West Virginia economic forecast: sluggish job growth in near term changing to moderate growth through 2020
West Virginia’s economy is expected to remain sluggish over the near term before changing course and producing moderate job growth through 2020, according to the latest forecast from the West Virginia University College of Business and Economics. The forecast was released at the 22nd Annual West Virginia Economic Outlook Conference in Charleston October 1.
“West Virginia has lost jobs over the past two years or so, as losses in coal have overwhelmed gains in other sectors,” said Dr. John Deskins, director of the WVU Bureau of Business and Economic Research (BBER). “But we believe that these losses will eventually taper off and West Virginia’s economy will slowly begin to add jobs going forward, posting job growth of around 0.5 percent annually in the coming years.”
“Despite the overall loss of jobs in 2014,” Deskins said, “overall economic output in the state grew at a very solid pace, driven in large part by skyrocketing gains in West Virginia’s natural gas industry.”
However, Deskins cautioned, there are factors that present uncertainty for West Virginia and all states. “Lingering risks to the global and U.S. economies, the inevitable rise in interest rates, and the environmental regulatory climate create uncertainty that clouds our forecast,” Deskins said.
“The natural resources and mining sector has been extremely volatile over the past few years and this volatility will continue to prevail at least through next year,” said Brian Lego, BBER research assistant professor. “Natural gas output skyrocketed during the past several years, resulting in the creation of a significant number of jobs in the industry and areas such as the Northern Panhandle and portions of North-Central West Virginia.
“Unfortunately, these gains have not been enough to make up for the several thousands of coal industry jobs lost since late-2011. Additionally, conditions in the state’s oil and gas sector have been much less robust over the course of 2015 due to a sharp downturn in prices, and the forecast calls for these low prices to weigh on the sector’s growth for the next year or so.”
Lego went on to explain that construction will tend to enjoy the fastest rate of job growth in the state in coming years, followed primarily by service-providing sectors.
“Personal income per capita in the state is still close to 80 percent of the national average, but given the relatively strong performance the state has enjoyed over the past five or six years, the ratio of state personal income per capita relative to the national average is at its highest level since data collection began in the late 1920s,” Deskins said.
Despite a significant amount of positive news, the West Virginia Economic Outlook 2016 also highlights several key challenges the state’s economy faces.
“One prominent challenge is the fact that a very low proportion of West Virginians either has a job or is looking for a job. Several other concerns relate to fundamental demographic characteristics, such as the aging of our population, the expected population decline in coming years and poor health outcomes,” Deskins said.
“It is also important to recognize that the state has performed very unevenly in recent years, with some counties posting very little to no economic growth recently,” said Deskins.
The full economic outlook report is available from the WVU Bureau of Business and Economic Research for free download in PDF format at be.wvu.edu/bber. For further information about the WVU College of Business and Economics, please visit be.wvu.edu or go to @wvucobe on Twitter.
CONTACT: John Deskins, WVU College of Business and Economics
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