OFS Sector Adds Jobs, But Faces Uncertain Outlook

America’s oilfield services and equipment (OFS) sector employment rose for a second consecutive month, adding 6430 jobs in October, according to preliminary data from the Bureau of Labor Statistics (BLS) and analysis by the Petroleum Equipment & Services Association (PESA). The U.S. economy added 638,000 jobs in October, dropping the unemployment rate to 6.9%.

BLS revisions showed the sector lost 1187 jobs in August, but added 2202 jobs in September. OFS sector employment has increased by some 8600 jobs over the past two months, according to preliminary BLS data.

The monthly Oilfield Services and Equipment Employment Report, compiled and published by PESA, estimates job losses due to pandemic-related demand destruction now total 92,302. OFS employment is down 101,087 jobs since October 2019.

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 757,516 in February to 665,214 in October, a decline of 12.2%. Losses were largest in April—58,738 jobs—the largest one-month total since at least 2013.
OFS employment year-over-year fell from 766,301 jobs in October 2019 to 665,214 in 2020, a decline of 13.2%. The jobs lost represent annual wages of approximately $12.7 billion. 

Job losses were heaviest among companies providing support services for oil and gas extraction. This portion of the OFS sector has cut 77,522 jobs during the pandemic, or 83% of the sector’s total losses.

OFS sector employment rose 1.0% in October as companies began increasing oil and gas production. The worst of the cutbacks appear to be behind the industry, however, the outlook remains uncertain because a resurgence in COVID-19 cases could suppress demand and derail economic recovery. 

PESA, the trade association representing the OFS sector, includes companies involved in oilfield equipment manufacturing, drilling, well completions, pressure pumping, and more. Losing the innovative men and women who comprise the OFS sector jeopardizes development of the technologies that increase efficiency, improve environmental performance, and reduce greenhouse gas emissions.

OFS employment is 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.

BLS data is preliminary for the two most recent months and is subject to revision.

SOURCE: The Weekly Propane Newsletter, November 19, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.