Wyoming’s economy posted modest gains in the first three months of 2014, buoyed by an oil sector that continued to show signs of strength despite a late winter slowdown in drilling.
The quarterly release of the state MACRO Report by the Department of Administration and Information showed state revenues are up over the previous year. The labor market remained strong, and housing prices continued to improve.
But perhaps most notable was the state’s oil sector. Tax collections on the industry grew. Drilling applications rose. And the number of rigs drilling for oil, though steady in recent months, was up over the same time last year.
Oil and gas did lose 300 jobs between January and February, falling from 17,300 to 17,000, but that figure was relatively small and likely due to a seasonal slowdown in drilling, said Jim Robinson, the report’s author. The state rig count average for March was 52, compared with a high of 57 seen in December.
“The one takeaway, I think, is the economy is doing just fine,” said Robinson, the principal economist at DIA’s Division of Economic Analysis. “All the aggregators I’m looking at say we’re stable or showing some signs of growth.”
The report underlined the recent transition in Wyoming's energy economy, with the development of oil plays in the Powder River Basin heating up as natural gas production, primarily in western Wyoming, falls.
The state received 524 applications to drill oil wells through the first three months of the year, compared with 468 applications over the same period last year and 359 the year before that.
Natural gas permit applications, by contrast, were at their lowest levels in three years. Wyoming received 171 applications through March, down from 405 applications two years ago and 242 last year.
“I think there is a refocusing of components amid the energy sector,” said Charles Mason, a professor of petroleum economics at the University of Wyoming. “Coal is a little soft. Gas is a little soft. Oil is pretty strong. What that probably means that there will be some real differences regionally.”
Statewide, sale and use tax revenues were up by $12.6 million, or 11.6 percent, over fiscal year 2013 levels. The increase, the largest of any sector, is largely attributable to the growth of oil development, Robinson said.
The effects were especially evident in areas where development has been highest. Campbell County, where much of the current drilling is occurring, reported a 9.3 percent increase in sales and use tax collections through the first nine months of fiscal year 2014. Laramie County had a 17 percent increase of $9.1 million, though Robinson said much of that was probably related to new construction there. Converse and Natrona counties posted respective increases of 8.1 percent, $2.9 million, and 3 percent, $2.3 million.
Meanwhile, collections fell in Sweetwater County, dropping $2.2 million or 3.8 percent, while Sublette County managed a gain of 3.7 percent or increase of $1.2 million.
Housing prices in Casper were particularly strong, growing 5.8 percent in the third quarter of 2013 compared with the previous time last year. Prices in Cheyenne increased 4.1 percent, and Wyoming as a whole recorded an increase of 2.6 percent, the report said.
“It is clear that Casper is a much better place to sell a house than any other place in the state. My gut feeling is that is a jumping-off point for Douglas and the Niobrara [shale play],” Mason said.
Overall state revenues were outpacing previous years’ levels. Sales and use taxes in the first nine months of fiscal year 2014 were up by $38.5 million, 7.4 percent higher than fiscal year 2013. Severance tax revenues were up by $76.4 million, nearly 15 percent higher than the sum collected through the first eight months of the fiscal year 2013.
Employment, too, compared favorably to last year, with the state adding some 3,300 jobs between February 2013 and February 2014. The biggest increases in that time were leisure and hospitality, which increased by 1,700 jobs, retail trade (900) and professional business services (600).