Economist: ‘Worst may be over’ for Wyo.

The State of Wyoming recently released its annual MACRO report detailing the state’s economy, and while the report paints a gloomy picture, there are signs of hope on the horizon.

“I think there’s a couple of causes for optimism, the worst may be over for the state,” Jim Robinson, principal economist for the economic analysis division of the Wyoming Department of Administration & Information, told the Daily Times Monday. “It looks like things are starting to stabilize.”

There are several major problems facing Wyoming’s economy, most particularly a major hit to its traditional primary revenue source, the mining industry. The production of natural gas, oil and coal are all down, with coal having dropped 25.3 percent in the past year.
Job growth is also down and has been going down since January, with no less than 8,000 nonfarm jobs being lost per month in the state, a major decline after a minor 2,400 nonfarm job loss figure for the whole of 2015. Overall, Wyoming is down 3.3 percent in terms of national nonfarm job growth and has lost 9,400 jobs from August 2015.

The mining and logging industry has lost 4,600 jobs lost statewide. Construction has fallen off right beside them, with 1,300 jobs lost, a figure shared with wholesale trade and leisure activities.

Transportation and utilities have taken an even larger hit, with 1,400 jobs lost. Oil and gas jobs fell to 10,800 in August, a decrease of 2,800 compared to last year.

“The one thing I have through September is that jobless claims for mining are finally decreasing, so that’s going down,” Robinson said. “Unfortunately, job claims for other sectors…are still seeing increases.”

Robinson said that the industries reporting significant job losses, like construction or trade, were tied deeply in to the mining industry, with mining’s losses reflecting out to losses in other sectors.

There are a few positives, primarily in the education and health industries, which saw a growth of 900 jobs since 2015. The only other sectors reporting job gains were manufacturing bringing in 100 new jobs and other services bringing in 300.
Unemployment insurance claims are up about 15 percent.

Price rollercoaster
The price of natural gas has reached a new high average, $2.72 per million monthly British Thermal Units. Crude oil remains close to roughly $45 per barrel, and with surpluses high that price is unlikely to spike any time soon, Robinson said.

Powder river coal has been priced less than $10 per ton, continuing an already declining rate.

After three months of collections for the fiscal year 2017, sales and use taxes were nearly 17 percent lower than last year, with small gains reported by Carbon, Lincoln, Teton and Washakie Counties. Severance taxes declined by $28.9 million in FY 2017 as well.

The gains for Carbon County are not as much of a silver lining as they seem, however; the Department of Revenue made a sales tax adjustment in 2015 and last year’s numbers were lowered, so this year’s numbers only look good in comparison rather than reflecting a positive trend.

Although good news could be on the way, Robinson said.

“There’s going to be better news for Carbon County going forward, because of the Chokecherry and Sierra Madre wind farm construction,” Robinson said. “As that ramps up, that’s going to add more workers, more jobs.”

Sales and use
Sales and use tax collection was down uniformly across all industries surveyed, with mining and logging again putting up the biggest loses, an over 10 percent decline from last year in just the first three months of FY 2017.

There are other gains: personal income for quarter two of 2016 improved as increases in property income and transfer payments more than offset the decline in net earnings.  Park visits are also ahead of last year by 2.8 percent.

Farm sector earnings contributed most to earnings growth in quarter two of 2016 with an increase of $39 million. Mining earnings had the largest decline of $107 million since quarter one.

The mining losses can’t be easily blamed on just federal restrictions, although EPA rulings have definitely had an effect on the coal industry. Mining is struggling on the national level, and Robinson spoke to the issues driving current economic conditions.
“There’s indications now that the going down part is about over, if not over already,” Robinson said. “We’ve hit the bottom. How long we stay at the bottom, or whatever this new level is, (is unknown) but the prices are a driving thing for Wyoming and prices don’t seem to be increasing quickly.”

From Wyoming Business Report