufacturers in the Chicago District “reported higher sales to the energy sector, though contacts noted that efficiency gains in the sector over the last couple of years have resulted in a notable decline in sales volume per barrel of oil produced.”

Meanwhile, in the San Francisco District, which includes Alaska, the Fed said “oil production remained stable in Alaska, but relatively low oil prices have slowed investment substantially.”