Back on November 21st, 2012, we discussed how the oil boom out west has been benefiting states like the Dakotas and Montana. In “Thankful for Williston, North Dakota,” we looked in to the economy in Williston, the costs of living in the Dakotas, and the new jobs that are being created not only in the oil industry, but in other sectors that have seen a substantial increase in demand due to the oil boom, such as real estate and the food service industry.
We wanted to take this week to follow up on Williston with an article out of the Star Tribune: “North Dakota struggles to cope with its oil-boom prosperity.” The Star Tribune reports that there are “…no resources available,” in the city. The oil boom brought so many people to the city so fast that the local economy has not been able to keep up with demand. That is to be expected when a city’s population more than triples in 12 years, with much of that growth having come in just the last few years.
The Star reports that housing is one of the biggest problems that the city faces. Hotel rooms are going for $700 for the week, RVs are paying $800 a month just for a spot to park and hook up to water/sewer, and 2 bedroom apartments are going for over $2,000/month. Some employers are even beginning to build apartments attached to their businesses to house employees.
Another problem has been the inability of local businesses to meet skyrocketing demand. The article details one man who has had to learn to do all of his own work on his truck because the wait at the local body shop is too long. Walmart is offering to pay $17/hour just to get anyone to work there as opposed to the oil fields.
With all of that background information, life in Williston sounds like complete chaos; no services can be had, and if you are lucky enough to get your truck fixed or rent an apartment, you probably are going to pay an astronomical price. While high demand may make life difficult in the interim, Williston is setting the scene to become one of the strongest local economies in the entire country.
North Dakota’s economy is one that is very inviting to new businesses and opportunities for growth and expansion. Quite obviously, one body shop will not cut it in this town anymore, and there lies the opportunity for the existing automotive businesses to grow, or for new market entrants to establish themselves. With the population growing, new housing units will be needed. KKR & Co. are already underway in building approximately 1000 new housing units. Lastly, when these employees are off the clock they are going to want some form of entertainment, which is where shopping and the restaurant industry will benefit.
The classic “Business Cycle” that any first year business student has studied asserts that businesses go through periods of growth and expansion followed by a recessionary period. Currently, Williston is right at the base of a very steep rise. We have been saying for months that unemployed college grads should buy a one-way bus ticket to Williston and make a killing in the oil industry. It now appears that there are other options. Williston looks as if it could provide a great base for entrepreneurs looking to go in to business for themselves.