plumber2 Posted February 28, 2015 Share Posted February 28, 2015 http://www.bizjournals.com/houston/morning_call/2015/02/chevron-to-move-jobs-to-houston.html The San Ramon, California-based company said Feb. 20 it will move 100 jobs from its corporate headquarters to Houston in 2015, the San Jose Mercury News reports.That may be good news for Houston, but as an economy as a whole this type of jobs relocation means nothing. No permanent jobs are created. Nothing was produced. Nothing new was invented. No competition to see who has a better product. Just sliding one asset from one side of the table to another. Well, maybe the moving companies and real estate compnaies made a little bit out of the deal, but the net gain on the whole economy is nothing. Quote Link to comment Share on other sites More sharing options...
arche_757 Posted February 28, 2015 Share Posted February 28, 2015 That may be good news for Houston, but as an economy as a whole this type of jobs relocation means nothing. No permanent jobs are created. Nothing was produced. Nothing new was invented. No competition to see who has a better product. Just sliding one asset from one side of the table to another. Well, maybe the moving companies and real estate compnaies made a little bit out of the deal, but the net gain on the whole economy is nothing.That's 100 families who need homes. Aside from that and the moving companies you mentioned it won't be a big deal. Not for Inner Loop Houston at least. Now if this was Huntsville or even Galveston - big news. Quote Link to comment Share on other sites More sharing options...
placoors Posted March 1, 2015 Share Posted March 1, 2015 Interesting NYT piece: http://mobile.nytimes.com/2015/03/01/opinion/sunday/as-oil-prices-fall-houston-shudders.html?referrer=&_r=1 3 Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 1, 2015 Share Posted March 1, 2015 There are reports of $20 oil this year for a protracted time before moving higher.There are reports that the current price is "about right" for a protracted time.There are reports of $70 oil this year for a protracted time before moving even higher Who is right?I don't know.What I do know is that if one of the first two items listed actually happens, Houston will face significant problems. All the talk about "ports and doctors" earlier in this thread will mean nothing if houston faces oil prices in the $20's and $30's for, say, 2 years. Quote Link to comment Share on other sites More sharing options...
Dakota79 Posted March 2, 2015 Share Posted March 2, 2015 I thought this had some good points. https://www.bisnow.com/national/news/commercial-real-estate/5-reasons-not-to-worry-about-cre-43429?single-page#ath Quote Link to comment Share on other sites More sharing options...
arche_757 Posted March 2, 2015 Share Posted March 2, 2015 ^It does. The problem for most of us - we don't have the financial backing of a TrammelCrow. 2 bad years will tank many families. 2 bad years will cause architectural/engineering/construction firms that *just* weathered the 2008-2010/11 recession (the worst since the Depression for AEC companies) to go belly up. Frankly I'm concerned, and my firm doesn't do anything that's directly connected to oil/gas. Houston's slow-down hurts all that are in construction. That's a fact. Hopefully the new schools/retail/hospitals etc. that are needed for all these new people will keep most of us busy for the next year or two? 1 Quote Link to comment Share on other sites More sharing options...
jgriff Posted March 2, 2015 Share Posted March 2, 2015 I just got out of a meeting where I was informed that an HDPE project we were bidding on has been canceled due to low oil prices. There goes the theory that oil prices don't affect downstream projects. Quote Link to comment Share on other sites More sharing options...
Dakota79 Posted March 2, 2015 Share Posted March 2, 2015 I just got out of a meeting where I was informed that an HDPE project we were bidding on has been canceled due to low oil prices. There goes the theory that oil prices don't affect downstream projects.What's HDPE? Quote Link to comment Share on other sites More sharing options...
Houston19514 Posted March 2, 2015 Share Posted March 2, 2015 I just got out of a meeting where I was informed that an HDPE project we were bidding on has been canceled due to low oil prices. There goes the theory that oil prices don't affect downstream projects. What's HDPE? High Density Polyethylene. I've been trying to come up with a rationale for canceling a project because the feedstock prices have dropped. Wouldn't that make the project all the more feasible/lucrative? (Unless of course this particular project was targeting the O&G industry as its customer.) Quote Link to comment Share on other sites More sharing options...
swtsig Posted March 2, 2015 Share Posted March 2, 2015 High Density Polyethylene. I've been trying to come up with a rationale for canceling a project because the feedstock prices have dropped. Wouldn't that make the project all the more feasible/lucrative? (Unless of course this particular project was targeting the O&G industry as its customer.) or there are supply issues in the mid-to-long term, perhaps? i really don't know but it's infinitely more complex than current market prices. remember, many of these project have to project 3-5 years into the future. 1 Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 3, 2015 Share Posted March 3, 2015 Doctors and Ports do have an impact on Houston but they DO NOT offset the effect of energy. Much of the "boom" was energy related so much of the "downturn" is also related to energy. If oil stays "low" for another six months, real pain will start. If it stays "low" for 2 years Houston will have significant problems.I love the part in the story above: "houston wins with high oil and low oil...... People are coming to buy real estate bargains and aren't finding any......" Really? No kidding..... Wait six months.Then, when the buyers swoop in and buy hat commercial building for $1m that was purchased for $1.3m in 2013, tell me about that "winning" again? Who won? Clearly not the guy who bought it for $1.3m. Maybe the commercial real east set brokers win...... Oh..... Quote Link to comment Share on other sites More sharing options...
jgriff Posted March 3, 2015 Share Posted March 3, 2015 High Density Polyethylene.I've been trying to come up with a rationale for canceling a project because the feedstock prices have dropped. Wouldn't that make the project all the more feasible/lucrative? (Unless of course this particular project was targeting the O&G industry as its customer.)I don't quite understand it either. The only thing I can think of is that the capex budget for this client was cut because of low oil prices. Maybe they cut capex across the board to try to keep their EPS up during the downturn. Quote Link to comment Share on other sites More sharing options...
samagon Posted March 3, 2015 Share Posted March 3, 2015 If the company that was building that plant is also in the upstream business they are probably going turtle mode so the line sheets look good for investors. Quote Link to comment Share on other sites More sharing options...
Trae Posted March 3, 2015 Share Posted March 3, 2015 NM I probably said too much...Why did nobody quote this man before he edited out his inside scoop? 1 Quote Link to comment Share on other sites More sharing options...
DrLan34 Posted March 4, 2015 Share Posted March 4, 2015 http://www.houston.org/pdf/research/quickview/Economy_at_a_Glance.pdf Quote Link to comment Share on other sites More sharing options...
DrLan34 Posted March 4, 2015 Share Posted March 4, 2015 (edited) http://www.houston.org/pdf/research/quickview/Employment-Forecast.pdf Energy Three points underscore the importance of energy to Houston: • The U.S. Bureau of Economic Analysis estimates that mining (in Houston, almost entirely oil and gas extraction) accounted for $102.7 billion, or 19.8 percent of Houston’s GDP, in ’13. Sectors that Houstonians typically identify as part of the energy industry—chemicals, refining, oil field equipment manufacturing, fabricated metal products, pipelines and engineering—contributed another $83.9 billion, or 18.3 percent, to the total. Broadly defined, energy accounted for $186.6 billion, of 38.1 percent, of the region’s output in ’13. • A recent McKinsey & Co. study conducted on behalf of the Partnership found that 70 percent of Houston’s tradable sectors are energy-related. “Tradable” refers to goods and services sold outside the region. Growth in tradable sectors, also known as the economic base, spurs growth in the secondary sectors (e.g., retail, restaurants, health care). • The average annual compensation in Houston’s mining sector was $185,000 in ’13, according to the Quarterly Census of Employment and Wages. Compensation for all other industries averaged $64,500. Translation: One energy job has the purchasing power of three non-energy jobs in Houston. Edited March 4, 2015 by DrLan34 1 Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 4, 2015 Share Posted March 4, 2015 http://www.houston.org/pdf/research/quickview/Economy_at_a_Glance.pdfThat is a very good, balanced report. Thank you for posting. Quote Link to comment Share on other sites More sharing options...
arche_757 Posted March 4, 2015 Share Posted March 4, 2015 Something that doesn't get mentioned --- just how many of the construction jobs in this region are directly tied to energy? I'll wager at least 40% 1 Quote Link to comment Share on other sites More sharing options...
Slick Vik Posted March 4, 2015 Share Posted March 4, 2015 Long article in chronicle about nabors layoffs and anandarko slashing projects http://www.houstonchronicle.com/business/article/Oil-s-bounce-can-t-stop-industry-pain-6113278.php Quote Link to comment Share on other sites More sharing options...
arche_757 Posted March 4, 2015 Share Posted March 4, 2015 ^Nabors moved their HQ to either Switzerland or the Bahama's several years ago...of course the majority of their corporate employees are here in Houston. Exxon also slashed their budget - but I think some of the bigger oil companies are simply being "protective" at this time (at least how my simple mind reads things) and projecting less growth for the rest of this year and 2016. 2017 is the unknown. Lets recall that when Nabors says "....we're cutting 6,000 jobs..." that's not all in Houston! That's everywhere. A lot of the energy firms cut the jobs in the MidEast first, then trimmed fat back home. Or so I've seen. Quote Link to comment Share on other sites More sharing options...
Slick Vik Posted March 4, 2015 Share Posted March 4, 2015 1/3 is a huge budget cut Quote Link to comment Share on other sites More sharing options...
arche_757 Posted March 4, 2015 Share Posted March 4, 2015 (edited) 1/3? Exxon? I read it to be 12%. Never mind. I think you were refering to Anadarko. Oh well. Huge number for them to cut, but they're also taking one of the most pesimistic approaches from any of the energy firms cutting costs. I think it odd they'd go to that extreme, yet firms like Halliburton (who rely on actually drilling) aren't cutting figures to that extent. Probably because Anadarko is not as strong of a company as previously thought. Also, not all the jobs at places like Nabors are people in Houston. Nor are they jobs we might think they are. Some are guys pushing hand-trucks (as the English would say) in a warehouse making whatever minimum wage is+$2 extra. Its not all doom and gloom, but its certainly alarming how quickly things crapped out here in Houston. Sad really that the rest of the local economy couldn't have started enough momentum to really augment the slip in energy spending. Oh well. That's reality. Edited March 4, 2015 by arche_757 Quote Link to comment Share on other sites More sharing options...
Slick Vik Posted March 4, 2015 Share Posted March 4, 2015 1/3? Exxon? I read it to be 12%. Never mind. I think you were refering to Anadarko. Oh well. Huge number for them to cut, but they're also taking one of the most pesimistic approaches from any of the energy firms cutting costs. I think it odd they'd go to that extreme, yet firms like Halliburton (who rely on actually drilling) aren't cutting figures to that extent. Probably because Anadarko is not as strong of a company as previously thought.Also, not all the jobs at places like Nabors are people in Houston. Nor are they jobs we might think they are. Some are guys pushing hand-trucks (as the English would say) in a warehouse making whatever minimum wage is+$2 extra.Its not all doom and gloom, but its certainly alarming how quickly things crapped out here in Houston. Sad really that the rest of the local economy couldn't have started enough momentum to really augment the slip in energy spending. Oh well. That's reality.Actually anandarko is trying to protect its workforce as much as possible by not laying off anyone thus far but that's easy since they use so many contractors. As far as projects dying off when the extra money isn't there it makes sense as the logical thing to do. Quote Link to comment Share on other sites More sharing options...
arche_757 Posted March 4, 2015 Share Posted March 4, 2015 I never said it wasn't logical. Unfortunate. I've never been too impressed with Anadarko...from their architecture on up. Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 4, 2015 Share Posted March 4, 2015 Something that doesn't get mentioned --- just how many of the construction jobs in this region are directly tied to energy? I'll wager at least 40%Or more. Quote Link to comment Share on other sites More sharing options...
Slick Vik Posted March 5, 2015 Share Posted March 5, 2015 I never said it wasn't logical. Unfortunate.I've never been too impressed with Anadarko...from their architecture on up.They use a lot of contractors so as to prevent layoffs as much as possible Quote Link to comment Share on other sites More sharing options...
Slick Vik Posted March 5, 2015 Share Posted March 5, 2015 Or more.70% is what I've been told Quote Link to comment Share on other sites More sharing options...
jgriff Posted March 5, 2015 Share Posted March 5, 2015 They use a lot of contractors so as to prevent layoffs as much as possibl It doesn't really matter if they are contractors or not. A lot of those contrators are in Houston and it's still people being laid off. Quote Link to comment Share on other sites More sharing options...
samagon Posted March 5, 2015 Share Posted March 5, 2015 agreed jgriff, contractors just make it easier/cheaper to downsize for a company. Quote Link to comment Share on other sites More sharing options...
