July Employment Report: Pandemic Job Losses Near 100,000 for Oilfield Services and Equipment Sector

 

Oilfield job losses are growing. It’s plain and simple. Because of COVID-19 and the pandemic, production companies remain hesitant in many cases to resume exploration. As a result, the industry lost another 9,300 jobs in July in the U.S. bringing the total this year to nearly 100,000. And that includes in Oklahoma.

While the U.S. economy added 1.8 million jobs in July, according to the Bureau of Labor Statistics (BLS), the Oilfield Services and Equipment Employment Report found that employment in the oilfield services and equipment (OFS) sector fell by more than 9,300 jobs in July.

The monthly report, compiled and published by the Petroleum Equipment and Services Association (PESA), shows total job losses due to pandemic-related demand destruction have reached 99,253. OFS employment is down more than 118,000 jobs since July 2019 and is at its lowest point since March 2017.

Using BLS data, PESA, in consultation with researchers from the Hobby School of Public Affairs at the University of Houston, estimates OFS sector jobs in the U.S. dropped from 764,189 in February to 664,936 in July, a decline of 13%. Losses were heaviest in April, totalling 59,306 jobs — the largest one-month total since at least 2013.

OFS employment year-over-year fell from 785,106 jobs in June 2019 to 664,936 in 2020, a decline of 15.1%. The jobs lost represent annual wages of approximately $12.7 billion.

OFS job losses accelerated from 6,524 in June to 9,344 in July as COVID-19 cases surged across the country. Industry analysts anticipate additional job losses as the pandemic continues and jobs supported by emergency measures such as the Paycheck Protection Program are threatened by congressional inaction. Additionally, rising infection rates may depress economic activity as communities resume quarantines.

PESA analysis of Small Business Administration data found that approximately 180,000 OFS jobs have been supported by loans from the Paycheck Protection Program.

According to PESA’s analysis, the following states have lost 4,000 or more OFS jobs in 2020:

  1. Texas 59,200
  2. Louisiana 10,200
  3. Oklahoma 9,200
  4. Colorado 5,000
  5. New Mexico 4,500
  6. California 4,500
  7. Pennsylvania 4,400

PESA is the trade association representing the OFS sector, which includes companies involved in oilfield equipment manufacturing, drilling, well completions, pressure pumping and more. Job losses jeopardize the energy supply chain by draining the sector of the innovative men and women who develop technologies that increase efficiency, improve environmental performance, and reduce greenhouse gas emissions.

OFS employment was estimated by analyzing data published by the U.S. Bureau of Labor Statistics and covers the economic activities of OFS companies, which include oil and gas extraction, construction and manufacturing. Total employment is estimated using the Quarterly Census of Employment and Wages, published by BLS, and jobs data reported by BLS monthly.

Source: Petroleum Equipment and Services Association

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