New data from LinkedIn’s June Workforce Report shows increased hiring in the oil and energy sector, impacting oil-centric cities like Houston, TX. This month’s data also illustrates how industry-dependent cities are heavily impacted by the highs and lows of business cycles.
Oil industry turns up the heat on hiring – Nationally, across all industries, gross hiring in the U.S. was 4.5% higher than in May 2017. Seasonally-adjusted national hiring was up 5.3% in May from April 2018. Gross hiring in the oil and energy industry, which rose 5.2% year-over-year, correlates closely with oil prices. When oil prices dipped between January 2015 and February 2016, industry hiring followed suit—and a few months after oil prices began to rise, so did hiring.
Houston’s skills surplus is tightening up accordingly – As Houston‘s job market has rebounded, the surplus of people with skills typically needed to fuel the oil and energy industry—like petroleum engineering, energy, and geology skills—has reduced, from over 16,000 people in February 2016, to under 14,000 people in February 2018. This is another signal that hiring is starting to pick up in a meaningful way as Houston’s core industry restabilizes.
When a city is synonymous with a single industry, boom and bust cycles have outsized impact – Whether it’s San Francisco and the tech industry or Detroit and the car industry, history shows that when industries go bust, reliant cities can be hit especially hard. Odessa–Midland, TX, one of the U.S.’s key production hubs for crude oil, is the latest example: its reliance on the energy sector makes it incredibly sensitive to the oil industry’s fortunes. With oil prices on the rise, talent inflows to this oil boom-town have picked up, particularly from the three largest Texas cities—Houston (+44% since September 2017), Dallas (+750%), and Austin (+255%).