After leading the U.S. economic recovery out of recession, some of the nation’s top oil states are showing early signs of a slowdown as a result of the plunge in crude prices.
Reuters reports this morning that the first oil industry layoffs have been announced in Houston, and that real estate agents there are predicting a sharp decline—as much as 12%—in home sales next year.
Meanwhile, Fitch Ratings says Alaska’s revenue expectations in its 2015 fiscal year budget will need to be lowered by almost $2 billion because of a sharp drop in crude prices from the state’s forecast. The expected decline in revenue will widen Alaska’s budget gap to almost $3.4 billion, Fitch says.
States such as Texas, North Dakota, Alaska, Oklahoma and New Mexico are all likely to feel strains next year, Wells Fargo Securities municipal analyst Roy Eappen says in a recent report.
Meanwhile, household sentiment in Texas, Louisiana, Oklahoma and Arkansas—where memories of the catastrophic 1980s oil crash still are fresh—weakened in October more than any other region, according to a report by Decision Analyst Inc. The Texas-based research company surveys on a monthly basis thousands of homeowners in the Census Bureau’s nine regional divisions. Gov. Bobby Jindal last month announced spending cuts to road maintenance, public school testing and youth mentoring programs to help close an expected $180 million shortfall created partly by slumping oil revenues. Read the full story.
