Projections for Western North Dakota Bottineau County

Transcription

1 Projections for Western North Dakota Bottineau County

2 Acknowledgments Analysts Dean Bangsund, NDSU Dr. Nancy Hodur, NDSU Funders North Dakota Association of Oil and Gas Producing Counties North Dakota Energy Infrastructure and Impact Office Vision West ND Moderators Deb Nelson, Vision West ND Administrator Host and Coordinator Center for Rural Entrepreneurship and DLN Consulting, Inc.

3 Employment, Housing & Population Projections Department of Agribusiness and Applied Economics North Dakota State University Dean Bangsund Dr. Nancy Hodur Research Scientist Ph: Research Assistant Professor Ph:

4 Baseline Conditions Population Economy Workforce characteristics Employment Oil and gas industry activity

5 North Dakota Population Change ND population growth outpaced all 50 states in the last four years 13 percent increase in 5 years 18 percent increase in 15 years Communities in oil and gas producing counties experienced even more rapid growth than statewide

6 Recent Population Trends Slight declines since percent increase since 2010

7 Changing Characteristics of Population State has gotten younger the only state to get younger from 2014 to 2015 For the first time since the early 1980s the number of children age 14 and under grew A sustained growth in birth rates began in 2002, 11,352 births in 2014 Increase in birth rate a result of the increase in the year cohort Continuation of aging of baby boomers Oldest boomers hit age 65 in 2011 Youngest will turn 65 in 2029 Baby boomers will influence future housing needs Population growth being driven by two factors Natural births Migration

8 Economy: Gross State Product GSP growth rate that far exceed historical trends Fastest growing state economy for the previous 4 years Statewide personal income grew by 5 percent from 2013 to 2014 Personal income grew faster than the national average in 90 percent of North Dakota counties, half grew at a rate twice that of the national average GSP decline of 6 percent in 2014 Low commodity prices in agriculture and oil and gas Other sectors saw modest growth

9 Workforce Workforce defined as population age 16 and older does not include non-resident workers or self-employed Work force has grown by 10 percent or 37,000 workers Workforce participation rate is 71 percent, the highest in the nation, very important statistic, little excess capacity Have a better understanding of the oil and gas industry workforce know there is a substantial non-resident workforce Did lose jobs in ,580 Losses concentrated in oil and gas producing counties Many of the lost jobs were held by non-resident workers Unemployment rates are still low Workforce participation rates remain high Steady labor force numbers and workforce characteristics study reinforce that notion Labor markets have improved More jobs than active resumes statewide

10 All Employment (Public and Private) R2 = Average annual change from = 4,900 jobs Average annual change from = 15,000 jobs

11 Production has declined, but production is 8 times what it was in 2007 Production as of June 20-16

12 Summary of current conditions Despite the downturn in oil and gas industry activity the state s population and economy is much larger than it was just a few years ago. Population characteristics have changed which may influence future planning We have better data and a better understanding of workforce characteristics, economic drivers Growth and industry activity has moderated substantially Dealing with uncertainty of new normal and uncertain future and what may happen under various macro-economic conditions, e.g. oil prices increase Change and growth has not been uniform, Bottineau County has not experienced similar growth Economic development and economic diversification as important as ever

13 So What is New for Our Project? Cohort component model Actual fertility and mortality rates Recent migration trends Workforce by place of work and place of residency Verified and adjusted housing supply data Include data on farmers and ranchers Oil and Gas employment numbers (ND Job Service) Housing Needs Assessment (NDSU) and general population forecast (ND Dept of Commerce-Census Office) NDSU Workforce characteristics study

14 Actual Fertility and Mortality Rates for Cohort Component Population Model current population + births deaths + net migration (in-migration out migration) = population new year

15 Net Migration current population + births deaths + net migration (in-migration out migration) = population new year

16 Verifying Total Housing Units Housing Inventory Rational: Concerns regarding accuracy of U.S. Census estimates of total housing units Collected actual building permit data from 12 largest cities in the state Used same computational data as the Census with actual building permit data rather than building permit data from the U.S. Census Bureau s Building Permit Survey For most jurisdictions, Census Bureau s estimates were accurate and within a few percentage points Especially true for cities with stable growth Adjusted census estimates to reflect actual housing inventory for estimates of future housing from cities and counties where data was collected For all other counties 2014 Census estimates were used for estimate of baseline housing inventory

17 Job Service Data Oil and Gas Employment

18 Forecasting Model and Research Methods Employment Modeling (retained our previous model) Dynamic adjustments for efficiencies in oil and gas industry Include other economic sectors Include secondary job creation New population and housing models

19 How Does All This Work? Step 1: What is the size of current workforce? Resident Population Participation Rate Employment Rate Resident Workforce Total Workforce Commuters Outside the region Delineated by segment of industry Non-resident Workforce

20 Step 2: How much workforce do we need? Demand Supply Future Labor Requirements Existing Labor Pool Future Scenario using Employment Model Residents Greater Less Equal Resident Workforce Nonresidents Greater Less Equal Nonresident Workforce Employment Change combined with Workforce Characteristics

21 Step 3: Incorporate labor force (needs/changes) into cohort model. Start (2015) Employment Workforce Needed Migration Period 2 Period 3 Employment Employment Workforce Needed Workforce Needed Workforce Present Workforce Present Needs/changes Needs/changes New Population New Population Available Workforce Available Workforce New Population Available Workforce

22 Step 4: Estimate housing inventory requirements. residents commuters Employment permanent service Population Permanent Single Family Apartments Mobile Housing Requirements Housing Forecasts utilized the models and assumptions applied in the North Dakota Statewide Housing Needs Assessment.

