North Dakota had 473,400 people who were employed in November. That was 21,800 people more than the same month a year ago. North Dakota also had the nation’s lowest unemployment rate of 2.7%. However, there is probably no other state where such a large percentage of those jobs are at risk. The reason is $55 a barrel oil.
It is no secret that North Dakota is among the states where the largest percentage of the population could be out of jobs within a few months. Because of the size of the work force, even the loss of a few thousand jobs could sharply change the unemployment rate. Every 4,100 jobs makes the rate tick up 0.1%.
Just over 21% of North Dakota’s total 2013 gross domestic product (GDP) of $49.77 billion comes from natural resources and mining. Not all the $10.6 billion in natural resources and mining is due to oil and gas extraction, but that is as granular as the federal data allows.
The complete details that describe how much North Dakota’s GDP depends on oil production are not available. However, much anecdotal information supports this theory. A large number of new jobs have been added because of fracking in the area known as the Bakken formation.
Local media has begun to express anxiety about the jobs market in North Dakota next year. According to the Bismark Tribune:
A drastic fall in oil prices means the booming sound from the Bakken will be muffled next year and at least one commodity expert thinks oil values will remain low for another two to three years.
What it all means for North Dakota’s oil economy is far from certain, but one of the Bakken’s major drillers says half the drilling rigs could be shut down as the industry takes a wait-and-see approach to the market.
Lynn Helms, director of the Department of Mineral Resources, said recently in his monthly update that the rig count — now at 181 — could fall by as many as 30 to 45 next year.
The explosion of jobs in the energy business in North Dakota will take a hiatus, at best. The job creation momentum is about to swing the other way in North Dakota.
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