Summer vacationers can rejoice that gas prices are $1 lower per gallon than a year ago, but there is a downside for some parts of the country—like Midland, Texas, and Casper, Wyo.,—where energy-related jobs are an important part of their local economy.
Such smaller metropolitan areas are more likely to experience a more severe economic slowdown when gas prices are low, whereas larger metro areas are more diversified and can better absorb the potential losses from the oil & gas industries.
Among the MSAs with exposure to energy related industries, the most disposed to risk are the smaller MSAs that have a large concentration of oil & gas jobs and a low industry diversification index.
A Freddie Mac analysis highlights large and small markets with high exposure to the oil & gas industry.
|Metro Area||Oil & Gas Job Concentration||Industrial Diversification Index||Metro Area||Oil & Gas Job Concentration||Industrial Diversification Index|
|Larger MSAs||Smaller MSAs|
|Houston, TX||4.8%||0.59||Midland, TX||15.7%||0.08|
|Oklahoma City, OK||4.2%||0.70||Odessa, TX||12.3%||0.14|
|New Orleans, LA||2.5%||0.61||Casper, WY||11.0%||0.25|
|Tulsa, OK||1.9%||0.62||Lafayette, LA||9.8%||0.2|
|Dallas, TX||1.1%||0.80||Greeley, CO||8.8%||0.37|
|Denver, CO||1.0%||0.80||Farmington, NM||7.9%||0.21|
|San Antonio, TX||0.9%||0.81||Houma, LA||6.7%||0.07|
|Austin, TX||0.4%||0.67||Grand Junction, CO||5.6%||0.48|
For more details, see our full paper on how oil prices impact multifamily markets.
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