Today, March 11, 2021, we attended the Southeast Texas Economic Forecast Breakfast. Guest speakers included Dr. Ray Perryman, a renowned economist; Jefferson County Judge Jeff Branick; Hardin County Judge Wayne McDaniel; and Orange County Judge John Gothia. We also heard from ExxonMobil, Mobiloil Credit Union, and other EDC directors in the area.
We attend this every year to better represent our clients and to be able to better prepare for things to come. It is always a very enlightening time and my only complaint is that I cannot write fast enough for notes to bring back to share.
The overall sentiment was extremely positive for the coming months and years, but I first want to share with you just how bad COVID-19 has destroyed our economy in the U.S. Here are some key numbers that will shock you:
- We lost 22M jobs in just 2 months’ time. WOW!!! This was a record drop, and it is not even close.
- Oil use went from 101M bbl/d to 72M bbl/d overnight. Good news on this is that we are already back up to 90M bbl/d. So, we are gaining again.
Now, on to the great news. You must first understand that Dr. Perryman is a very well known and published economist. When he speaks, large corporations, world powers, and all kinds of people listen. His clients include 10 branches of the government, Fortune 100 companies, etc. The list goes on. He said some amazing things that we need to be aware of:
- The U.S. is expected to see 4%-4.4% GDP growth over the next 4-5 years.
- In the next year, we will see a 2% job growth.
- Manufacturing in the world is growing vastly and quickly.
Some facts that were stated to back these items up were:
- ExxonMobil is increasing their refining capacity, as are many other like companies.
- Entergy is building a brand-new facility in Southeast Texas (Orange County).
- The LNG industry is growing rapidly and expanding.
Dr. Perryman spoke openly about the environmental movement and he said something that really piqued my interest: “While the move is admirable, it is just a little misdirected. We can never get away from fossil fuels, but what we can do is learn to burn them more efficiently.”
This is where all this new growth is coming from in the energy sector. When large companies like ExxonMobil spend billions on expanding capacity, it is a huge investment and a bet that the growth of the use of these fuels will continue and not lessen, like everyone seems to want nowadays. The manufacturing processes are going to get better, and this will cause the usage of these fuels to increase.
To conclude, it should be noted that Southeast Texas is the center of all energy and, because of that, we have seen so much expansion and growth; however, here is more yet to come. Dr. Perryman compared the Spanish Flu to where we are right now. The Spanish Flu ended and the “roaring 20s” blew in and the country grew exponentially. He stated, “Today, we are going into the new roaring 20s!” That is a strong statement by a man whose entire livelihood is based on his predictions coming true.