West Virginia s Economic Outlook John Deskins, Ph.D. West Virginia Economic Development Council January 2016 Bureau of Business & Economic Research College of Business & Economics West Virginia University www.be.wvu.edu/bber Copyright 2016 by WVU Research Corporation
Where Do We Stand? Jobs
Total Employment 710 West Virginia, Thousands, 4-quarter Moving Average United States, Millions 144 West Virginia 142 700 140 138 690 136 US 134 680 132 130 670 128
West Virginia Employment Growth by Sector Construction Education & Health Services Professional & Business Services 2004-2014 2015-2020 Leisure & Hospitality Total Natural Resources & Mining Manufacturing Government Trade, Transportation & Utilities Other Services Information Financial Activities -3% -2% -1% 0% 1% 2% 3% Average annual growth, %
Unemployment Rate 10 % of Labor Force 9 US 8 7 West Virginia 6 5 4 3
Where Do We Stand? Income and Output
Per Capita Personal Income (2014) WA MT ND ME OR ID MN VT NH WY SD WI MI NY CT MA 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 LA AK < 40.0 HI TX MS AL GA FL Per Capita Personal Income (ths $) 40.0-45.9 46.0-49.9 > 50.0 US = $46.0
Per Capita Personal Income Growth 170 Index, 2000=100 160 West Virginia 150 140 130 US 120 110 100 90
Forecast Growth by Source of Real Personal Income, 2015-2020 Transfer Payments Investment Income Residence Adjustment Total Personal Income Proprietor's Income Wages & Salaries Pensions 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Average Annual Growth, %
Share of Total Personal Income by Source Proprietor's Income 6% 2000 2020 Residence Proprietor's Income 7% Residence Adjustment 2% Pensions 12% Investment Income 16% Transfer Payments 21% Wages & Salaries 44% Pensions 11% Investment Income 13% Transfer Payments 27% Wages & Salaries 40%
Real GDP Growth 108 Index, 2007=100 West Virginia 106 104 102 100 US 98 96
Real GDP Growth 108 Index, 2007=100 West Virginia 106 104 West Virginia w/o mining 102 100 US 98 96
Where Do We Stand? Population and Aging
Total Population 330 United States, Millions of Residents West Virginia, Millions of Residents 2.10 310 2.05 290 US 2.00 270 1.95 250 1.90 230 210 West Virginia 1.85 190 1.80 170 1.75 150 1.70
West Virginia Population Growth by Age 2.5% Average annual growth, % 2.0% 2004-2014 2015-2020 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% 0 to 17 yrs 18 to 44 yrs 45 to 64 yrs 65 and older
Eastern Panhandle and North-Central Area Adding Residents 180 Index, 1990=100 170 160 Eastern Panhandle 150 140 130 120 110 Greater Morgantown Area 100 Rest of WV 90
Where Do We Stand? Energy
170 West Virginia Coal and Natural Gas Production Coal Production (Millions of Short Tons, Annualized) Natural Gas Production (Billions of Cubic Feet) 600 160 150 140 Coal Natural Gas 500 400 130 300 120 110 100 200 100 90 0
140 Millions of short tons, annualized West Virginia Regional Coal Production 120 Southern WV 100 80 60 40 Northern WV 20 0
Coal Mine Worker Productivity 7.5 Short tons per miner hour 7.0 6.5 US 6.0 5.5 5.0 4.5 4.0 3.5 Northern WV 3.0 2.5 Southern WV 2.0 1.5
West Virginia Energy Sector GDP 12 Real GDP (Billions, 2009$) 10 8 6 Oil & Gas 4 Coal 2 0
Natural Gas Production by County, 2014
Employment Growth: Top 10 Gas Counties v. Other 45 108 Index, 2001=100 106 Top 10 Gas Producers 104 102 100 Rest of WV 98 96
Job 1: Small Business Growth and Development
West Virginia Small Business Births and Deaths 5.0 Thousands 4.5 Deaths 4.0 3.5 Births 3.0 2.5 2.0
Job 2: Human Capital Education and Health
West Virginia Mississippi Alabama Arkansas New Mexico South Carolina Kentucky Tennessee Arizona Florida Michigan North Carolina Oklahoma New York Louisiana Delaware Oregon Hawaii Georgia California Pennsylvania Ohio US Washington Nevada Idaho Indiana Montana New Jersey Maine Missouri Rhode Island Illinois Texas Massachusetts Connecticut Virginia Maryland Vermont Alaska Colorado Utah Wyoming Wisconsin Kansas New Hampshire South Dakota Minnesota Iowa Nebraska North Dakota Labor Force Participation Rate, 2014 75 Percent of Civilian Non-institutionalized Population 70 65 63 60 53 55 50 45 40
Share of People 25 to 34 Years Old with a Bachelor s Degree or Higher, 2013 WA MT ND ME OR ID MN MI 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 BA Degree or Higher AK TX LA 21.1-25.0 25.1-30.0 FL 30.1-35.0 35.1-71.1 HI
All-Cause Mortality Rate, 2013 WA MT ND ME OR ID MN VT NH WY SD WI MI NY MA RH CT NE IA PA NJ NV UT IL IN OH MD DC 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 832-960 754-832 720-754 679-720 590-679
WV KY AR MS AL ME OK TN NM LA MI MO SC OR IN MT OH NC VT SD ID NV WA GA PA DE US AZ FL KS NH WY AK TX WI RI IO VA CO MA IL NE DC NY MD MN UT ND CA CT NJ HI Share of Population 18 to 64 Years Old with Disability, 2013 20 18 18.1 16 14 12 10 10.5 8 6
Job 3: Recognize That A One-Size-Fits-All Economic Development Strategy Will Not Work
Hancock Brooke Annual Real Personal Income Growth, 2004-2014 Ohio Marshall Monongalia Morgan Berkeley Wetzel Marion Preston Mineral Hampshire Jefferson Tyler Taylor Pleasants Harrison Doddridge Tucker Barbour Ritchie Wood Lewis Wirt Gilmer Upshur Randolph Calhoun Grant Pendleton Hardy Mason Jackson Roane Braxton Webster Putnam Clay Pocahontas Cabell Kanawha Nicholas Wayne Lincoln Boone Fayette Greenbrier 2004-14 Average Annual Personal Income Growth 0.0% - < 1.0% Mingo Logan Raleigh Summers Wyoming Mercer Monroe 1.0% - < 1.9% 1.9% - < 2.3% 2.3% - < 2.8% McDowell
Job 4: Evaluate Our Tax and Regulatory Systems Fully
Tax Policy and Other Reforms Classic Tax Reform: Broad Tax Base and Low Tax Rates Simplicity Right to Work? Municipal Finance Reform? $1 Billion Public Unfunded Pension Liabilities Municipal Consolidation? Road Funding Toll Roads?
Job 5: Ensure that West Virginia is Open to the World and Aggressively Pursue Export Opportunities
14 Billions of $ West Virginia Exports 12 11.9 10 9.6 8.9 8 6 4 3.0 2.9 2.9 3.0 4.0 3.8 3.8 4.5 6.2 5.3 7.0 7.6 6.0* 2 0