Carlsbad struggling to attract chains amid oil boom

January 12, 2019
FILE- This May 24, 2018, file photo, shows a flare burning on the southwest corner of the Smith Ranch in Carlsbad, N.M. The oil boom in southeastern New Mexico may be attracting business to some communities but some chains say they are struggling to keep employees thanks to better-paying positions in the oilfield. (Robin Zielinski /The Las Cruces Sun News via AP, File)

CARLSBAD, N.M. (AP) — The oil boom in southeastern New Mexico may be attracting business to communities, but some chains say they are struggling to keep employees because of better-paying positions in the oilfield.

The Carlsbad Current-Argus reports that Carlsbad Chamber of Commerce CEO Robert Defer said a labor shortage is affecting the city’s ability to attract national chains.

He said many of the businesses rescind their interest when they learn of the city’s shrinking workforce.

“There are a lot of different chains that do contact us,” Defer said. “The current challenges are employment-based. That goes hand-in-hand with the oil companies. Everyone is fighting for the same personnel.”

The U.S. Bureau of Labor Statistics shows that Carlsbad had only a 2.8 percent unemployment rate in May.

That’s just more than half of New Mexico’s unemployment rate of about 5 percent and well below the U.S. average of about 4 percent.

Defer says communities such Carlsbad are also facing a housing shortage after oil companies and others bought up available rental units and homes, driving up costs and cutting availability.

“Housing is a big issue for workers,” Defer said. “It’s not a strong market. That makes it hard to bring employees in.”

Along with a strong workforce, companies want cities to be along an interstate or to meet certain population requirements.

Carlsbad is estimated to have about 27,000 people.

But Jeff Campbell, director of business development with the Carlsbad Department of Development, said a study of water usage accounted for about 75,000 people in the city.

“Not everybody answers the Census,” Campbell said. “We are a big transient workforce. Some companies, we’ll meet all the requirements but then they ask about workforce. That usually ends the conversation.”

Campbell said a historic explosion of activity in the Permian Basin is expected to continue, causing a dramatic growth in Carlsbad.

In the meantime, Defer worried that larger chains would pass over Carlsbad, waiting for the city to grow to an adequate size in customer and workforce base.

“They’re very interested,” Defer said. “But when they see the employment numbers, they have to take a second look.”

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