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Decline in mining sector steepest in state's history

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Coal trains

Rail cars are filled with coal and sprayed with a topper agent to suppress dust in January 2014 at Cloud Peak Energy’s Antelope Mine north of Douglas.

CHEYENNE — Wyoming lost nearly 8,700 jobs from the first quarter of 2015 to the first quarter of 2016, according to a new report from the state’s Economic Analysis Division.

Of those, about 5,500 were in the mining and logging industries, and another 1,370 were in the construction industry.

The job losses pushed Wyoming’s unemployment rate to 5 percent, while the rate for the entire United States dropped to 4.9 percent.

Wenlin Liu, the chief economist for the state Economic Analysis Division, said the last time the state unemployment rate was higher than the country’s was during the Great Recession.

“The largest factor is the mineral extraction industry,” he said.

“Due to the reduction in energy activities caused by the dramatic downturn of both oil and natural gas prices, sales of equipment, supplies and services, the mining sector experienced a year-over-year contraction of 55.1 percent for the first quarter of 2016,” the report said.

The report went on to say the decline is “the steepest drop ever in Wyoming’s history.”

The contraction in mineral extraction translates into dramatic drops in sales tax collections.

Total taxable sales declined statewide by 24.5 percent from the first quarter of 2015 to the same period in 2016.

About a fifth of sales tax collections are from the minerals extraction industry, and counties most dependent on that industry had the worst declines.

Converse County had the sharpest decline with a 57.7 percent drop in taxable sales.

Sublette, Campbell and Crook counties also had taxable sales declines of more than 40 percent.

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Natrona, Johnson and Platte counties had declines of more than 20 percent.

Laramie County’s taxable sales dropped 12.9 percent.

On the positive side, Teton, Lincoln, Weston and Albany counties experienced growths in taxable sales.

In addition to sales tax, severance taxes have also shrunk considerably.

The report said the $110 million in mineral severance taxes generated in the first quarter of 2016 was the lowest amount since the fourth quarter of 2002.

While employment was down across the state, a few sectors increased the number of jobs — retail, education and health services, and government.

The latter includes public education and public hospitals.

Liu said growth in health care is in part because more health workers are needed for Wyoming’s aging population.

The report also looked at other economic indicators.

Personal income in Wyoming dropped 1.2 percent, while personal income nationwide increased 4.4 percent.

Permits for single-family home construction were down 17 percent in the first quarter of 2016 compared to the same period in 2015, but permits for multi-family housing doubled.

Liu said rising oil and gas prices, although slow, point toward an improvement in the economy sometime in the future.

“The worst is either behind us or approaching,” he said.

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