Friday, June 15, 2012

The Economic Miracle State of North Dakota

More good news from North Dakota, the most economically successful state in the country, thanks in large part to its booming energy sector:

1. The BLS reported today on Regional and State Employment and Unemployment for May, and North Dakota once again leads the country with: a) the lowest state jobless rate of 3.0% (more than 5 percentage points below the 8.2% national average and more than a point below second-placed South Dakota's 4.3% jobless rate), and b) the highest employment growth over the last year of almost 7%.  As I reported recently, for the month of April there were ten North Dakota counties in the oil patch with jobless rates below 2%.    

2. Jamestown Sun -- "The story of North Dakota’s envious economy just keeps getting bigger, with all of the state’s largest cities contributing to eye-popping growth. The state’s taxable sales and purchases increased 39 percent from 2010 to 2011 to more than $19 billion. North Dakota had double-digit increases in recent years, but nothing that rivals 40 percent. The 2011 annual report includes taxable sales and purchases statistics for the largest 200 cities in the state.

Williston surpassed Fargo in taxable sales and purchases by $100 million in 2011.  Tax Commissioner Cory Fong called the victory of the oil city over the state’s largest city “the big news of this report.” Fargo’s total was $2.4 billion compared to Williston’s $2.5 billion. Williston had 88.5 percent growth from 2010 to 2011, compared to Fargo’s 10 percent."

7 Comments:

At 6/15/2012 3:19 PM, OpenID chuquito said...

This is a small fraction of what will happen to California once it converts to a cannabis-based economy.

 
At 6/15/2012 7:48 PM, Blogger Breaker Morant said...

It would be interesting to take a closer look at South Dakota as pertains to the "Dakota Model." SD doesn't have the oil that the ND haters deride for the ND Model. SD still has the 2nd lowest unemployment rate.

 
At 6/15/2012 8:37 PM, Blogger Breaker Morant said...

One thing I have always wondered is how do unemployment statistics and so forth account for the following. I have several friends and acquaintances who live in Minnesota, but work North Dakota Oil(or related projects such as construction).
Are they Minnesota or North Dakota workers? There have to be tens of thousands of workers in the ND Oil Patch who fit that description.

 
At 6/15/2012 8:46 PM, Blogger Breaker Morant said...

Just to expand on my earlier point/question-One of my friends is on a Halliburton crew and he says most of his crewmates are from Colorado. They are basically in ND for a 2-week shift or whatever and then go home for a week (or whatever the cycle is)

I have said this before but the low North Dakota unemployment rate is only part of the picture-The other part (and I believe the more important part) is that North Dakota oil is lowering other states unemployment rates as well.

 
At 6/16/2012 7:38 PM, Blogger VangelV said...

This is all nice as long as companies add debt to their balance sheet to finance activities that produce negative cash flows.

 
At 6/18/2012 3:52 PM, Blogger Breaker Morant said...

Well at least they are earning in the neighborhhood of 6 figures and learning skills that can translate into worldwide employment opportunities instead of sitting home twiddling their thumbs andreading your newsletter.

 
At 6/18/2012 7:38 PM, Blogger VangelV said...

Well at least they are earning in the neighborhhood of 6 figures and learning skills that can translate into worldwide employment opportunities instead of sitting home twiddling their thumbs andreading your newsletter.

It is clearly a good thing for workers who take advantage of the pay and those moving out that sell overvalued properties at prices they could not have imagined years before. But it is bad news for investors who have risked capital to produce a product that costs more than its market price.

 

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