Low oil prices have yet to rattle North Dakota small businesses

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[February 06, 2015]  By Ernest Scheyder

WILLISTON, N.D. (Reuters) - Even as plunging crude oil prices fuel anxiety in North Dakota, small business owners in the No. 2 U.S. oil producing state say they are confident that demand for their products and services will remain strong enough to keep things humming.

North Dakota's oil patch has been one of the faster-growing U.S. regions. Small businesses employ three-fifths of the state's private workforce, about 195,000 people, with food service and construction among the larger employers, according to data from the U.S. Small Business Administration (SBA).

While big oil companies grab the most headlines out of the state, much of the local economy still relies on hotel owners, plumbers, contractors and other small businesses, said Mike Gallagher, manager of the SBA's North Dakota district.

"There's a note of caution right now around oil prices, but many know the trends: things go down and things go up," Gallagher said. "I haven't found anyone that's alarmed."

New coffee shops, restaurants and health food stores have recently opened or are set to open in Williston, capital of the state's oil boom. Roughly 78 percent of North Dakota's small businesses that opened in 2013 were still around in 2014, SBA data show.

"Even if oil prices continue to fall, I think people will still treat themselves to a good cup of coffee," said Louise Skaare, manager of Lantern Coffee Company, a niche affair opening Friday with a menu anchored by ristretto and cortado.

At first blush, organic food store Fresh Palate appears out of place in hard-scrabble Williston, selling gluten-free biscotti, dairy-free pepper jack cheese and organic baby powder suffused with probiotics.

"We saw a need for this type of store here," said co-owner Lacey Dixon, a Williston native who opened Fresh Palate in December. "So I'm not nervous at all about the oil price."

To be sure, the new businesses open during a difficult time for a region so linked to oil, with crude prices down about 50 percent since June. Layoffs are happening at companies both large and small, though more than 2,000 jobs are still waiting to be filled.

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The number of job openings shows the labor market remains tight. Skaare plans to close Lantern Coffee at 5:30 p.m. each day because she cannot find enough staff.

Culvers, a privately held restaurant chain that competes with McDonald's, held a job fair last month to find 100 employees. It still has jobs to fill before opening later this month.

"This oil price dip is going to have an impact, but it'll just be short term," said Rob Woodling, who is franchising the restaurant with his wife, Casandra. "Williston has developed enough of an infrastructure to support itself."

Qdoba, a Mexican chain owned by Jack in the Box Inc, is looking for workers ahead of an early March opening. Red Wing Shoe Co, the privately held work boot manufacturer, is looking for a manager for a new Williston store.

"I'm not worried about oil prices at all," said Chris Duell, a Little Caesars franchisee who plans to open by April if his contractor can get enough staff to finish renovations. "Pizza sells, no matter what."

(Reporting by Ernest Scheyder; Editing by Terry Wade and David Gregorio)

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