Dr. Terry Clower, director of the University of North Texas’ Center for Economic Development and Research, says that the weakening of oil and gas industry will likely have negative effects on the North Texas overall economy.
“Thousands of gas-field jobs have disappeared in 2009 as natural gas prices have fallen below $4. Unfortunately, this is also sparking layoffs in other sectors of the economy as drillers and gas field service providers slow down operations and spend less for goods and business services,” says Clower.
Clower says that drilling and production activity in the Barnett Shale helped insulate North Texas from the national economic downturn, but that the loss of employment in the sector will likely slow the pace of economic recovery in the region. He also says that declining royalty payments to mineral rights holders will likely exacerbate the already weak regional retail sales.
Clower predicts that the oil and gas industry, and subsequently the North Texas economy, will show improvement during the fourth quarter of 2009.
“As the economy picks up steam, demand for natural gas will increase and prices should firm up at significantly higher levels. Here’s hoping for a cold, early winter.”