Once wedded to oil, Houston economy carries on despite bust
HOUSTON — Amanda Salazar watched for a year as colleagues at the Houston-based oil rig manufacturer where she worked lost jobs, victims of the latest oil bust. She realized it was time for a change before she too got a pink slip.
So Salazar left her job as a software trainer with National Oilwell Varco for a similar position at a hospital. Even if the oil market turned around immediately, she reasoned, it might take 18 months before the industry picked up again.
For generations, anyone who lived in Houston long enough was sure to feel the pain of an oil bust. But 21st century Houston isn't like its oil-dependent predecessor. The city now has a more diversified economy, plus help from a wave of construction at its petrochemical plants. Even as the price of oil has plummeted, Houston has carried on, maintaining a jobless rate of 4.7 percent in February, slightly better than the national average.
“Houston in the broadest sense is going to do fine. It's the individual stories and the individual companies that are going to hurt and suffer,” said Patrick Jankowski, regional economist for the Greater Houston Partnership, a local business group.
For the 38-year-old Salazar, her move proved prescient. Her old department was eliminated on March 11, the same day she started at Memorial Hermann Sugar Land Hospital. The downturn resulted in about 50,000 layoffs last year of Houston-area oil and gas workers.
The oil downturn has hit many Houston-based oil companies hard, including: ConocoPhillips, which reported in February that it lost $3.45 billion for the fourth quarter of 2015, and Marathon Oil Corp., which reported a loss of $2.2 billion for 2015.
At the same time, Houston has expanded well beyond oil. In the 1980s, the city's economy was 84 percent dependent on oil and energy for its gross domestic product. That figure has dropped to about 44 percent.
Health care, construction and education added more than 65,000 jobs in 2015.
Shawn Baker, 45, was laid off last year from a job building power units for offshore oil rigs. She had trouble finding a new job, so she went into business for herself with an offbeat idea called Tantrums, a paid service that lets customers take out their frustrations by smashing plates, televisions and other objects in various rooms with sledgehammers, bats and pipes.
Her new business started off slow but recently picked up, and Baker said she's happy she took the plunge.