There is an emerging economic boom in Ohio thanks to the Utica Shale. However, while the region is beginning to see increased economic activity, one thing is clearly lacking: a coinciding increase in hiring. That has many Ohioans wondering where all the promised jobs are going.
First, let’s take a look at the numbers. According to a study by Cleveland State University, the 13 counties with the strongest shale activity saw sales activity rise by 21% compared to last year. That’s more than three times the growth being experienced by the rest of the state. You would think that with such a dramatic increase in sales that there would be some trickle down into employment.
That has simply not been the case, as employment is up just 1.4% in those same counties. That number is virtually on par with the 1.3% growth experienced by the rest of the state. The problem, according to the study, is that “[employment] growth associated with exploration and early stage production may have been captured by out-of-state workers that already possessed the necessary skills and training.” The good news, according to the study: “Employment growth should accompany the increased scale and scope of shale activities in the coming years.”
What’s likely happened is that workers from the dry gas drilling area of the Marcellus in Pennsylvania simply crossed state lines looking for work when drilling in that state slowed down. Pennsylvania initially saw the same thing when the Marcellus began to emerge a few years ago; its highways were filled with Oklahoma and Texas license plates. Because of the skills and training required, companies have been forced to source employees from out of the area.
That being said, at some point the trickle-down effect will be seen through employment growth in the state. There are massive amounts of infrastructure being built with much more needed in the coming years. As infrastructure comes on line it will help fuel the growth of production budgets at exploration and production companies. In fact, the year ahead should be very promising.
For example, Chesapeake Energy Corporation (NYSE:CHK) said it expects to see its production growth accelerate as two new third-party natural gas processing plants come on line. The company is devoting 11% of its more than $6 billion capital budget to the region. It’s not alone in its plans to grow in the Utica.