23 What future possibilities are we considering? Profitability (prices and costs)? Rig counts and drilling activity? Re-fracking? CO2 EOR? Well counts? Oil production? Restrictions on fracking?

24 Future Price Projections? Much Uncertainty.

25 Examined Three Sets of Future Conditions Scenarios* Prices** Wells Completed Per Year Rig Counts Per Year First Purchaser Prices in ND Low Moderate High Low High Low Price $25-$ Moderate Price $60-$90 1,000 1,250 1, High Price $>90 1,700 2,000 2, * Price ranges are approximate as many factors influence development activities. * Scenarios do not include re-fracking, CO2 EOR, or restrictions on fracking.

26 *Prices are approximate

27 Results/Findings Employment Trends Petroleum as a Percentage of All Employment Farm and Ranch Proprietors Non-farm and Ranch Proprietors Commuter Data Where people live that work in Bottineau County Where people work that live in Bottineau County Industry Employment Population Housing

28 Farm and Ranch Proprietors

29 Non-farm and Ranch Proprietors and Non-farm and Ranch Proprietors as a Percentage of Total Employment

30 Farm and Ranch Proprietors and Wage and Salary Employment

31 Oil and Gas Industry Employment as a Percentage of All Wage and Salary Employment

32 Wage and Salary Employment

33 Wage and Salary Employment, by County and State Planning Region

34 Annual Change in Wage and Salary Employment

35 Change in Employment Bottineau County Total Percent Change Average Annual Change in Jobs Average Annual Percent Change in Jobs

36 Commuter Data Where People Work and Where They Live (in flows)

37 Commuter Data Where People Live and Where They Work (out flows)

38 What does this mean? Employment at a specific location may/may not translate to residents of that location Employment in one location can affect population in another location Workforce is not limited to those residing in the immediate area Our modeling incorporates locational dynamics

39 Oil and Gas Industry Over Range of Potential Prices

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44 Employment Forecasts, Low, Moderate and High Price Scenario

45 Bottineau County Employment Projections Scenario Change from Average annual growth rate Jobs % % Low Price 2,377 2, Moderate Price 2,377 2, High Price 2,377 31,

46 Population Projections: Low, Medium and High Price Scenarios

47 Bottineau County Population Projections Change from people % Average annual growth rate % Scenario Low Price 6,636 7, Moderate Price 6,636 7,682 1, High Price 6,636 8,195 1,

48 Projected Total Housing Units Added Low Price Scenario

49 Projected Total Housing Units Added Moderate Price Scenario

50 Projected Total Housing Units Added High Price Scenario

51 Recent Trends and Other Research Findings Household Composition Trends in the mix of housing of housing Workforce characteristics Changing makeup of the population, results of state wide housing needs assessment Seniors Younger population First-time homebuyers Cost-burdened seniors Age of housing inventory

52 Characteristics: Household composition Continued increase in non-family household Continued increase in married with out children First increase in household that are married with children Potentially substantial implications for future mix of housing Source: U.S. Census Bureau, 2014 ACS 5-Year Estimates

53 Historic Distribution of Total Housing Units, by Type of Housing Source: U.S. Census Bureau, 2014 ACS 5-Year Estimates

54 Results from Workforce Characteristics Study Source: Assessment of the Oil and Gas Industry Workforce,

55 Non-Resident Workforce Intentions to Move to North Dakota YE S NO Source: Assessment of the Oil and Gas Industry Workforce,

56 Type of Housing North Dakota : n=1,158 Elsewhere: n=489 Source: Assessment of the Oil and Gas Industry Workforce,

57 Projected Change in Population, by Age, Source: 2015 North Dakota Housing Needs Assessment

58 Projected Change in the Number of Households, by Household Income, Source: 2015 North Dakota Housing Needs Assessment

59 Projected Change in Number of Households By Type of Homebuyer, Source: North Dakota Statewide Housing Needs Assessment

60 Cost-Burdened Seniors Source: U.S. Census Bureau, 2014 ACS 5-Year Estimates

61 Total Occupied Housing Units, by Year Built Source: U.S. Census Bureau, 2014 ACS 5-Year Estimates

62 Key Findings/Implications Characteristics of population are changing Increase in younger cohort has implications for housing, childcare, schools Aging of the baby boomers has substantial implications for housing for seniors Affordable housing a key issue, substantial number of cost burdened seniors Age of housing stock may be a consideration Workforce characteristics and data on commuters and non-resident workers suggest workforce will not be just local residents Communities should plan for a high degree of commuters and non-resident workers in the high price scenario Service population will likely continue to be an a more appropriate measure of public service requirements

63 Key Findings/Implications Low price environment is steady and stable with growth rates that exceed the period Moderate prices may produce excitement and challenges Sustained high prices may bring a return to challenges faced from Average annual growth of 3 percent challenging Likely result in increased and rapid demand for temporary housing The industry is becoming more efficient and will likely lower lab0r requirements in the future As the industry get larger, it becomes more stable, larger base in production and operations

64 Additional Resources Available North Dakota Statewide Housing Needs Assessment eds.html North Dakota Compass Assessment of the Oil and Gas Industry Workforce, North Dakota Kids Count NDSU Department of Agribusiness and Applied Economics Vision West NDSU Center for Social Research sion-centers ND Department of Commerce North Dakota Job Service: North Dakota s Oil and Gas Economy b/index.asp?docid=578 Census on the Map

65 Nancy Hodur, Dean Bangsund,

66 Thanks for Listening! th Avenue West, Suite G Dickinson ND VisionWest@dlnconsulting.com Website: