MACRO Report: Review of Wyoming s Economy

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Evan Clark
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energy, employment, state revenues, and other indicators pertaining to the state

1 MACRO Report: Review of Wyoming s Economy Economic Update as of December 31, 2017 The MACRO Report is a quarterly publication comprised of charts focusing on energy, employment, state revenues, and other indicators pertaining to the state of Wyoming. WYOMING DEPARTMENT OF ADMINISTRATION & INFORMATION WYOMING MACRO Report

2 Summary: Recovering Crude Oil Market Bolsters State Revenues. Employment Total nonfarm employment fell by 1,700 jobs (-0.6%) in November compared to previous year; mining (+2,200) recorded the largest private sector gain while leisure & hospitality (-1,200) lost the most jobs. Energy December average for Opal natural gas settled at $2.61 per MMBtu while WTI oil rose to $57.36 per bbl.; October 2017 natural gas production was 7.9% behind last year while oil production was ahead by 1.6% and November 2017 year-to-date coal production had increased by 8.5%; oil & gas rig count was 25 in December compared to 19 one year ago; oil & gas jobs in November increased by 1,600 in a year-ago comparison. Revenues First 6 months of FY 2018 sales and use tax collections ahead of last year by 17.9%; 10 of 12 industry sectors that were tracked recorded year-over-year gains; Sublette County realized the largest increase in collections (+$9.3 million) in fiscal 2018 while Crook County had the largest loss (-$0.4 million). After 6 months of FY18, severance tax revenue exceeded last year by 9.6%. Personal income, home price appreciation, and building permits Personal income for Q3 of 2017 saw an increase of 0.4% for the state compared to the previous quarter. FHFA s purchase-only house price index reported a Q3 year-over-year increase in home prices for Wyoming of 2.3%; the Mountain Division saw an increase in prices of 8.6%. Statewide, single family units permitted year-to-date through end of November fell by 0.9% over the previous year. 2

3 Economic Activity: Weak Labor Market is Improving; Q3 Personal Income Saw 2.6% Year-over-Year Growth Year-over-year job losses shrank in November. Rig counts numbered 25 in December, leveled off in second half of 2017; improving production and spot prices seen for oil and coal in latter part of After six months of fiscal 2018, year-to-date sales & use tax and severance tax collections were outpacing fiscal Three consecutive quarters of personal income growth observed in

4 Coincident Index: WY, CO, NE, & U.S. Year-over-Year Percent Change in Index Values 8.0 Through November 2017 Percent U.S. Colorado Nebraska Note: The coincident index for each state is comprised of four indicators of current economic activity including: 1. nonfarm employment 2. manufacturing hours worked 3. unemployment rate 4. and wages & salaries paid Wyoming Source: Federal Reserve Bank of Philadelphia. 4

5 Employment: Mining Drove Job Gains in 2017; Year-over-Year Total Job Losses Shrank from -9,200 to -1,700 Statewide employment fell by 1,700 jobs (-0.6%) when compared to November Mining industry led the private sector by adding 2,200 jobs in November 2017 followed by financial activities (+300), professional & business services (+300), and manufacturing (+200). Both Casper and Cheyenne realized year-over-year job growth of 1.1% in November. 5

6 Nonfarm Employment: Casper, Cheyenne, WY, & U.S. Seasonally Adjusted Through November Index: Jan07=100 U.S. Casper Cheyenne Wyoming Percent Past Past Peak* to Change 10 Years Year Present WY -6.2% -0.6% -8.3% U.S. +6.4% +1.4% +6.4% Source: Bureau of Labor Statistics. Note: Shaded area represents U.S. recession. *Refers to pre-recession peak. 6

7 WY and U.S. Nonfarm Employment Through End of November 2017; Seasonally Adjusted Nonfarm Job Growth Percent Change Year-over-Year Percent Wyoming U.S Source: U.S. Bureau of Labor Statistics. Change in Jobs (000) WY Nonfarm Job Change Year-over-Year Thousands of Jobs Jan17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov

8 WY Employment Change: Nov 2017 vs. Nov 2016 Year-over-Year; Seasonally Adjusted # of Jobs % Change Mining (7%) 2, % Construction (7%) % Manufacturing (3%) % Wholesale Trade (3%) % Retail Trade (11%) % Transp. & Utilities (5%) % Information (1%) % Financial Activities (4%) % Prof. & Bus. Services (6%) % Education & Health (10%) % Leisure & Hospitality (12%) -1, % Other Services (4%) 0 0.0% Federal Govt. (3%) 0 0.0% State & Local Govt. (23%) -1, % Note: Values in parentheses represents shares of total jobs. Statewide Change: -1,700 Jobs or -0.6% Source: U.S. Bureau of Labor Statistics. Note: The State & Local Government sector includes jobs affiliated with K-12 & higher education and public hospitals. 8

9 Casper & Cheyenne Job Change: Nov 2017 vs. Nov 2016 Year-over-Year; Not Seasonally Adjusted Casper (+400 jobs YoY) Cheyenne (+500 jobs YoY) Total nonfarm employment 1.1% Total nonfarm employment 1.1% Mining & Construction (14%) 10.4% Mining & Construction (9%) 21.2% Manufacturing (4%) 16.7% Manufacturing (3%) 16.7% Wholesale Trade (6%) 4.5% Wholesale Trade (2%) 0.0% Retail Trade (12%) -6.1% Retail Trade (12%) -1.7% Transp. & Utilities (4%) 0.0% Information (1%) 0.0% Financial Activities (5%) 0.0% Prof. & Bus. Services (7%) 3.8% Education & Health (17%) 1.6% Leisure & Hospitality (11%) -2.3% Other Services (4%) 0.0% Federal Govt. (2%) 0.0% State & Local Govt. (13%) -3.8% Note: Values in parentheses represent shares of total jobs. Transp. & Utilities (8%) Information (2%) Financial Activities (5%) 0.0% 0.0% 4.5% Prof. & Bus. Services (7%) -3.1% Education & Health (10%) 2.3% Leisure & Hospitality (9%) -8.3% Other Services (3%) Federal Govt. (6%) 0.0% 3.7% State & Local Govt. (24%) -0.9% Note: Values in parentheses represent shares of total jobs. Source: U.S. Bureau of Labor Statistics. Note: The State & Local Government sector includes jobs affiliated with K-12 & higher education and public hospitals. 9

10 Energy: Drilling Activity and Oil & Gas Jobs Remained Steady at Year End In December, the price of Opal natural gas averaged $2.61 per MMBtu for the month; WTI oil price rose to $57.36 per bbl. Natural gas production (-7.9%) declined while oil (+1.6%) expanded year-to-date, end of October; coal (+8.5%) production was tracking ahead of Oil & gas jobs were at 11,800 in November 2017, an increase of 1,600 compared to a year ago. 10

11 Natural Gas, Crude Oil, and Coal Prices $8 Opal Hub Prices ($ per MMBtu) $125 WTI Prices ($ per bbl.) $20 Powder River Coal ($ per Ton) $6 $100 $75 December Average $57.36 $15 December Average $12.10 $4 $10 $50 $2 $0 December Average $ $25 $ $5 $ As of December 21, 2017 Fiscal Year 2018 Average Price: $2.65 Calendar Year 2017 Average Price: $2.70 As of December 21, 2017 Fiscal Year 2018 Average Price: $51.40 Calendar Year 2017 Average Price: $50.63 As of December 21, 2017 Fiscal Year 2018 Average Price: $11.70 Calendar Year 2017 Average Price: $11.62 Source: Bloomberg. 11

12 WY Natural Gas, Crude Oil, and Coal Production 250,000 WY Nat Gas Withdrawals (MMCF - Monthly) 9,000 WY Oil Production (Thousands of bbls. - Monthly) 50.0 Wyoming Coal Production (Millions of Tons - Monthly) 8, ,000 7, , ,000 5, , , , Cumulative Change YTD: Oct 2017 vs. Oct % Cumulative Change YTD: Oct 2017 vs. Oct % Cumulative Change YTD: Nov 2017 vs. Nov % Source: Energy Information Administration.

13 WY Oil & Gas Jobs and Rig Counts 100 ( Rigs) Oil & Gas Jobs Oil & Gas Rigs CBM Rigs (000s Jobs) Source: WY Oil and Gas Conservation Commission; U.S. Bureau of Labor Statistics. 13

14 State Revenues: Sales & Use and Severance Tax Collections Show Improvement in First Half of Fiscal 2018 After six months of collections for fiscal 2018, sales and use taxes were $54.4 million or 17.9% ahead of last year; mining sector recorded the largest year-over-year gain. With six months of collections, severance taxes increased by $26.1 million or 9.6% in fiscal 2018 compared to

15 WY Statewide 4% Sales and Use Tax Collections: All Sectors $80 $70 $ Year High-Low Range 5-Year Avg. ( ) FY 2018 Millions $60 $63.0 $62.1 $57.3 $57.1 $50 $53.5 $40 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun After six months, FY18 total collections were $54.4 million (+17.9%) ahead of fiscal Campbell, Converse, Laramie, Natrona, Sublette, and Sweetwater counties accounted for 80.0% of the increase. Source: WY Dept. of Revenue. Note: Includes both the state and local shares of the state-wide 4% sales and use tax collections on a cash receipts basis. 15

16 WY Statewide 4% Sales and Use Tax Collections by Industry Change in Percent and Dollars (Millions) Fiscal 2018 vs. Fiscal 2017 Six Months of Collections % Change $ Change Mining (16%) Construction (2%) Manufacturing (3%) Wholesale Trade (7%) Retail Trade (32%) Transport. & Utilities (5%) Information (2%) Financial Activities (3%) Prof. & Bus. Services (1%) Leisure & Hospitality (13%) Public Administration (11%) Educ., Health, & Other (4%) 76.6% $ % 26.8% 17.9% $0.7 $2.3 $ % $ % $ % -$ % $ % -$ % 12.0% 26.1% $2.5 $4.1 $3.2 Note: Value in parentheses represents share of total collections. Statewide Change: +$54.4M or +17.9% Source: WY Dept. of Revenue. Note: Includes both the state and local shares of the state-wide 4% sales and use tax collections on a cash receipts basis. The Public Administration sector reflects taxes collected on the sale of new and used vehicles. 16

17 WY Statewide 4% Sales and Use Tax Collections by County Change in Percent and Dollars (Millions) Fiscal 2018 vs. Fiscal 2017 Six Months of Collections -11.4% -4.4% -3.6% -9.7% 3.9% 2.7% 10.2% % Change $ Change 19.6% 20.3% 23.1% 14.2% 13.4% 2.4% 11.9% 6.4% 9.0% 9.8% 8.2% 29.1% 25.1% 81.5% 79.0% 72.9% Albany (3%) Big Horn (1%) Campbell (13%) Carbon (2%) Converse (5%) Crook (1%) Fremont (4%) Goshen (1%) Hot Springs (1%) Johnson (1%) Laramie (13%) Lincoln (2%) Natrona (11%) Niobrara (1%) Park (5%) Platte (2%) Sheridan (3%) Sublette (6%) Sweetwater (10%) Teton (11%) Uinta (2%) Washakie (1%) Weston (1%) -$0.4 -$0.2 -$0.1 -$0.2 $0.4 $0.6 $0.2 $0.4 $0.7 $0.2 FY18 YTD Collections: $359.0M FY17 YTD Collections: $304.6M $1.3 $0.8 $1.0 $1.2 $1.0 $0.6 $3.2 $4.2 $5.6 $7.1 $8.2 $9.1 $9.3 Source: WY Dept. of Revenue. Note: Includes both the state and local shares of the state-wide 4% sales and use tax collections on a cash receipts basis. Value in parentheses represents share of total collections. 17

18 WY Statewide 4% Sales and Use Tax Collections: Mining Sector $25 $20 5-Year High-Low Range 5-Year Avg. ( ) FY 2018 $15 Millions $10 $5 $7.5 $8.7 $9.8 $10.9 $11.2 $10.6 $0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun After six months, FY18 total collections from the mining sector reached a total of $58.7 million, ahead of fiscal 2017 by $25.5 million or 76.6%. Source: WY Dept. of Revenue. Note: Includes both the state and local shares of the state-wide 4% sales and use tax collections on a cash receipts basis. 18

19 WY Statewide Severance Tax Collections $120 $100 After six months, FY18 year-to-date collections were $26.1 million (+9.6%) ahead of last year s pace. 5-Year High-Low Range 5-Year Avg. ( ) FY 2018 $80 Millions $60 $50.9 $50.3 $40 $48.5 $46.3 $51.1 $51.7 $20 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Source: WY Dept. of Revenue. Note: Includes severance taxes collected on all minerals in Wyoming on a cash receipts basis. 19

