Oilfield Services and Equipment Sector Employment Continues Decline in May

Research by the Petroleum Equipment and Services Association (PESA) found that employment in the oilfield services and equipment (OFS) sector fell by nearly 15,000 jobs in May, bringing total job losses due to pandemic-related demand destruction to more than 84,000. OFS employment is down 105,000 jobs from May 2019 and now stands at its lowest point since 2017.

Using Bureau of Labor Statistics (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 679,281 in May, a decline of 11.1%. The loss of 59,666 jobs in April was the greatest.

OFS employment year-over-year fell from 785,106 jobs in May 2019 to 679,281 in 2020, a decline of 13.5%.

The jobs lost represent estimated annual wages of approximately $11.4 billion. Industry analysts anticipate additional job losses in the coming months as the oil and gas industry continues cutting production by shutting in wells and reducing rig counts.

Due to limitations within the BLS data and the difficulty of accurately tracking and categorizing furloughs, this analysis likely is significantly underestimating actual job losses within the OFS sector. Many of these companies have 25-50% of their workforce on furlough currently. Some of the largest companies in the sector expect to lay off thousands in the near future.

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 could 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: The Weekly Propane Newsletter, June 25, 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.