CHEYENNE — A quarterly economic report released this week shows Wyoming saw an increase in overall sales this year, while Laramie County continued to see stable growth in its economy.
Yet the report also provided an indication of the struggles Wyoming will face as its revenue from mineral taxes dwindles.
The report, published by the state’s Economic Analysis Division, indicates the state has continued to rebound from the economic downturn of 2015 and 2016, Wyoming Chief Economist Wenlin Liu said.
“During the downturn, the state lost almost 20,000 jobs,” Liu said. “In the mining sector, we lost almost 9,000 jobs, but since early 2017, driven by petroleum exploration, we’ve been slowly rebounding, and that rebound continues in third quarter 2019.”
Since the third quarter of 2018, taxable sales have increased 8.5% statewide. Over the same span, sales in the construction industry jumped 44%, which Liu mainly attributed to increased oil exploration in eastern Wyoming.
“Any time you have oil production increase, they need lots of pipelines to transfer it out,” Liu said. “That’s why this construction is mostly driven by oil and gas pipeline construction, and we also have some of this wind power construction, like in Carbon County.”
In Laramie County, taxable sales increased 5.3% since the third quarter of 2018. Liu said the county has much less fluctuation than other counties that are more dependent on mineral production.
“Laramie County has actually, for the past many years, seen steady growth in terms of employment or even population,” Liu said.
Yet other elements of the report offer details that help explain why the state is facing an anticipated $185.4 million drop in revenue over the next three years. Wyoming’s mineral severance tax revenue in the third quarter of 2019 was about 15% lower than it was in the same quarter last year.
Liu attributed the drop in tax revenue to prices for natural gas and oil declining over the past year, while natural gas and coal production also declined by about 10%. The main positive from the report was an increase in oil production, Liu said.
“However, the oil production increase is not enough to offset other declines,” Liu said. “That’s why, for overall mineral revenue, it’s about 15% lower than the same time last year.”
Meanwhile, Wyoming’s unemployment rate increased slightly – from 3.5% last quarter to 3.7% this quarter. Liu said the drop is largely due to Blackjewel shutting down two of its Wyoming coal mines in July, as the report shows the state’s mining industry lost 670 jobs, or a 3.2% drop from the previous year.
“Still, our unemployment rate ... is very low,” Liu added.
Liu noted the low unemployment rate is also a result of Wyoming’s aging population. An AARP report from last year found that by 2055, Wyoming’s population 85 years old and older is expected to grow by 227%.
“We just do not have enough labor to replace these retired people, so that’s why our relatively low unemployment rate will continue,” Liu said. “Many businesses are looking for workers pretty hard.”
Next month, the Economic Analysis Division will release an updated report from the Consensus Revenue Estimating Group that will provide more details on Wyoming’s long-term economic outlook.