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..... 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. 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. 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? 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 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/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. 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. 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% 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 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. 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 Link to comment Share on other sites More sharing options...
arche_757 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. 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. 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. 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. 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 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 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. 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. 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 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 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. Link to comment Share on other sites More sharing options...
DrLan34 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." 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). 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. 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 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! 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. 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 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? Link to comment Share on other sites More sharing options...
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