Dive Brief:
-
As oil companies drill fewer wells in the Houston area, construction on office and apartment buildings could come to a near standstill, according to two reports this week.
-
A slowdown in oil production has cut demand for office space in Houston, where 80 office buildings are under construction, according to property data firm CoStar Group. One-sixth of the office space under construction in the U.S. is in Houston.
-
In a separate report, Atlanta-based data firm CMD Group forecast that Houston contractors will start $769 million worth of apartment buildings this year, 26% less than last year’s record-setting $1 billion in construction.
Dive Insight:
Oil drilling tumbled nationwide by 28% in January, as prices dropped to a six-year low, according to Rice University’s Baker Institute for Public Policy. The Wall Street Journal reported this week that oil companies are reacting to falling prices quicker than during previous oil booms by stalling production and laying off workers. That quick exit could edge prices back up.
