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
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
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 2017. After six months of fiscal 2018, year-to-date sales & use tax and severance tax collections were outpacing fiscal 2017. Three consecutive quarters of personal income growth observed in 2017. 3
Coincident Index: WY, CO, NE, & U.S. Year-over-Year Percent Change in Index Values 8.0 Through November 2017 Percent 6.0 4.0 2.0 0.0-2.0-4.0-6.0 U.S. Colorado Nebraska 3.1 2.6 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. -8.0 Wyoming -10.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Federal Reserve Bank of Philadelphia. 4
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 2016. 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
Nonfarm Employment: Casper, Cheyenne, WY, & U.S. Seasonally Adjusted Through November 2017 115 110 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% 105 100 95 90 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Bureau of Labor Statistics. Note: Shaded area represents U.S. recession. *Refers to pre-recession peak. 6
WY and U.S. Nonfarm Employment Through End of November 2017; Seasonally Adjusted 6.0 4.0 Nonfarm Job Growth Percent Change Year-over-Year 2.0 0.0 1.4 Percent -2.0-4.0-6.0-8.0-6.4 Wyoming 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 U.S. -0.6 Source: U.S. Bureau of Labor Statistics. Change in Jobs (000) 20.0 10.0 0.0-10.0-20.0 8.8-12.0-3.3 4.3 3.0 0.7 3.8 WY Nonfarm Job Change Year-over-Year -2.0-11.5-9.2-7.9-6.3-3.7-2.8-3.8-3.0 Thousands of Jobs 2008 2009 2010 2011 2012 2013 2014 2015 2016 Jan17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov -1.8-2.8-1.6-1.7 7
WY Employment Change: Nov 2017 vs. Nov 2016 Year-over-Year; Seasonally Adjusted # of Jobs % Change Mining (7%) 2,200 12.4% Construction (7%) -200-1.0% Manufacturing (3%) 200 2.2% Wholesale Trade (3%) -300-3.6% Retail Trade (11%) -500-1.6% Transp. & Utilities (5%) -600-4.1% Information (1%) -100-2.7% Financial Activities (4%) 300 2.8% Prof. & Bus. Services (6%) 300 1.7% Education & Health (10%) -500-1.8% Leisure & Hospitality (12%) -1,200-3.4% Other Services (4%) 0 0.0% Federal Govt. (3%) 0 0.0% State & Local Govt. (23%) -1,300-2.1% 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
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
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 2016. Oil & gas jobs were at 11,800 in November 2017, an increase of 1,600 compared to a year ago. 10
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 $2.61 2013 2014 2015 2016 2017 $25 $0 2013 2014 2015 2016 2017 $5 $0 2013 2014 2015 2016 2017 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
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 45.0 200,000 7,000 40.0 35.0 6,000 30.0 150,000 5,000 25.0 4,000 20.0 100,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 3,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 15.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Cumulative Change YTD: Oct 2017 vs. Oct 2016-7.9% Cumulative Change YTD: Oct 2017 vs. Oct 2016 +1.6% Cumulative Change YTD: Nov 2017 vs. Nov 2016 +8.5% Source: Energy Information Administration.
WY Oil & Gas Jobs and Rig Counts 100 ( Rigs) Oil & Gas Jobs Oil & Gas Rigs CBM Rigs (000s Jobs) 25 11.8 20.6 80 18.4 20 60 15 40 10 20 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 Source: WY Oil and Gas Conservation Commission; U.S. Bureau of Labor Statistics. 13
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 2017. 14
WY Statewide 4% Sales and Use Tax Collections: All Sectors $80 $70 $65.9 5-Year High-Low Range 5-Year Avg. (2013-17) 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 2017. 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
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% $25.5 8.9% 26.8% 17.9% $0.7 $2.3 $4.0 8.4% $8.9 14.9% $2.5-13.6% -$0.9 17.3% $1.8-4.4% -$0.1 5.6% 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
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
WY Statewide 4% Sales and Use Tax Collections: Mining Sector $25 $20 5-Year High-Low Range 5-Year Avg. (2013-17) 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
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. (2013-17) 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
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 2017. 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
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 2017. Percent 2.0 1.0 0.0 1.7 1.7 1.4 0.9 0.9 0.7 0.8 0.6 0.6 0.7 0.4 0.1 0.0-1.0-2.0-0.4 Wyoming -0.8 Rocky Mountain U.S. 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 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
House Price Appreciation Purchase-Only Mortgages: WY, Mountain Division, & U.S. % Change from Year Ago 15.0 10.0 5.0 0.0-5.0-10.0-15.0 Through Quarter 3 of 2017 Wyoming Mountain Division U.S. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 8.6 6.5 2.3 2017 Q3 vs. 2016 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, 2017. 22
House Price Appreciation Purchase and Refinance Mortgages: WY, Casper, & Cheyenne 8.0 6.0 4.0 4.8 Wyoming Casper Cheyenne 4.4 6.4 4.2 4.9 % Change from Year Ago 2.0 0.0 2.0 2.2 1.9 1.4 1.2-2.0-4.0-1.8-2.1-2.9-2.6-3.1 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 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, 2017. 23
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 2016. Single family units were behind by 0.9%. Multifamily units were ahead by 82.8% (or 144 units) during the same period compared to 2016. 154 174 318 2015 2016 2017 2015 2016 2017 2015 2016 2017 Total Single Family Multifamily Source: U.S. Census Bureau. 24
Residential Building Permits Units for Casper and Cheyenne: Year-to-Date through November 286 2015 373 160 2016 148 2017 244 2015 152 144 2016 2017 42 2015 8 4 2016 Total Single Family Multifamily 442 535 Casper - Units Permitted Cheyenne - Units Permitted 341 395 367 2017 The number of total housing units permitted for Casper year-to-date November 2017 decreased by 7.5% compared to 2016. 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 2016. 168 32 47 2015 2016 2017 2015 2016 2017 2015 2016 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 307.777.7504 or ai-ead-info@wyo.gov Visit our website at http://ai.wyo.gov/economic-analysis Path of solar eclipse in Wyoming, August 21, 2017. Source: Google Images. Contact: Jim Robinson Principal Economist 307.777.7221 jim.robinson@wyo.gov 26