20 Other Indicators for the State: Personal Income, House Price Appreciation, and Building Permits Mining and wholesale trade sectors were primary drivers of personal income growth for Q3 of Wyoming s house price appreciation saw moderate annual growth of 2.3% in Q3 of 2017; the Mountain Division and the U.S. saw gains of 8.6% and 6.5%, respectively. Statewide single family units permitted decreased year-to-date through end of November 2017 in a year-ago comparison by 12; single family units declined in Casper by 8 while Cheyenne saw a decrease of 28 through November year-to-date. 20

21 Quarterly Personal Income: WY, Rocky Mtn. Region, & U.S. Percent Change from Preceding Quarter 3.0 Wyoming saw growth in 17 of the 24 BEA-defined industries in Q3 of Percent Wyoming -0.8 Rocky Mountain U.S Q Q Q Q Q3 The mining sector contributed the most to earnings growth in Q3 of 2017 with an increase of $40 million over Q2. Farm earnings had the largest decline of $21 million. Source: U.S. Bureau of Economic Analysis. 21

22 House Price Appreciation Purchase-Only Mortgages: WY, Mountain Division, & U.S. % Change from Year Ago Through Quarter 3 of 2017 Wyoming Mountain Division U.S Q3 vs Q3 1-Yr. Rate Rank Arizona +10.0% 4 Nevada +9.6% 5 Idaho +9.2% 6 Utah +9.2% 7 Colorado +8.5% 10 Montana +6.5% 15 New Mexico +5.4% 32 Wyoming +2.3% 46 Mtn Division +8.6% U.S. +6.5% Source: Federal Housing Finance Agency (FHFA) estimates using FHFA s seasonally adjusted, purchase-only house price index. Note: For the Period Ended September 30,

23 House Price Appreciation Purchase and Refinance Mortgages: WY, Casper, & Cheyenne Wyoming Casper Cheyenne % Change from Year Ago Q Q Q Q Q3 Source: Federal Housing Finance Agency (FHFA) estimates using FHFA s not seasonally adjusted, all-transactions house price index, that includes purchase and refinance mortgages. Note: For the Period Ended September 30,

24 Residential Building Permits Units Statewide: Year-to-Date through November Statewide - Units Permitted 1,755 1,582 1,714 1,601 1,408 1,396 The number of total housing units permitted year-to-date end of November 2017 increased by 8.3% compared to Single family units were behind by 0.9%. Multifamily units were ahead by 82.8% (or 144 units) during the same period compared to Total Single Family Multifamily Source: U.S. Census Bureau. 24

25 Residential Building Permits Units for Casper and Cheyenne: Year-to-Date through November Total Single Family Multifamily Casper - Units Permitted Cheyenne - Units Permitted The number of total housing units permitted for Casper year-to-date November 2017 decreased by 7.5% compared to Total units permitted for Cheyenne over the same time increased by 21.0%. Casper saw a decline (-5.3%) through the end of November 2017 of single family units while Cheyenne reported a similar drop (-7.1%) when compared to Total Single Family Multifamily 2017 Source: U.S. Census Bureau. 25

How To Find Us WYOMING DEPARTMENT OF ADMINISTRATION & INFORMATION Economic Analysis Division Department of Administration & Information State of Wyoming 2800 Central Avenue Cheyenne, WY 82002 307.777.

26 How To Find Us WYOMING DEPARTMENT OF ADMINISTRATION & INFORMATION Economic Analysis Division Department of Administration & Information State of Wyoming 2800 Central Avenue Cheyenne, WY or Visit our website at Path of solar eclipse in Wyoming, August 21, Source: Google Images. Contact: Jim Robinson Principal Economist

A summary of regional economic indicators for the state of Wyoming. FEDERAL RESERVE BANK of KANSAS CITY

THE ECONOMIC DATABOOK A summary of regional economic indicators for the state of JULY 24, 217 FEDERAL RESERVE BANK of KANSAS CITY SUMMARY OF CURRENT WYOMING ECONOMIC CONDITIONS In, the unemployment rate