1
WYOMING ECONOMIC AND REVENUE TREND
Wyoming Business ReportEconomic Forecast Lunch
December 10, 2013Casper, Wyoming
Wenlin Liu, Principal Economist
Economic Analysis Division
State of Wyoming
2
Recent Economic Trend• 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.
3
Mining - 1st
Construction – 1st
Government – 3rd
Manufacturing – 49th
Prof. & Bus. Svcs. – 51st
Educ. & Health Svcs. – 50th
Wyoming = 392,348U.S. = 179,613,300
Employment by Industry for U.S. and Wyoming: 2012
(Includes: full and part-time wage and salary jobs, and proprietors employment)
Source: U.S. Bureau of Economic Analysis
Agriculture1.9%
Mining0.7%
Construction4.9%
Manufactur.7.0%
Wholesale & Retail Trade
13.6%
Professional & Business Ser-
vices14.2%Educational and Health
Services13.4%
Leisure & Hospitality
9.4%
Government13.4%
All Other21.4%
U.S.
Agriculture4.0%
Mining8.4%
Construction7.4%
Manufactur.2.9%
Wholesale & Retail Trade
12.4%
Professional & Business Ser-
vices7.8%Educational and Health
Services8.4%
Leisure & Hospitality
10.4%
Government19.3%
All Other19.1%
Wyoming
Rank of Wyoming’s industry share in the U.S.:
4
Gross Domestic Product for U.S. and Wyoming: 2012by Industry
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
Agriculture1.1%
Mining1.8%
Construction3.6%
Manufactur.12.0%
Wholesale & Retail Trade
11.9%
Professional & Business
Services12.5%
Educational and Health Services
8.6%
Leisure & Hospitality4.0%
Government12.3%
All Other32.2%
U.S.
Agriculture1.3%
Mining28.4%
Construction5.0%
Manufactur.5.9%
Wholesale & Retail Trade8.9%
Professional & Business Services
4.3%
Educational and Health Services
4.2%
Leisure & Hospitality
3.9%
Government14.0%
All Other24.1%
Wyoming
5
Wyoming’s Economic Diversification
• 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.”
6
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13100
120
140
160
180
200
220
240
260
280
300
Wy
om
ing
Em
plo
ym
en
t (i
n t
ho
us
an
ds
)
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
160,000
U.S
. Em
plo
ym
en
t (in th
ou
sa
nd
s)
Wyoming US
Non-Agr Wage and Salary Employment for Wyoming and U.S.
(Number of jobs)
Prepared by Wyoming Economic Analysis DivisionSource: U.S. Bureau of Labor Statistics
Job growth rate: 2006=5.1%, 2007=4.1%, 2008=3.3%
7
1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 20132.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Pe
rce
nt
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
U.S Wyoming
Wyoming and US Unemployment Rates: 1977 - 2013
Annual Average
Source: U.S. Bureau of Labor Statistics Prepared by Wyoming Economic Analysis Division
8
9
Percentage Change in Non-farm Employment by StateOctober 2012 – October 2013
0.8%
U.S. = 1.7%
Source: U.S. Bureau of Labor Statistics
10
Unemployment Rate by State October 2013(Seasonally Adjusted)
4.6%
U.S. = 7.3%
Source: U.S. Bureau of Labor Statistics
11
Percent Change in Wyoming’s Sales Tax Collections(year over year)
-50.0
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
Source: Wyoming Department of Revenue
12
13
14
• Robust Supply – tech (HF, HD)• Higher Storage – mild weather
Source: Natural Gas Intelligence
15
39.0%
27.7%
19.2%
6.9%4.0%3.1%0.0
10.0
20.0
30.0
40.0
50.0
60.0
Perc
ent
Source: EIA/Electric Power Monthly/1.1 & 1.1A; Prepared by Wyoming Economic Analysis Division
U.S. Electricity Generation by Energy Source
Coal
Natural Gas
Nuclear
Convent. Hydro.
Wind
All Other
Note: 2013 includes data from Jan to Sept 2013.
16
• 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.
Wyoming Revenue and Tax Facts
17
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
2013 Dollars*OtherCoalNatural GasCrude Oil
Mineral Severance Taxes: FY1980 - FY2016
Prepared by Wyoming Economic Analysis DivisionSource: Wyoming CREG
(in millions of current and constant dollars)
* Note: Inflation rate is assumed to be at 2% each year for FY 2014 to FY 2016
Crude oil
Natural Gas
18
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
$22,000
$24,000
$26,000
$28,000
$30,000
$32,000
2012 Dollars*CoalNatural GasOilOther
Total Locally and State Assessed Valuation: 1980 - 2015
Wyoming Economic Analysis Division
(in millions of current and constant dollars)
* Other includes other minerals, real and personal property
* Note: Inflation rate is assumed to be at 2% each year for 2014 and 2015
Percent of Total Mineral Valuation:1981 = 72%1998 = 49%2008 = 70%2012 = 59%
19Source: U.S. Census Bureau and Wyoming Economic Analysis Division
20
0 - 4 5 - 910 - 1415 - 1920 - 2425 - 2930 - 3435 - 3940 - 4445 - 4950 - 5455 - 5960 - 6465 - 6970 - 7475 - 7980 - 84 85+
0 - 4 5 - 910 - 1415 - 1920 - 2425 - 2930 - 3435 - 3940 - 4445 - 4950 - 5455 - 5960 - 6465 - 6970 - 7475 - 7980 - 84 85+
Male FemaleMale Female
Male FemaleMale Female
2000 2010
2020 2030
Source: U.S. Census Bureau and Wyoming Economic Analysis Division
21
22
Wyoming’s Positive Outlook• 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.
23
Economic Analysis Division – EAD“Wyoming’s Source for Business and Economic Information”
http://eadiv.state.wy.us
(307) 777-7504
THANK YOU!