Low oil prices cause trickle-down effect for other businesses

Low oil prices cause trickle-down effect for other businesses

EAST TEXAS (KLTV) - Though low oil prices translate to low prices at the pumps for consumers, it has had a substantial impact on East Texas businesses.

As East Texas gas stations continue to try to outdo each other at the gas pumps, the continuing decline in oil prices is concerning businesses connected to that industry.

"As all energy-related business, we're seeing some slow down, we've been through this before. We'll do as we've always done and adjust. My concern is our infrastructure goes by the wayside, we're dependent upon the Saudi's again," says Energy Weldfab vice president Michael Clements.

According to AAA Texas, one year ago we were paying a state average of $3.16 for a gallon of unleaded. Today that average is $1.87.

At East Texas companies like Energy Weldfab, their success is linked to the oilfield, and low oil prices have a trickle-down negative effect.

"From the trucking industry, to falloff in the restaurants the hotel business. It's a cumulative effect on a lot of business. It's the crews on the drilling rigs, it's the roustabout crews, it's the steel industry, it's even the tire manufacturers," Clements says.

Some businesses like Longview's dog grooming business The Clip Joint, with a number of clients employed in the oilfield, see fewer people coming in.

"It has really slowed our business down. They have cut their hours down to 40 hours a week, no overtime, and they were making a lot of overtime," says Clip Joint owner Sheryll Crocker.

More price drops could lead to a stark reality.

"The last thing that you want to see is laying people off, good workers that have done nothing to deserve being laid off. What you have to do is when times are good is to prepare yourself for when you have these slow periods. I don't think the price of oil needs to be 100 dollars a barrel, but it doesn't need to be 40," says Clements.

People we talked with today say the oil business runs in cycles, like the weather, and they simply have to wait out times like these.

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