Dakota79 Posted March 8, 2015 Share Posted March 8, 2015 It might slow a bit for a while, but this article reminds us we won't be down for long:http://m.bizjournals.com/houston/morning_call/2015/03/texas-to-see-explosive-growth-population-to-double.html Quote Link to comment Share on other sites More sharing options...
jgriff Posted March 8, 2015 Share Posted March 8, 2015 It might slow a bit for a while, but this article reminds us we won't be down for long:I agree. We may be down for a few years but it had to happen sooner or later. The pay rates of the people I hire and work with have gotten ridiculous. There will be permanent damage though. We are sending much more work overseas in an effort to lower costs. Entire career paths that used to exist in Houston will end or be greatly diminished because of this downturn. There are people in India who will work for $2 an hour to do things we pay $90 an hour for here.http://m.bizjournals.com/houston/morning_call/2015/03/texas-to-see-explosive-growth-population-to-double.html Quote Link to comment Share on other sites More sharing options...
Dakota79 Posted March 8, 2015 Share Posted March 8, 2015 It might slow a bit for a while, but this article reminds us we won't be down for long:I agree. We may be down for a few years but it had to happen sooner or later. The pay rates of the people I hire and work with have gotten ridiculous. There will be permanent damage though. We are sending much more work overseas in an effort to lower costs. Entire career paths that used to exist in Houston will end or be greatly diminished because of this downturn. There are people in India who will work for $2 an hour to do things we pay $90 an hour for here.http://m.bizjournals.com/houston/morning_call/2015/03/texas-to-see-explosive-growth-population-to-double.htmlHey! I didn't write that quote. All I wrote was we won't be down for long. Jgriff, did you hijack me? The rest of the quote starting with "I agree" was not me. Quote Link to comment Share on other sites More sharing options...
DrLan34 Posted March 9, 2015 Share Posted March 9, 2015 (edited) http://www.usatoday.com/story/money/columnist/2015/03/08/loveless-conocophillips-us-oil-exporting/24431393/ "What happens when there's nowhere to put oil?If we run out of space for new oil, the impact will be felt up and down the industry. Producers in the Bakken shale, Eagle Ford shale, Gulf of Mexico, and elsewhere will have nowhere to ship oil, and prices will plunge as a result of the growing surplus. It's simple supply and demand." Edited March 9, 2015 by DrLan34 Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 9, 2015 Share Posted March 9, 2015 http://www.usatoday.com/story/money/columnist/2015/03/08/loveless-conocophillips-us-oil-exporting/24431393/"What happens when there's nowhere to put oil?If we run out of space for new oil, the impact will be felt up and down the industry. Producers in the Bakken shale, Eagle Ford shale, Gulf of Mexico, and elsewhere will have nowhere to ship oil, and prices will plunge as a result of the growing surplus. It's simple supply and demand."Yep. This is the real issue in the short-term and why some analysts are predicting oils in the $20's or lower later this year.The issue for houston ,IMO, is not the price of oil per se but rather how long it stays at the price. 2-5 years of $100- $125 oil was enough to cause a boom. What will 2-5 years of oil at $20-$50 cause? (Assuming that price scenario happens, which it may not). Quote Link to comment Share on other sites More sharing options...
jgriff Posted March 9, 2015 Share Posted March 9, 2015 Hey! I didn't write that quote. All I wrote was we won't be down for long. Jgriff, did you hijack me? The rest of the quote starting with "I agree" was not me.Sorry, was on my iPhone. My reply went into the quote section. Quote Link to comment Share on other sites More sharing options...
Slick Vik Posted March 12, 2015 Share Posted March 12, 2015 Home sales down again in February Quote Link to comment Share on other sites More sharing options...
Howard Huge Posted March 12, 2015 Share Posted March 12, 2015 Home sales down again in FebruaryIts finally turning back into a buyers market I heard! Quote Link to comment Share on other sites More sharing options...
samagon Posted March 12, 2015 Share Posted March 12, 2015 Inventory is still stupid low. So not a buyers market yet. Quote Link to comment Share on other sites More sharing options...
Slick Vik Posted March 12, 2015 Share Posted March 12, 2015 Inventory is still stupid low. So not a buyers market yet.Agreed Quote Link to comment Share on other sites More sharing options...
