Impact on Dallas of Drop in Oil Prices - Insight? (Houston: 2015, employment)

[Transplanted99]

Apologize if this has been discussed elsewhere, but a search did not find this exact question (there is a related thread on Houston, which is very dependent on O&G industry, but not on Dallas).

Anyone here who has the broader picture of the economy of Dallas have any insight/prediction/links to reliable articles/etc. of the impact the recent (and future) drop in oil prices will have on the local economy?

It will undoubtedly slow the economy somewhat, but is it likely to be a major slowdown? How dependent is the Dallas economy on O&G / how diversified is the Dallas economy?

I ask in context of recent announcements some pretty big influx of business (e.g. State Farm, Toyota) and migration of workers that come with that.

[Philip T]

mho.

Dallas and Texas are both dependent on Growth. THAT is the model. Just standing still is/would be sinking. Not saying that is a good thing for personal taste, just observation.

New Construction, New Roads, New Building -- in General, the Whole Economy are ALL Dependent on Growth, Growth, Growth.

In the long term there are only two things that I have found natural models which require Growth for the sake of Growth -- Cancer and Morbid Obesity.

Texas has done well -- again just my observation -- from two things within/since the onset of the "Great Recession." Fracking (as has North Dakota) AND folks moving here because the areas they were coming from were economically going under.

First -- As you observed, some of the Fresh Blood money into Texas, and Dallas, as well is from Frack. That is bound to wind down.

Second -- Most of those "Going Under" areas that folks have been moving from are harmed by High Oil Prices, and do better under Cheap Oil -- like now. That can slow or stop the Growth, Growth, Growth influx.

Combining all that -- with the observation that just Holding our Own (in a Growth Required Model) means sinking.

Overall -- I am scoring the whole area as Risky. I have played this before. Rode it down in 2008. This Time -- The day Oil went under $75 -- back in November -- I was taking on Water (not Oil) Projects, ONLY.

Still finishing out on-going, fully-funded Oil and NG Projects -- but not counting on any new.

[sericrafter]

Dallas is not as dependent on oil and gas as Houston or some other parts of Texas. OPs concern seems to be mainly with Dallas (DFW) economy. There might be some slowing down effects overall on Texas, even less so over DFW.. well put in the below article -just a 'tap on breaks'.

Fed economist: Low oil prices will slow state

[Taynxtlvl]

I think Dallas Today (2015) is a lot more diverse than the Dallas of yesterday (1980's) And as diverse as any major city in the US. I think its okay for the time being.

[EDS_]

O&G makes up 3.1% of Texas employment and roughly half that percentage in Dallas. Low oil prices will definitely slow the economy a bit over time. However, I'd argue that so long as the slow down is not too quick or too deep it's like a good thing for many.

It'll be interesting to see what OPEC (the Saudis and UAE in particular) do vis a vis prices over the longer term, say 18mos-2yrs. The Saudis Ghawar field in particular is like an underground lake of oil their extraction costs are really low coupled with the fact that they have large cash reserves can sit on cheap oil for many years. Other OPEC members do not have those luxuries.

[TurtleCreek80]

Originally Posted by Taynxtlvl

I think Dallas Today (2015) is a lot more diverse than the Dallas of yesterday (1980's) And as diverse as any major city in the US. I think its okay for the time being.

I agree with this. A bear stock market would impact the metroplex much more broadly than just oil prices. However, sustained oil prices below a certain mark are bad for the overall economy (as stock market commodities and as major employers and creators of "trickle down" jobs). I don't know enough to know the magic price, but I'd imagine it's a good $15-20 above current oil prices.

[M.abus]

Some people were upset when the oil industry started consolidating in Houston and leaving Dallas. Maybe not so much now.

[Pagusas]

I'm not sure about anyone else, but I'd be happy if oil prices stayed around 2.00 No lower, no higher. Its easy on the budget and hopefully ok on the economy as a whole.

[EDS_]

Originally Posted by M.abus

Some people were upset when the oil industry started consolidating in Houston and leaving Dallas. Maybe not so much now.

Which companies left Dallas? Exxon is still based here and many of the super wealthy moguls are here.

[EDS_]

Originally Posted by Pagusas

I'm not sure about anyone else, but I'd be happy if oil prices stayed around 2.00 No lower, no higher. Its easy on the budget and hopefully ok on the economy as a whole.

The world economy would die within a week if oil went to $2.00bbl (no country can extract at that price). Did you mean gas at $2.00 per gallon?