West Virginia s Economic Outlook John Deskins, Ph.D. Contractor s Association of West Virginia July 2018 Bureau of Business & Economic Research College of Business & Economics West Virginia University www.be.wvu.edu/bber Copyright 2018 by WVU Research Corporation
Keys to Understanding Our State #1 - Recent Job Trends
Total Employment West Virginia 715 West Virginia, Thousands United States, Millions 155 710 705 West Virginia 150 145 700 695 690 685 US 140 135 130 680 125 675 120
Keys to Understanding Our State #2 - Energy
West Virginia Coal and Natural Gas Output 170 Coal Production (Millions of Short Tons, SAAR) Natural Gas Production (Billions of Cubic Feet) 650 160 150 140 130 120 110 100 90 80 70 Coal Natural Gas 600 550 500 450 400 350 300 250 200 150 100 50 0
Key Drivers of Demand Environmental Regulatory Climate Natural Gas Boom International Demand
140 West Virginia Regional Coal Production Millions of short tons, seasonally adjusted annualized rate 120 Southern WV 100 80 60 40 Northern WV 20 0
3.0 Natural Gas Production States in Marcellus/Utica Shale Trillions of cubic feet 2.5 2.0 Ohio 1.5 West Virginia 1.0 0.5 Pennsylvania 0.0
Keys to Understanding Our State #3 - Industrial Diversification (Or Lack Thereof)
Real GDP Growth 114 Index, 2007=100 112 110 108 West Virginia 106 104 102 100 US 98 96
Real GDP Growth 114 Index, 2007=100 112 110 108 West Virginia 106 104 102 100 US WV without coal and gas 98 96
Keys to Understanding Our State #4 - Income Growth and Composition
Forecast Growth by Major Source of Real Personal Income, 2017-2022 Transfer Payments Personal Income Wages & Salaries Proprietor's Income 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% Average Annual Growth, %
Components of Personal Income 2002 2022 Proprietor's Income 7% Other Labor Income 12% Investment Income 14% Transfer Payments 23% Residence Adjustment, 2% Proprietor's Income 6% Other Labor Income 10% Wages & Salaries 42% Investment Income 14% Residence Adjustment, 4% Transfer Payments 26% Wages & Salaries 40%
Keys to Understanding Our State #5 - Demographics
10 % of Labor Force Unemployment Rate 9 US 8 7 West Virginia 6 5 4 3 Bureau of Business and Economic Research
West Virginia Mississippi Alabama New Mexico Arkansas South Carolina Louisiana Kentucky Florida Arizona Tennessee New York Oklahoma Michigan North Carolina California Delaware Nevada Hawaii Pennsylvania US Ohio New Jersey Georgia Montana Oregon Maine Texas Missouri Washington Idaho Indiana Rhode Island Illinois Virginia Massachusetts Wyoming Alaska Connecticut Kansas Vermont Maryland New Hampshire Colorado Iowa Wisconsin Nebraska South Dakota Utah Minnesota District of Columbia North Dakota Labor Force Participation (2017) 75 Percent of Civilian Non-institutionalized Population 70 65 63 60 53 55 50 45 40
Share of Residents 25 to 34 Years Old with a Bachelor s Degree or Higher WA MT ND ME OR ID MN VT NH WY SD WI MI NY MA CT RI CA NV UT CO NE KS IA MO IL IN KY OH WV PA NJ MD DE VA AZ NM OK AR MS TN AL GA SC NC % With a BS Degree or Higher AK TX LA 21.9-27.1 27.2-31.9 FL 32.0 35.9 36.0-50.1 HI
All-Cause Mortality Rate WA MT ND ME OR ID MN VT NH WY SD WI MI NY MA CT RI NE IA PA NJ NV UT IL IN OH MD DE CA CO WV KS MO KY VA AZ NM OK AR TN SC NC MS AL GA AK HI TX LA FL Age-Adjusted Deaths per 100,000 Population 830-954 748-817 721-747 678-716 589-671
Opioid-Overdose Deaths, U.S. and WV 40 Deaths per 100,000 Population 35 30 25 West Virginia 20 15 10 U.S. 5 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Kaiser Family Foundation analysis of Centers for Disease Control and Prevention (CDC), National Center for Health Statistics. Note: Rates are age-adjusted, except those for 2005 and 2009, which are calculated using data from WV Health Statistics Center.
