November Showed More Job Gains for U.S. OFS Sector, but Uncertainty Still Prevails
Oilfield equipment and services jobs in the United States climbed slightly in November for the third month in a row, but it’s still a tough slog with pandemic-related job losses down by nearly 92,000, according to a new analysis.
The Petroleum Equipment & Services Association (PESA) said the domestic oilfield services (OFS) and equipment sectors added an estimated 2,665 jobs in November, according to preliminary data by the U.S. Bureau of Labor Statistics (BLS).
Estimated job losses related to energy demand destruction from Covid-19 “now total 91,680,” according to PESA. “OFS employment is down 81,610 jobs since November 2019.”
The BLS data showed the OFS sector gained 1,498 jobs in September and added 5,091 jobs in October, said PESA researchers.
“OFS sector employment has increased by approximately 9,254 jobs over the past three months, according to preliminary BLS data, after losing 100,934 due to the pandemic.”
PESA represents more than 500,000 people who work in the U.S. OFS and oilfield equipment sectors.
Using BLS data, PESA, in consultation with researchers from the Hobby School of Public Affairs at the University of Houston, estimated OFS sector jobs in the United States declined by 12.5% from February to November, or from 757,516 to 665,836.
“Losses were heaviest in April, totaling 58,738 jobs — the largest one-month total since at least 2013,” according to researchers.
OFS employment in November was down year/year by almost 11%, from 747,446 jobs to 665,836. The jobs lost represented annual wages of $10.3 billion, PESA noted.
“Job losses were heaviest among companies providing support services for oil and gas extraction,” researchers said. “This portion of the OFS sector has cut 77,810 jobs during the pandemic,” or 85% of the total job losses primarily because of Covid-19’s impacts.
Even with the reported job growth, there are concerns as more lockdowns have begun related to the pandemic.
“During November, OFS employment rose 0.4% as operators worked to balance “increasing oil and gas production with the uncertainty caused by the surge in Covid-19 cases, which are causing renewed lockdowns and reduced demand,” according to the PESA team.
A report issued earlier this month on Texas energy employment trends by the Texas Independent Producers & Royalty Owners Association (TIPRO) noted other issues that the energy industry is facing.
The market destruction caused by the pandemic “has driven a large number of the baby boomer generation out of the industry, many of which will not return, thus expediting the ‘great crew change’ that was already underway,” according to TIPRO Chairman Brent Hopkins.
“Secondly, the perception of a hydrocarbon-free future has driven enrollment at the university level in disciplines critical to our industry to new lows. Just to recover to the levels of production Texas achieved at the end of 2019 will require a lot of additional manpower, and more importantly, gray matter.”
PESA estimated OFS employment using BLS data that covers the economic activities that include oil and gas extraction, construction and manufacturing. Total employment is estimated using the BLS Quarterly Census of Employment and Wages, along with jobs data reported each month by the federal agency.
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