Oil prices jeopardize gains in jobs, wages

By Michael Illiao
The Sheridan Press
Via Wyoming News Exchange
 
SHERIDAN — Wyoming’s employment and average wages have continued to grow, according to a recent report by the Wyoming Department of Workforce Services, but looming uncertainty in the price of oil could jeopardize those gains.
David Bullard, a senior economist with the Department of Workforce Services, said the statewide growth was spread out across several different sectors, however the mining sector saw the most growth by far, continuing a trend that has accelerated over the past year.
The mining sector added 1,055 jobs between the second quarter of 2017 and 2018, compared to 649 jobs added in health care and social assistance, 421 jobs in accommodation and food services and 338 jobs in manufacturing during the same period. The state also saw increases in transportation and warehousing, administrative and waste services and professional and technical services, while the state lost jobs in local and state government and the retail sector.
With no considerable mining presence, Sheridan County’s employment picture has remained essentially unchanged. The county added five jobs between the second quarter of 2017 and the second quarter of 2018. Workers’ wages increased slightly during that period, though, with the average weekly wage in Sheridan County growing from $761 to $797 — just under 5 percent growth.
By comparison, Campbell County experienced the strongest growth in the state and added 672 jobs during the same period, which equates to roughly 3 percent growth. Average weekly wages went from $1,036 to $1,090 — which is just over 5 percent growth.
The latest numbers mark the state’s continued recovery from a harsh downturn in 2014 and 2015. According to Dr. Wenlin Liu, a chief economist in the Wyoming Department of Administration and Information’s Economic Analysis Division, the 3,730 jobs Wyoming added between 2017 and 2018 is the largest year-over-year growth in the state since the fourth quarter of 2014. Significantly, oil prices were also the highest they have been since 2014.
The growth, however, illustrates how closely tied Wyoming’s economy is to its energy sector, and the Wyoming State Government Revenue Forecast for fiscal years 2019-2024, prepared by the Consensus Revenue Estimating Group, was recently adjusted to reflect a drop in oil prices. Oil prices began declining in October, and the CREG report concludes that decline will continue, dropping by $15 per barrel in 2019, $10 per barrel in 2020 and $5 per barrel in 2021. That will have a significant impact on the state’s revenue going forward.
The report’s revised revenue forecasts reduced the projected gains for 2019-2020 by just over $125.1 million and the projected revenues for 2020-2021 by more than $145 million.
However, the report notes there is a “great deal of uncertainty” regarding future oil markets, and those projections could be subject to change, for better or worse.