Howard Huge Posted March 12, 2015 Share Posted March 12, 2015 Inventory is still stupid low. So not a buyers market yet.When then? Quote Link to comment Share on other sites More sharing options...
Slick Vik Posted March 12, 2015 Share Posted March 12, 2015 When then?Matter of time if oil prices stay this low Quote Link to comment Share on other sites More sharing options...
placoors Posted March 16, 2015 Share Posted March 16, 2015 Interesting article from The Economist: http://www.economist.com/news/united-states/21646221-americas-fastest-growing-metropolis-faces-up-cheaper-oil-life-sprawl 1 Quote Link to comment Share on other sites More sharing options...
Subdude Posted March 31, 2015 Share Posted March 31, 2015 This sounds suboptimal: The crash in oil prices is hammering the Texas economy. The latest manufacturing outlook index from the Dallas Fed plunged again in March, to -17.4 from -11.2 in February, indicating deteriorating business conditions in the state.Expectations were for the index to show a reading of -9.But the most important part of this report is the commentary from Texas business leaders, who have given an on-the-ground picture of how the decline in oil prices is affecting one of the country's economies most driven by oil. In March the tune didn't change, as it sounds as if things are still tough in Texas. Read more: http://www.businessinsider.com/dallas-fed-manufacturing-report-march-30-2015-3#ixzz3VyceeK8k Quote Link to comment Share on other sites More sharing options...
Triton Posted April 3, 2015 Share Posted April 3, 2015 I know no one will like me saying this but we may be hit by a double whammy. Forget the Texas economy, there are signs in the U.S. economy of a slight slowdown as seen in the trade markets, construction, and consumer spending as well. Also, with the potential of Iran coming back online in the oil market, we may see a further decrease in the price of oil. Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted April 3, 2015 Share Posted April 3, 2015 I know no one will like me saying this but we may be hit by a double whammy. Forget the Texas economy, there are signs in the U.S. economy of a slight slowdown as seen in the trade markets, construction, and consumer spending as well. Also, with the potential of Iran coming back online in the oil market, we may see a further decrease in the price of oil.Yep.Folks, there is a full-on conflagration in the Middle East right now and oil hasn't moved. A decade ago, oil would have surged on the uncertainty. The fact that it really hasn't moved much should make you shiver.Times, they are a'changing' Quote Link to comment Share on other sites More sharing options...
Sparrow Posted April 3, 2015 Share Posted April 3, 2015 While cheap oil may not be good for those in that sector of the economy, how many folks really want to see gas at +$4 a gallon? Cheap oil is great for the auto industry. Drive baby, drive. Cheap oil is great for the housing industry... and retail... and discretionary incomes in general. Watch what you wish for when you hope for higher oil prices... Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted April 3, 2015 Share Posted April 3, 2015 While cheap oil may not be good for those in that sector of the economy, how many folks really want to see gas at +$4 a gallon? Cheap oil is great for the auto industry. Drive baby, drive. Cheap oil is great for the housing industry... and retail... and discretionary incomes in general.Watch what you wish for when you hope for higher oil prices...Agreed.And that was Triton's point. The U.S. economy is showing signs of slowing DESPITE having oils prices less than half of a year ago. That is the double whammy he is speaking of. 2 Quote Link to comment Share on other sites More sharing options...
samagon Posted April 6, 2015 Share Posted April 6, 2015 isn't most of the slowdown thanks to the dollar being as strong as it is (and has been)? not only are imported good cheaper in America, but American goods are more expensive overseas as well. and then the cold weather was supposed to have been a reason for a slower 1st quarter in general. Quote Link to comment Share on other sites More sharing options...
RandomHero Posted April 9, 2015 Share Posted April 9, 2015 http://www.bizjournals.com/houston/blog/breaking-ground/2015/04/energy-corridor-office-space-doing-better-than.html What's this? The sky isn't falling? The tone of the article suggests that HBJ can hardly comprehend that end of days hasn't arrived yet as they have been predicting for months. Quote Link to comment Share on other sites More sharing options...
jgriff Posted April 9, 2015 Share Posted April 9, 2015 We had a big project cancelled this week. About 100 people in Houston will lose their jobs. We'll also be exiting a building in the energy corridor. Quote Link to comment Share on other sites More sharing options...
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