AQUA BOOK 2016 - Page 16

A TALE OF TWO OIL BUSTS D uring a similar oil bust in the mid-1980s, Corpus Christi was hit the hardest among all metro areas in South Texas. In January 1986, oil prices plummeted from above $25 in 1985 to less than $13 a barrel. With about 6 percent of its workforce involved directly in crude oil production, Corpus Christi’s employment level shrank nearly 10 percent toward the end of that year. Its economy showed no signs of recovery until two years later, and it took another two years for the metro area to recuperate most of the jobs lost during that oil crash. A TALE OF TWO OIL BUSTS South Texas Employment Trends, 1986-1990 14 130 Corpus Christi was hit the hardest among all metro areas in South Texas. Brownsville Corpus Christi McAllen-Edinburg 120 Laredo San Antonio 110 100 90 1986 1987 1988 1989 1990 Sources: Bureau of Labor Statistics, and author's calculations. Despite the setback in the second half of 2015, the level of local employment was still near the levels in mid-2014 when oil prices reached the highs of about $120. Oil production continued to grow until June 2015. The setback for Corpus Christi’s labor market so far has also appeared to be modest by comparison. Yet drawing on the historical data of the 1980s, the downtrend was probably not over by the end of 2015. Rather it might take another six months through mid-2016 for the effects of the oil crash to work its way into the rest of the local economy. If oil prices recover in the immediate term, to prices where profitability of Eagle Ford wells is clear (estimated at $40-50/ barrel), it is likely that the economic turnaround could be very rapid. Annual Review of South Texas Economy