US Job Numbers Up for OFS and Equipment Industry, But Outlook Remains Unclear
The increase in OFS and equipment sector jobs over the past 2 months came amid higher oil and gas production. But increases in COVID-19 cases are causing uncertainty about when and how much demand will rise.
US employment rose for a second consecutive month in October for the US oilfield services (OFS) and equipment sector, according to early data from the Bureau of Labor Statistics (BLS) and an analysis by the Petroleum Equipment and Services Association (PESA).
BLS data showed OFS sector employment up by about 8,600 jobs in September and October, with October seeing a 1% increase, as companies increased oil and gas production. Revisions showed the sector lost 1,187 jobs in August and added 2,202 jobs in September. The increase in OFS employment was part of the 638,000 jobs the US added in October, which decreased the overall unemployment to 7%.
PESA said while the worst of the cutbacks appear to be behind the industry, its too early to tell what the increase in jobs means.
“The sharp increases in COVID-19 cases is causing a lot of uncertainty about when and how much demand will rise, which will allow companies to boost production and add jobs,” said Kevin Broom, PESA’s lead researcher and PESA director of communications and research.
Broom added that prospects for November and December are uncertain, but as companies add rigs and increase production, OFS sector employment is likely to rise.
Although OFS employment was up for September and October, the energy industry is still seeing layoffs. ExxonMobil recently said it will cut 1,900 jobs mostly at its Houston campus due to COVID-19, while Chevron said it would cut 15% of its global in-house staff, and 25% of its Noble Energy staff.
PESA’s monthly report estimated job losses due to COVID-19 and weak demand total 92,302, with OFS employment down 101,087 since last October.
Using BLS data, PESA, in consultation with researchers from the Hobby School of Public Affairs at the University of Houston, estimated US OFS sector jobs fell by 12.2% from 757,516 in February to 665,214 in October. April had the heaviest loss at 58,738 jobs, the largest monthly total since 2013.
OFS employment year-over-year fell 13.2% from 766,301 jobs in October 2019 to 665,214 in 2020, representing annual wages of approximately $12.7 billion.
Job losses were heaviest among companies providing support services for oil and gas extraction, which cut 77,522 jobs during the pandemic—83% of the sector’s total losses. The next biggest category was oil and gas pipeline construction (11,210), followed by the manufacturing of oil and gas extraction machinery (3,330).