Keys to Understanding Our State #6 - Regional Variation
Hancock Brooke Southern Coalfields Ohio Marshall Morgan Berkeley Wetzel Monongalia Marion Preston Mineral Hampshire Jefferson Wood Tyler Pleasants Doddridge Ritchie Harrison Taylor Barbour Tucker Grant Hardy Wirt Calhoun Gilmer Lewis Upshur Randolph Pendleton Mason Jackson Roane Braxton Webster Putnam Clay Pocahontas Cabell Kanawha Nicholas Wayne Lincoln Mingo Logan Boone Wyoming Fayette Raleigh Summers Greenbrier Monroe Real Wages: 27% since 2010Q1 Employment: 21% Mercer McDowell
Hancock Brooke New River Gorge Area Ohio Marshall Morgan Berkeley Wetzel Monongalia Marion Preston Mineral Hampshire Jefferson Wood Tyler Pleasants Doddridge Ritchie Harrison Taylor Barbour Tucker Grant Hardy Wirt Calhoun Gilmer Lewis Upshur Randolph Pendleton Mason Jackson Roane Braxton Webster Putnam Clay Pocahontas Cabell Kanawha Nicholas Wayne Lincoln Mingo Logan Boone Wyoming Fayette Raleigh Summers Greenbrier Monroe Real Wages: 2% since 2010Q1 Employment: 3% Mercer McDowell
Hancock Brooke Metro Valley Ohio Marshall Morgan Berkeley Wetzel Monongalia Marion Preston Mineral Hampshire Jefferson Wood Tyler Pleasants Doddridge Ritchie Harrison Taylor Barbour Tucker Grant Hardy Wirt Calhoun Gilmer Lewis Upshur Randolph Pendleton Mason Jackson Roane Braxton Webster Putnam Clay Pocahontas Cabell Kanawha Nicholas Wayne Lincoln Mingo Logan Boone Wyoming Fayette Raleigh Summers Greenbrier Monroe Real Wages: 5% since 2010Q1 Employment: 1% Mercer McDowell
Hancock Brooke North-Central Ohio Marshall Morgan Berkeley Wetzel Monongalia Marion Preston Mineral Hampshire Jefferson Wood Tyler Pleasants Doddridge Ritchie Harrison Taylor Barbour Tucker Grant Hardy Wirt Calhoun Gilmer Lewis Upshur Randolph Pendleton Mason Jackson Roane Braxton Webster Putnam Clay Pocahontas Cabell Kanawha Nicholas Wayne Lincoln Mingo Logan Boone Wyoming Fayette Raleigh Summers Greenbrier Monroe Real Wages: 12% since 2010Q1 Employment: 6% Mercer McDowell
Hancock Brooke Eastern Panhandle Ohio Marshall Morgan Berkeley Wetzel Monongalia Marion Preston Mineral Hampshire Jefferson Wood Tyler Pleasants Doddridge Ritchie Harrison Taylor Barbour Tucker Grant Hardy Wirt Calhoun Gilmer Lewis Upshur Randolph Pendleton Mason Jackson Roane Braxton Webster Putnam Clay Pocahontas Cabell Kanawha Nicholas Wayne Lincoln Mingo Logan Boone Wyoming Fayette Raleigh Summers Greenbrier Monroe Real Wages: 21% since 2010Q1 Employment: 16% Mercer McDowell
Hancock Brooke Shale Gas Boom Region Ohio Marshall Morgan Berkeley Wetzel Monongalia Marion Preston Mineral Hampshire Jefferson Wood Tyler Pleasants Doddridge Ritchie Harrison Taylor Barbour Tucker Grant Hardy Wirt Calhoun Gilmer Lewis Upshur Randolph Pendleton Mason Jackson Roane Braxton Webster Putnam Clay Pocahontas Cabell Kanawha Nicholas Wayne Lincoln Mingo Logan Boone Wyoming Fayette Raleigh Summers Greenbrier Monroe Real Wages: 13% since 2010Q1 Employment: 2% Mercer McDowell
Keys to Understanding Our State #7 - Exports
14 Billions of $ West Virginia Exports 12 12.1 10 9.8 9.1 8 7.1 7.8 7.2 6 4 3.0 3.0 2.9 3.1 4.1 3.8 3.8 4.6 6.3 5.4 5.9 5.0 2 0
Keys to Understanding Our State #8 - Entrepreneurship
Employment in West Virginia by Employer Type Government, 22% Small Business, 39% Large Business, 39%
West Virginia Small Business Births and Deaths 5.0 Thousands Births 4.5 4.0 Deaths 3.5 3.0 2.5 2.0 Source: US Small Business Administration Office of Advocacy
Keys to Understanding Our State #10 - Where Do We Go From Here?
West Virginia Employment Growth Forecast by Sector Natural Resources & Mining Construction Professional & Business Services Manufacturing Education & Health Services Information Total Leisure & Hospitality Other Services Government 2007-2017 2018-2023 Trade, Transportation & Utilities Financial Activities -3% -2% -1% 0% 1% 2% 3% Average annual growth, %
What I Think About Think Positive: We re Improving! But Think Realistic: Real Sense of Urgency Think People: Human Capital Investment Think Infrastructure Think Good Government Think Regionally Think Entrepreneurship Think Exports Think Midstream and Downstream Gas Think Manufacturing Carbon Fiber Reinforced Plastics Think Tourism: Adventure Tourism/High Income/Second Homes Think New Industries: Data Centers