Domestic Energy Production Expected to Add 3.5 Million Jobs
By 2035, the domestic energy industry is expected to add more than 3.5 million jobs to the U.S. economy, according to the 2013 Energy Outlook Study, a new publication from Jones Lang LaSalle (JLL). In the next two years alone, this sector is projected to add about 700,000 jobs. Domestic energy growth will also fuel heated competition for prime commercial real estate, predominantly in a handful of cities where the oil and the gas industry is booming including the North American cities of Calgary, Dallas, Denver, Houston, Philadelphia and Pittsburgh.
About three quarters of the new jobs will be centered in the above-mentioned cities with nearby rural areas experiencing a rise in energy activity as well. The remaining jobs in this sector will be in other regions, including financial centers, such as New York City and Chicago, not directly associated with oil and gas production.
“The rapid growth in domestic oil and gas production has made a large but uneven impact on the U.S. economy,” said Bruce Rutherford, JLL International Director and Energy Practice Leader. “In the top energy cities, commercial real estate markets are booming, with growth creating scarcity – and thus a landlord-favorable market. This applies not only to offices, but also to retail, hotel, multifamily, industrial and distribution facilities and sites.”
While energy production is the direct growth driver, much of the commercial real estate demand is coming from affiliated industries, such as manufacturers serving the energy sector. Steel pipe makers, for instance, are stepping up production to meet demand. Similarly, chemical companies are prospering from low natural gas prices, with some companies shutting down plants overseas and diverting billions in capital expenditures to U.S. sites. According to the Texas Chemical Council, chemical plants in Texas have already announced roughly $15 billion in expansions as a result of natural gas growth, which is expected to net 25,000 jobs in the state.
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