What’s up? Employment, rigs and oil in Lea County.
For the first time in two years, Lea County unemployment fell below 7 percent in September, the latest data available from the New Mexico Department of Workforce Solutions and the U.S. Bureau of Labor Statistics.
For the first time in more than two years, the West Texas crude oil price topped $57 this week after dropping to just above $20 in early 2016.
Meanwhile, rig counts continue to rise, according to the Baker-Hughes website that maintains that data, four more active rigs Friday in New Mexico than last week and more than twice as many as last year. There were operating 31 rigs in the state last year, 69 on Friday.
Lea County has witnessed a mostly steady downward trend in unemployment, and upward trend in employed people, for more than a year. From a high of 10 percent in June 2016, Lea County’s unemployment rate for September of this year was reported at 6.6 percent. That is still higher than Eddy County’s 5.2 percent or the 6.1 percent for the whole state, according to the state’s data reporting agency.
The latest report indicates an increase of 1,481 people employed in the county in September to 25,141 from 23,660 a year ago in October 2016, up 6 percent. Meanwhile, the number of people unemployed dropped by 685 from 2,453 to 1,768, down 28 percent.
Gross receipts revenue for municipalities and other governmental agencies in the county, however, have yet to catch up, remaining relatively stagnant. For instance, Hobbs’ GRT revenue for the first nine months of 2016 was $35.1 million compared to $34.1 million for the same period in 2017.
Steve Vierck, CEO of the Economic Development Corporation of Lea County, acknowledging the economics is a complex discussion, said the GRT revenue likely will catch up in the next few months.
“The comeback of oil and gas is on the rise. You can see indications around town just seeing how many hotel parking lots are filled up,” he said. “We’re expecting to see GRT expand, but it’s a little early in the cycle right now. Give it a few more months … early next year, let’s say.”
The only Lea County community enjoying a significant GRT revenue increase is Jal which almost doubled from its $1.9 million in the first nine months of 2016 compared to $3.7 million in the first nine months of 2017.
Jal’s City Manager Bob Gallagher credited geography for the larger GRT checks.
“It’s geographic. Jal’s position in the northern Delaware Basin (a part of the Permian Basin) … it’s been called the largest producing basin in the United States and it’s right in our back yard,” he said. “We feel very fortunate but with that comes the responsibility to be able to make sure you are providing the services necessary that will bring people to your community.”
He noted continued work on providing housing, the potential for a general obligation bond to improve roads, a $9 million waterline replacement project to begin in December and more than double the number of restaurants available since two years ago.
“So, I think the community is doing the things we need to do to position us to take advantage of the situation because of where we are located geographically,” Gallagher concluded.
Curtis Wynne may be contacted at firstname.lastname@example.org.