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