The 17-county Permian Basin is economically unique compared to peer regions throughout the state and nation. The heavy concentration of Oil and Gas deposits has attracted investment and spurred more than a century of sustained exploration and production activity that dwarfs that of most regions, even those considered to be primarily energy economies. Throughout its history, the region has reaped significant economic benefits from its natural resources, developing a robust and mature export-oriented energy cluster that has generated both tremendous individual wealth and significant Gross Regional Product (GRP). State, regional, and local governments, economic developers, and investors have capitalized on these assets and built an infrastructure to support the unique local economy.
- The region's Transportation System is robust, multi-modal and efficient. The Permian Basin is characterized by a well developed (if taxed) roadway system that includes two east-west interstates (I-10 and I-20), numerous state highways, and county/local roads that effectively facilitate transit of goods and raw materials. The rail system is mature, with the ability to support the material import/export demands of local industry. And the passenger and cargo capacity of Midland International Air and Space Port is substantial and supported by a strong network of local air fields.
- The Permian Basin's Education and Workforce Development System is also strong. Characterized by strong collaboration and partnership, the region's Workforce Development Board, secondary and post-secondary school systems work seamlessly to prepare the emerging workforce for the career opportunities and pathways supported by local industry.
Economic development in the region, however, is challenging. Oil and gas prices are subject to a range of external pressures including foreign production and demand, economic cycles, regulatory policy, tariffs, weather, etc. The resultant volatility has led to a boom-bust cycle of economic activity for the region that is challenging at both its highs and lows - taxing capacity on the high side and challenging maintenance on the low. Fierce competition for labor to supply workforce demands during booms has resulted in significant wage pressures and high labor costs that impact all industries. Likewise, influxes of labor to supply industry during periods of high-production activity has resulted in housing demand exceeding supply, particularly for multi-family and temporary housing. This excess of demand inflates housing costs for all residents of the Permian Basin, a challenge not easily tackled when building housing stock to meet peak demand risks a glut of housing with high maintenance costs during down-cycles.
- The region's Transportation System is robust, multi-modal and efficient. The Permian Basin is characterized by a well developed (if taxed) roadway system that includes two east-west interstates (I-10 and I-20), numerous state highways, and county/local roads that effectively facilitate transit of goods and raw materials. The rail system is mature, with the ability to support the material import/export demands of local industry. And the passenger and cargo capacity of Midland International Air and Space Port is substantial and supported by a strong network of local air fields.
- The Permian Basin's Education and Workforce Development System is also strong. Characterized by strong collaboration and partnership, the region's Workforce Development Board, secondary and post-secondary school systems work seamlessly to prepare the emerging workforce for the career opportunities and pathways supported by local industry.
Economic development in the region, however, is challenging. Oil and gas prices are subject to a range of external pressures including foreign production and demand, economic cycles, regulatory policy, tariffs, weather, etc. The resultant volatility has led to a boom-bust cycle of economic activity for the region that is challenging at both its highs and lows - taxing capacity on the high side and challenging maintenance on the low. Fierce competition for labor to supply workforce demands during booms has resulted in significant wage pressures and high labor costs that impact all industries. Likewise, influxes of labor to supply industry during periods of high-production activity has resulted in housing demand exceeding supply, particularly for multi-family and temporary housing. This excess of demand inflates housing costs for all residents of the Permian Basin, a challenge not easily tackled when building housing stock to meet peak demand risks a glut of housing with high maintenance costs during down-cycles.
Regional stakeholders have responded to these challenges by attempting to mitigate the boom-bust cycle effect and promote economic resiliency through economic diversity. While communities throughout the 17-county region are unique in their composition and assets, and each prioritizes development of different industries, the region by and large has targeted and coordinated to develop a regional competency in 6 Key Industry Clusters:
1. Energy: Fossil Fuel and Renewable Energy Production/Environmental Technology
2. Biomedical and Life Sciences
3. Aerospace and Aviation/Space Exploration
4. Transportation and Logistics
5. Manufacturing
6. Agribusiness, Food Processing, and Technology
In addition, communities throughout the Permian Basin region have made concerted efforts to spur Innovation and Entrepreneurship as means for promoting economic diversity and sustainability. The global economy flattened by technology and residents of the Permian Basin can compete globally, bringing revenue back to the region.
