The US oil and gas industry created 37,000 direct jobs and 111,000 indirect jobs in 2011, effectively generating 9% of all new US jobs last year, the World Economic Forum said in a Mar. 7 report. The multiplier effect of about 3 reflects a global economic growth trend where new jobs in all forms of energy produce more indirect than direct economic benefits, it indicated.
"We always suspected that energy had a vital role to play in the economic recovery, but we were still surprised when the data uncovered the magnitude of the sector's multiplier effects," said Roberto Bocca, senior energy industries director at the New York-based WEF.
The report, which was released in Houston during IHS-CERA Energy Week, noted that because energy industries are inherently capital-intensive and require large investments, they can contribute significantly to gross domestic product growth. US oil and gas extraction industries grew at a 4.5% rate in 2011, compared with a 1.7% total GDP growth rate, it said.
The sector's highly skilled workforce is also well-paid compared to other sectors, according to the report. Compensation per worker in energy-related industries is about twice the average in Germany, Norway, the UK, and the US, and four times the average in Mexico and South Korea, it said. As a result of higher wages, energy industry employees contribute more absolute spending per capita to the economy than the average worker and contribute a larger share of GDP per worker than those in most other businesses, it said.
The report also examined the role energy prices play in economies. It said that lower prices reduce input costs for nearly all goods and services, thus making them more affordable. Over the short term, economic models show that, for example, lower natural gas prices will help the US economy in several measurable ways: a 1.1% increase in GDP in 2013; 1 million more jobs in 2014; and 3% higher industrial production in 2017 than would be anticipated without shale gas development, it said.
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