Oil and Gas Boom Lifts Fleetwood Homes Sales
Editor’s Note: The following is an excerpt from a Wall Street Journal story looking at the oil and gas boom and the resulting boost for the economy, including a lift in production at Fleetwood Homes, a subsidiary of Cavco Industries Inc. To view the entire article click here.
The staccato of nail guns echoes across a cavernous building as workers for Nampa, Idaho-based Fleetwood Homes piece together manufactured houses with easy-to-clean linoleum floors and rugged interiors for muddy oil-field workers.
There is no oil and gas production in Idaho, but that doesn’t mean the U.S. energy boom has bypassed this bedroom community west of Boise. Fleetwood Homes, a subsidiary of Cavco Industries Inc., has increased production by 25% since last fall at its Nampa factory, hiring 40 workers and adding hours for employees. It is building the extra-insulated “Dakota” model for shipment 1,000 miles east to the Bakken oil field in North Dakota.
Were it not for the new demand for oil-field housing, factory manager Jeff Chrisman says he would be handing out furloughs, not overtime. Instead, “We’ve been able to bring back people that we hated losing a couple of years ago,” he says.
An energy boom is revving up the U.S. economy. The use of new drilling techniques to tap oil and gas in shale rocks far underground helped add about 158,500 new oil and gas jobs over the past five years, and economists think it has created even more jobs in companies supplying the energy industry and in the broader service industry. U.S. oil production is rising for the first time in decades. Natural gas has become so plentiful that prices recently plunged to a 10-year low.
“This is probably the biggest stimulus we have going,” says Michael Lynch, president of Strategic Energy & Economic Research, a consultant based in Amherst, Mass. Some $145 billion will be spent drilling and completing U.S. wells this year, up from $13 billion in 2000, estimates Spears & Associates Inc., an oil-field market research firm.
Chrisman said he had no clue about the energy boom until he received a call from a planned 300-unit housing development in Williston, N.D. He traveled there in 2010 and saw well-paid workers sleeping in their cars in a local Wal-Mart parking lot during winter because of the lack of housing.
As the factory’s pace of production began picking up last summer, Mr. Chrisman rehired workers he had let go amid the housing downturn. Shannon Smith returned to her job caulking tiles and cleaning up the houses before they are loaded onto trucks.
“In the two years I was laid off, we lost our house” and racked up a lot of credit-card debt, says Ms. Smith, a mother of two. “There was no money and nothing to do. This is chance to buy groceries again and keep paying the bills.”
Though she has never seen an oil well, Smith says, “I hope it keeps coming.”