Entrepreneurship is not constrained to technology and export, however. In an economy characterized by high degrees of support from industries outside of the region, opportunities exist for enterprising individuals to supply needs locally versus importing required goods and services. In either the former or the latter case, communities throughout the region are making key investments to grow local businesses and promote entrepreneurship.
1. Energy: Fossil Fuel and Renewable Energy Production/Environmental Technology
2. Biomedical and Life Sciences
3. Aerospace and Aviation/Space Exploration
4. Transportation and Logistics
5. Manufacturing
6. Agribusiness, Food Processing, and Technology
In addition, communities throughout the Permian Basin region have made concerted efforts to spur Innovation and Entrepreneurship as means for promoting economic diversity and sustainability. The global economy flattened by technology and residents of the Permian Basin can compete globally, bringing revenue back to the region.
Entrepreneurship is not constrained to technology and export, however. In an economy characterized by high degrees of support from industries outside of the region, opportunities exist for enterprising individuals to supply needs locally versus importing required goods and services. In either the former or the latter case, communities throughout the region are making key investments to grow local businesses and promote entrepreneurship.
Promoting economic diversity and growth, however, creates new challenges and compounds existing ones. In a region already characterized by competition for skilled labor and chronically low unemployment, growth in additional skilled industry clusters exacerbates the shortages.
The region's workforce, is both young and low-skilled, with overall educational attainment rates lower than the state and nation. While the region's education and workforce infrastructure is substantial, continued efforts are needed to ensure the workforce, particularly youth, are acquiring the skills and credentials needed to compete in today's and tomorrow's economy.
In addition, the migration of residents out of the Permian Basin region, to metropolitan areas both in and out of Texas, compromises the ability of the region to supply the workforce needed for continued economic expansion. The impacts of this migration can be even more acute for small communities throughout the region who continue to see their young and talented leave. This trend is being combatted by Permian Basin communities via initiatives designed to improve the Quality of Place to retain talent and/or attract new talent.
The region's workforce, is both young and low-skilled, with overall educational attainment rates lower than the state and nation. While the region's education and workforce infrastructure is substantial, continued efforts are needed to ensure the workforce, particularly youth, are acquiring the skills and credentials needed to compete in today's and tomorrow's economy.
In addition, the migration of residents out of the Permian Basin region, to metropolitan areas both in and out of Texas, compromises the ability of the region to supply the workforce needed for continued economic expansion. The impacts of this migration can be even more acute for small communities throughout the region who continue to see their young and talented leave. This trend is being combatted by Permian Basin communities via initiatives designed to improve the Quality of Place to retain talent and/or attract new talent.
While the Permian Basin's economic assets are admirable, there are many challenges to regional economic development efforts that must be met for the region to continue to prosper. Economic developers and stakeholders must unite around clear Goals and Objectives, and coordinate efforts and initiatives to maximize the benefit to the region, for the benefit of its residents. Coordinated efforts for the duration of the 2014-2019 CEDS will target the following goal areas:
1 - Education and Workforce Development
2- Transportation and Infrastructure
3 - Housing
4- Industry Diversification and Resiliency
5 - Regional Marketing and Outreach
Effectiveness of efforts will be measured annually according to Performance Measures established by the Steering Committee in the formation of the 2014-2019 CEDS.
1 - Education and Workforce Development
2- Transportation and Infrastructure
3 - Housing
4- Industry Diversification and Resiliency
5 - Regional Marketing and Outreach
Effectiveness of efforts will be measured annually according to Performance Measures established by the Steering Committee in the formation of the 2014-2019 CEDS.