New unemployment figures from the Midland, Texas metropolitan area, which includes Midland and Martin counties, jumped to 2.1% from a near-record low of 1.7% in May, according to Willie Taylor, chief executive officer of the commission's Workforce Solutions Permian Basin.
January 2019 2.3%
February 2019 2.2%
March 2019 2.1%
April 2019 1.7%
May 2019 1.7%
June 2019 2.1%
Taylor told Midland Reporter-Telegram (MRT) that layoffs have been sparked across the oil-rich-region, but since a labor shortage exists, workers can be easily replaced.
"We're blessed to be able to say, if you want to work, you can find a job. The headache is we need skilled workers," he stated.
One reason for the layoffs could be due to a slowdown in Permian Basin oil fields, would also reflect a broad industrial slowdown that is currently spreading throughout the U.S. economy.
The energy industry has been stalling for the last several quarters; crude production peaked about 100 days ago with rig counts topping last November.
A reduction in rigs is an early indicator of a decline in future output, signaling that exploration and production companies are cutting back on drilling amid an economy that is slowing.
Besides the slowdown in the energy complex, Taylor told MRT that their core focus is to expand the region's workforce. He said his office encourages millennials to pick up a skill through job training programs that are tailored to the region.
Taylor said there is an urgent need for workers in childcare and education.
"As we grow our potential workforce, and as people come in, services like childcare are really needed," he said. "We also need to bring teachers in. Young families want quality care, they want affordable care. We encourage those who want to go into childcare, we encourage cities, economic development groups, small businesses to work with us."
As Midland's unemployment rate edges up, the labor force rose to 106,549 from 106,103 in May and is about 2,000 above June 2018 levels.
For the 12 months from June 2018 to June 2019, Midland added 2,500 new jobs for a growth rate of 2.3%. The Mining, Logging, and Construction sector added 900 new jobs. Next was Trade, Transportation, and Utilities with 700 jobs and the Leisure and Hospitality sector with 600 jobs.
An industrial slowdown started making its way through the Permian Basin late last year is only now starting to translate into a slowdown for the area. With no end in sight on the downturn, the unemployment rate in Midland and Martin could move higher, this would also reflect a broader economic slowdown across the U.S. that will rear its ugly head in the second half.