MIDLAND, TX (KWES) - The president of the Federal Reserve Bank spoke in Midland Tuesday afternoon discussing the current state of the oil industry and its effects on the economy.
Federal Reserve President Rob Kaplan touched on topics like the oil downturn as well as the economy of Midland and Texas as a whole.
"There's no question that the decline in the energy business that we have been through in the last couple of years has really created stress for not only Midland, but for the entire state of Texas," said Kaplan.
Kaplan said energy used to account for 14 percent of the GDP. It now stands at just nine percent.
"The state has had to manage that. Midland has had to manage that. I think 2016, the remainder of the year is still going to be very challenging. There's going to be more bankruptcies, merger re-constructors in the energy business," said Kaplan.
Many oil industry experts have predicted a recovery in the industry in 2016, but Kaplan suspects supply and demand to stabilize in the beginning of 2017. He's cautious but optimistic about the growth of the industry in the next three to five years.
"Global demand for energy will continue to grow. Price will continue to firm and I think we will see better days ahead for the energy industry in Midland and in the state generally," said Kaplan.