Energy productivity in parts of Missouri plummeted in Q2 2020 and will likely continue to fall until oil prices recover, a survey shows.
60% of firms surveyed shut-in wells or reduced production in the second quarter, according to a survey by the Kansas City Federal Reserve.
“A majority of firms in our survey applied for and received SBA PPP loans, but low energy prices have hurt profitability,” Chad Wilkerson, an economist at the Federal Reserve Bank of Kansas City, said.
The year over year business activity dropped 80% while employment fell 65%. Firms said oil prices need to be on average $51 per barrel to significantly increase drilling.
Roughly 30% of respondents in the tenth district, which includes Missouri, said they would not be able to survive a year if current revenue levels remain.