HOUSTON, Dec. 8 (UPI) -- The outlook for the oil-based economy in Texas is anything but certain, though some form of recovery is expected later in 2016, an economist said.
The Texas Petro Index, a metric used to gauge the health of the state's energy sector, declined for the 11th straight month in October, the last full month for which data are available.
The Dallas Federal Reserve last week said some parts of the state economy were performing better than the rest of the nation, though wages and employment prospects continued to falter as lower crude oil prices become the new normal.
"The financial positions of many energy firms continued to deteriorate, particularly smaller firms," the bank said.
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The Texas Alliance of Energy Producers finds the number of Texans working in the oil and gas industry down about 17.8 percent from last year. Payrolls are still about 15 percent higher than in 2008, however.
Karr Ingham, an economist who created the index, said the prospects for any form of major economic recovery were dwindling.
"It seems the most optimistic outlooks expect the beginning of meaningful recovery to appear no sooner than the latter half of 2016," he said in an emailed statement. "But we simply do not know how that will look at this point."
The Texas alliance shows crude oil production in Texas peaked in the middle of 2015, though current output is still above this point last year. Of all the inland shale basins in the United States contributing to growth in domestic oil production, only the Permian reserve in Texas is expected to report an increase in December.
Ingham said that adds to the overall supply concerns that are pushing crude oil prices lower.
"Until crude oil production actually begins to decline meaningfully and the volume of oil in storage begins to contract rather than expand, there is little reason to expect prices to recover and activity levels to begin to increase," he said.
