RED's Annual Report Shows How the Downturn is Effecting Local Businesses

With oil production slowing down in 2015, many are wondering what's next for Richland County and how the downturn is going to effect a community that has seen so many changes over the last few years. As part of Richland Economic Development's annual report, Leslie Messer, Executive Director, interviewed nine area businesses about how the downturn had affected them.

"We try to keep a pulse on how the businesses in our area are coping," said Messer.

With much of the country being in recession when the oil boom was in full swing, communities across the eastern Montana and western North Dakota acclimated to sudden population growth. As people from all over the United States moved into the area to find work, local governments, businesses, and residents worked to keep pace. Now that pace has slowed; in September of 2014 there were nine oil rigs in Montana and oil prices were at $90 dollars a barrel. In September of 2015 there was one oil rig in the state and oil prices were at $43 a barrel.

"I liken this affect as similar to the 1950's downturn, peaks and ebbs, but steady. Not abrupt," said Greg Cross of Cross Petroleum who also noted that business is steady, though not at its peak, and they have seen on-going activity.

UINTAH Engineering & Land Surveying, business that relies heavily on oil and gas development, told Richland Economic Development that they have had a 30% reduction in staff. Pipeline work is steady, but will probably come to an end in the next year.

"I'm running my business as if the downturn will last longer than a couple of years. This strategy allows me to keep my employees and families here in our local economy," commented Troy Jensen of UINTAH.

Aliza Hunter of Candlewood Suites shared that while bookings are uncertain, the staff has had more time to get to know their guests and meet their needs, putting the hotel #1 on star report rankings.

Perhaps one of the most telling reports of how the downturn is effecting the job market is from Sidney Job Service, which has been staying busy with five to seven walk-ins per day. In September the Sidney Job Service had 250 job postings. Slightly down from 330 the previous September, and of those 250 jobs, all but one was paying more than minimum wage.

Businesses like UINTAH, Candlewood Suites, and Sidney Job Service are all considered frontline businesses, meaning that their business is directly impacted by the oil field, but many businesses are second line in that their business is indirectly impacted.

B&B Sales and Service noted that while sales are down, they are picking up more concrete business and expanding to Williston, Watford City, and Culbertson; as other companies leave, B&B Sales and Service fill that need and have reduced inventory to control manageables.

Footers owner, Jerry Watson, told Richland Economic Development that they haven't seen a drastic downturn in business and that with the cost of housing coming down there are more choices, which has made business easier.

"I haven't had to increase my prices yet. For the past three years I've been able to absorb the rising costs and not pass it along to my customers," stated Watson.

"We are filling more of our customer's needs," commented Ron Utgard of Reynolds Market. He added in regards to the recently built store, "We wouldn't have made this huge investment if we were only reliant on oil and gas activity." He went on to share that services such as the deli, smoker, bakery, and floral department are all doing better than they were last year and added that it's easier to find employees and patrons seem to be more community minded.

Electricland, which is the only authorized Verizon dealer which keeps money in the community, had to think fast when Radio Shack went under, causing them to establish other vendors with better pricing. While sales have dropped and walk-in business is back to pre-boom levels, they are doing more installations and location work which boosts business.

ProBuild has a unique perspective as the only National building supply store in Sidney, and with a surge in construction during the oil boom; Richland Economic Development was interested to know how the downturn had impacted local construction. Teresa Mannix commented that the local contractors they supply are busy all the time, and though the opening of Menards in Williston, ND has impacted the business, loyal clientele continues to come to ProBuild and they haven't had any layoffs.

Though the community has concerns about the local economy and the friends, family, and neighbors that have been or may be affected, perhaps Mannix summed it up best when she noted, "Sidney is like the little engine that could. We keep plugging along. No major valleys. We are steady."

*All of the information used in this article was compiled by Richland Economic Development.