WYOMING OUTLOOK Reading the Signals

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WYOMING OUTLOOK Reading the Signals
Buck McVeigh Department of Administration
Information Economic Analysis Division
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• "The first six months of '09 will be very
  painful, the second six months will just be
  painful, and 2010 will be uncomfortable."
• -Mark Zandi, Chief Economist
• Moody's Economy.com

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Survival of the FittestHow long can we hold our
breath?
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Non-Farm Wage Salary EmploymentAnnual Percent
Change by Month
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P2 P1 B D NM
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Wyoming 389,645 U.S. 180,941,800
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5.1 in 2006 (highest since 1981)
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13,400
10,800
8,500
8,300
6,200
6,100
5,400
2,500
3,000
2,100
Forecast
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Wyoming is definitely NOT immune to the national
recession

• Negative wealth effect stock decline (not
  housing market).
• Depressed energy prices different from many
  other recessions and 2008. Weak global demand.
• Psychological media - mass job loss/ business
  failure worries.
• Low consumer confidence retail sales are still
  holding, but Wyoming consumers are tightening.
  Downturn in new and luxury auto purchases
  evident.
• Tighter credit yet not like other parts of the
  country.
• Housing market relatively better shape than other
  states (prices/foreclosures). Foreclosures rate
  is still low, but increasing rapidly. Sales and
  housing starts declined over 20 percent from
  previous year.

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Outlook

• Energy price and production is the key component.
  
• Slowing mining industry housing market will
  halt growth in economy.
• Mining downturn will funnel into rest of the
  states economy.
• Carbon emission legislation - effect on coal
  demand?
• State revenues will be lower due to falling
  energy prices, weak economy.
• Low energy prices will create problems for
  several years.
• Other indicators to decline in near-term.
• Population growth over 1. In-migration is
  expected during national recession.
• Employment growth to flatten. Energy sector
  employment will decline throughout 2009, possibly
  into 2010 will affect other industries such as
  construction, trade, transportation.
• Unemployment rate will increase but remain well
  under national level.
• Income growth under 3 loss of high-paying
  energy-related jobs.
• Inflation will moderate but likely continue to
  outpace U.S.
• Housing affordability is declining, but is the
  most affordable in the West.
• Low industrial diversification - high exposure to
  downturn in energy market.
• Lack of key service sector jobs low number
  professional business/healthcare jobs will delay
  recovery.
• Lack of non-energy growth drivers - create
  limited opportunities for skilled/educated young
  people in low population/rural state.
• Fiscal Stimulus how much will it help?

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In a Red State Rolling in Green, a Relaxed
Attitude
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THANK YOU!
Economic Analysis Division EAD Wyomings
Source for Business and Economic Information
http//eadiv.state.wy.us ead_at_state.wy.us (307)
777-7504