With oil prices rising once again, the economy of Texas is roaring. In the fourth quarter Texas’ GDP increased by 5.2%. However, Texas’s success isn’t rooted solely in its possession of oil. North Dakota, home to most of the Williston Basin saw its economy decline by 1.3%. The economics of Texas’ Permian Basin make its oil industry especially profitable compared to other shale plays around the country.
Sarah Chaney reports:
The economic recovery in Texas sheds light on how strong oil production in the Permian Basin is closely linked with other sectors, namely manufacturing, and fuels overall growth in the state and across the nation.
“It’s actually Texas that’s driving much of the national numbers on manufacturing,” said Rob Martin, U.S. economist at UBS. “In part, with the further rise in oil prices, we’re seeing other energy fields coming online. The Permian Basin was first. We’re seeing increased activity in Pennsylvania, North Dakota [and] New Mexico as those fields become more profitable.”
Texas added the most manufacturing jobs of any state from December 2016 to 2017, as payrolls rose by more than 16,000 over this period, Labor Department figures show.
Though the size of the state is part of the story, it’s not the whole story: Manufacturing employment growth in Texas outpaced national growth beginning around mid-2017 on a percentage basis, as well. In December, Texas manufacturing jobs grew 1.9% from a year earlier, while U.S. manufacturing jobs rose 1.7%.
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