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Liu - Wyoming Business Report - Casper - Eco 2013

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Liu - Wyoming Business Report - Casper - Eco 2013

  1. 1. WYOMING ECONOMIC AND REVENUE TREND Wyoming Business Report Economic Forecast Lunch December 10, 2013 Casper, Wyoming Wenlin Liu, Principal Economist Economic Analysis Division State of Wyoming 1
  2. 2. • WY in the recession: late entry, sharp contraction in 2009, stronger rebound in 2010 and 2011 – employment, income, wage, and revenue all increased. • • • • But the recovery slowed in the second half of 2012 and the first half of 2013 – mainly caused by reduced NG prices (drilling declined, fuel switching by power plants). (NG prod -6.0%, coal prod -9.0%). Mining industry lost jobs. However, oil exploration continued to expand in 2012 (2.0%). Driven by housing market recovery, construction employment showing growth. Starting the 3rd quarter of 2013, Wyoming’s economy appears growing again – stabilization of NG drilling activities and coal production from increased NG prices. 2
  3. 3. Employment by Industry for U.S. and Wyoming: 2012 (Includes: full and part-time wage and salary jobs, and proprietors employment) Wyoming U.S. Agriculture 1.9% Mining 0.7% All Other 21.4% Construction 4.9% Agriculture 4.0% All Other 19.1% Construction 7.4% Manufactur. 7.0% Leisure & Hospitality 9.4% Manufactur. 2.9% Wholesale & Retail Trade 13.6% Government 13.4% Government 19.3% Educational and Health Services 13.4% Wyoming = 392,348 U.S. = 179,613,300 Professional & Business Services 14.2% Mining 8.4% Leisure & Hospitality 10.4% Wholesale & Retail Trade 12.4% Educational and Health Services 8.4% Professional & Business Services 7.8% Rank of Wyoming’s industry share in the U.S.: Manufacturing – 49th Construction – 1st Prof. & Bus. Svcs. – 51st Government – 3rd Source: U.S. Bureau of Economic Analysis Mining - 1st Educ. & Health Svcs. – 50th 3
  4. 4. Gross Domestic Product for U.S. and Wyoming: 2012 by Industry Wyoming U.S. Agriculture 1.1% Agriculture 1.3% Mining 1.8% Construction 3.6% All Other 32.2% All Other 24.1% Mining 28.4% Manufactur. 12.0% Wholesale & Retail Trade 11.9% Government 12.3% Professional & Business Services 12.5% Leisure & Hospitality 4.0% Educational and Health Services 8.6% Government 14.0% Construction 5.0% Leisure & Hospitality 3.9% Educational and Health Services 4.2% Manufactur. 5.9% Professional & Business Services 4.3% Wholesale & Retail Trade 8.9% Note: GDP is often referred to as its "value added", is equal to its gross output (sales or receipts and other operating income, plus inventory change) minus its intermediate inputs (consumption of goods and services purchased from other industries or imported). Source: U.S. Bureau of Economic Analysis 4
  5. 5. • Wyoming’s economy does not mirror that of the nation. In terms of economic diversity and specialization, Wyoming is probably the least diversified state in the nation when measuring employment and GDP distribution across industries in comparison with the U.S. • Economic diversity has been commonly considered as a means to achieve economic stability. A diversified economy is considered a robust economy, and is better able to withstand and recover from significant unfavorable changes in any one sector. • “However, research is mixed as to whether it is better for a state or local economy to become more diversified, or remain specialized in sectors where it has, or may acquire, a comparative advantage.” 5
  6. 6. Non-Agr Wage and Salary Employment for Wyoming and U.S. (Number of jobs) 300 160,000 Wyoming US 280 150,000 260 140,000 240 130,000 220 120,000 200 110,000 180 100,000 160 90,000 140 80,000 120 70,000 100 U .S . E m p lo y m e n t (in th o u s a n d s ) W y o m in g E m p lo y m e n t (in th o u s a n d s ) Job growth rate: 2006=5.1%, 2007=4.1%, 2008=3.3% 60,000 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 Source: U.S. Bureau of Labor Statistics Prepared by Wyoming Economic Analysis Division 6
  7. 7. Wyoming and US Unemployment Rates: 1977 - 2013 Annual Average 10.0 10.0 9.0 9.0 U.S Wyoming 8.0 7.0 7.0 6.0 6.0 5.0 5.0 4.0 4.0 3.0 P e rc e n t 8.0 3.0 2.0 1977 1980 1983 1986 Source: U.S. Bureau of Labor Statistics 1989 1992 1995 1998 2001 2004 2007 2010 2.0 2013 Prepared by Wyoming Economic Analysis Division 7
