More Records for N. Dakota's Booming Oil Economy
If there's any doubt that domestic drilling of oil and gas generate huge and significant positive economic benefits (more jobs, income, output, tax revenues, and stable/rising housing prices, etc.), the booming economy in North Dakota provides a convincing case study. The Peace Garden State's economy is doing so well on so many different measures, here are some highlights of its ongoing, record-setting economic success:
1. North Dakota set a new monthly oil production record of 11,540,000 barrels in June, which was above its year-ago level by 22% and above the June level two years ago by 79% (see chart above). Oil production this year has averaged more than 10.8 million barrels per month, which is double the monthly production levels in 2008, and triple the levels from five years ago.
2. Oil-related employment in North Dakota has more than doubled in just two years, from 6,900 jobs in June 2009 to a new record of 15,600 jobs in June of 2011. While the national economy struggles with another "jobless recovery," North Dakota has continued to add jobs, and not just oil-related jobs. The overall state employment level reached an all-time high in May and was 2.5% above the June 2009 level when the recession ended.
3. North Dakota continued to lead the country in June with lowest state jobless rate of 3.2%, which was lower than second-place Nebraska's rate of 4.1% by almost a full percentage point, and was a full 6 percent below the national June jobless rate of 9.2%.
4. North Dakota home prices have risen consistently through the national housing bubble and subsequent crash, and reached an all-time high in the first quarter of 2011 (see bottom chart above). While the national real estate crash has brought average U.S. home prices back to 2003 levels, home prices in North Dakota have continued to appreciate every year even through the recession and financial crisis, and are now 42.5% above 2003 levels.
5. North Dakota's Coincident Economic Activity Index (based on employment, unemployment, wages and salaries, and average hours worked in manufacturing) is above its cyclical peak in early 2008 by almost 12% (see bottom chart above). Even in Texas, which gets all of the national attention for the state's economic success and job creation, its economic activity index is still slightly below the early-2008 peak.
Bottom Line: North Dakota's impressive economic success clearly illustrates some of the benefits of domestic energy production: ongoing job growth, a jobless rate close to 3%, record-setting economic growth, and a bubble-resistant housing market. There's no reason that the economic success of North Dakota can't be duplicated elsewhere, if we would only open up more U.S. land and off-shore areas to domestic energy exploration and drilling.