Bleak outlook in Houston could provide insight into what hurdles are ahead for Calgary
Posted Feb 8, 2016 8:12 am.
This article is more than 5 years old.
A look at what’s happening in the Gulf Coast energy sector could be a window into what’s ahead for Alberta’s struggling economy.
The city of Houston is seeing two sides to the economic downturn, with the white collar west feeling the pinch of the price of oil, while its east side reaps the benefits of the petrochemical sector.
Dr. Bill Gilmer, the director of regional forecasting for the University of Houston says the NDP’s new program to finance petrochemical plants will help boost the economy, but it’s late in the petrochemical game.
If you look at what’s happening in Houston, thousands of layoffs in the oil and gas sector are just temporarily being offset by hiring to build petrochemical facilities.
“Twenty five hundred to 3,000 construction workers on site at the peak moment of construction, but then as you look at the long term employment, there might be one hundred jobs at the plant,” he said.
Last week, the NDP said its Petrochemicals Diversification Program would create 3,000 jobs during construction of plants and 1,000 more once plants begin operations.
Much like Houston, Calgary has already seen a large share of cuts within major oil companies.
Dr. Gilmer says the stain of the falling price of oil is spilling onto to businesses in Houston that feed off the energy sector.
He says retail and commercial businesses are closing and struggling to keep the lights on, and in a few months contractors will be out of work.
He also points to Houston’s struggling housing sector, which continued to build luxury homes as it expected executives and high salary engineers to keep spending money.