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  9. 9. Percentage Change in Non-farm Employment by State October 2012 – October 2013 0.8% U.S. = 1.7% Source: U.S. Bureau of Labor Statistics 9
  10. 10. Unemployment Rate by State October 2013 (Seasonally Adjusted) 4.6% U.S. = 7.3% Source: U.S. Bureau of Labor Statistics 10
  11. 11. 50.0 40.0 30.0 20.0 10.0 0.0 -10.0 -20.0 -30.0 -40.0 -50.0 Jan 08 Jan 09 Source: Wyoming Department of Revenue Jan 10 Jan 11 Jan 12 Jan 13 11
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  14. 14. • Robust Supply – tech (HF, HD) • Higher Storage – mild weather Source: Natural Gas Intelligence 14
  15. 15. U.S. Electricity Generation by Energy Source 60.0 50.0 40.0 39.0% Percent Coal 30.0 20.0 27.7% 19.2% Natural Gas Nuclear Convent. Hydro. Wind 10.0 0.0 6.9% 4.0% 3.1% All Other Note: 2013 includes data from Jan to Sept 2013. Source: EIA/Electric Power Monthly/1.1 & 1.1A; Prepared by Wyoming Economic Analysis Division 15
  16. 16. Wyoming Revenue and Tax Facts • Revenue heavily relies on extractive industries. • Mineral income currently makes up about two-thirds of State and over half of Local Government revenue. • FY 2013 Mineral income is obtained from: - Mineral severance taxes ($839.8 M). - Federal mineral royalties ($961.6 M). - Mineral property taxes ($845.0 M). - Sales and use taxes ($181.6 M). - Income from PWMTF ($366.6 M). • No income tax, low property and sales tax rates (food exemption). • Household tax burden ranks among the lowest in the nation. • Near top rank in per capita state and local government revenue and expenditures. 16
  17. 17. Mineral Severance Taxes: FY1980 - FY2016 (in millions of current and constant dollars) $1,200 * Note : Inflation rate is as s um e d to be at 2% e ach ye ar for FY 2014 to FY 2016 $1,100 2013 Dollars* Other Coal Natural Gas Crude Oil $1,000 $900 $800 Natural Gas $700 Crude oil $600 $500 $400 $300 $200 $100 $0 1980 1983 Source: Wyoming CREG 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Prepared by Wyoming Economic Analysis Division 17
  18. 18. Total Locally and State Assessed Valuation: 1980 - 2015 (in millions of current and constant dollars) $32,000 * Note : Inflation rate is as s um e d to be at 2% e ach ye ar for 2014 and 2015 $30,000 2012 Dollars* Coal Natural Gas Oil Other $28,000 $26,000 $24,000 $22,000 Percent of Total Mineral Valuation: 1981 = 72% 1998 = 49% 2008 = 70% 2012 = 59% $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 1980 1983 1986 1989 1992 1995 * Other includes other minerals, real and personal property 1998 2001 2004 2007 2010 2013 Wyoming Economic Analysis Division 18
  19. 19. Source: U.S. Census Bureau and Wyoming Economic Analysis Division 19
  20. 20. 2000 Male 2010 Female 85+ 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4 2020 Male Female Male 2030 Female 85+ 80 - 84 75 - 79 70 - 74 65 - 69 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4 Source: U.S. Census Bureau and Wyoming Economic Analysis Division Male Female 20
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  22. 22. • • • • • • WY economy has been improving since the summer of 2013 and is expected to continue to grow moderately in 2014 – benefiting from continuing expansion of oil exploration and recovery of NG prices. Because of its large proportion and pivotal role in WY’s economy, the improvement in mining industry will trigger into other economic sections. As a energy extraction dependent economy, WY will benefit from continuing global commodity demand and U.S.’ stronger economy in 2014. Residential construction continues to grow. Tourism industry will benefit from EU recovery and continued U.S. recovery because they bolster tourists’ spending ability. Population grow around 1.0%, and employment will grow over 1.0%; unemployment rate below 4.5% in 2014. - Potential Projects: Chokecherry and Sierra Madre; Moneta Divide; Transmission lines (Gateway West, TransWest Express). - Concern: upcoming regulation on existing coal fueled power plants. 22
  23. 23. THANK YOU! Economic Analysis Division – EAD “Wyoming’s Source for Business and Economic Information” http://eadiv.state.wy.us ai-ead-info@wyo.gov (307) 777-7504 23

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