CHEYENNE – Wyoming’s capital city is experiencing an economic downturn, according to a new quarterly report by the state’s Department of Administration and Information.
“There’s some pretty good evidence that the economy is starting to slow down statewide,” said Jim Robinson, an economist and author of the report. “From Cheyenne’s view, I think the slowdown is probably even more significant.”
Cheyenne added more than 400 jobs in the past year, with 7.7% of those in manufacturing. The steepest decline, however, was the 5.5% reduction in local mining and construction jobs.
“Those two sectors, on average, are fairly well-paying in terms of wages and salaries compared to the average for the state,” Robinson said. He suspects the recent completion of the years-long renovation of the state Capitol is one reason for the construction work dip.
But the decline in mining jobs is related to the nationwide problem of a declining mining industry. Wyoming’s natural gas and coal production decreased by 10.6% and 9.4%, respectively.
“When you lose jobs there, that tends to pull down the index value for Cheyenne,” Robinson said.
Cheyenne’s business-cycle index is based on an analysis of unemployment rates, private sector jobs and wages, tax collection and median home prices. It has declined since last year.
Losing those jobs is also one of the reasons why weekly earnings for Cheyenne’s private sector employees dropped 10.3%, from $833 this time last year to $747. In Casper, the other city the report profiled, earnings saw a $1 increase.
Across the state, wages decreased 0.9% in the past year, according to the report.
“The bright spot for the state is the oil production,”said Robinson, who noted in the report that oil production in Wyoming increased by nearly 16% from November 2018 to November 2019.
Statewide employment, however, has fallen by 800 jobs since last year. Of those jobs, 700 were oil and gas-related, according to the report.
“They’re able to produce more without having to hire more workers,” Robinson said, crediting lower gas prices to that change. “With the new price environment, companies have had to find ways to become more efficient. They’re using automation to some extent.”
From 2019 to 2020, Wyoming’s severance tax collection, which comes from mineral resources, decreased by $48.4 million. Numbers like that “should get your attention,” Robinson said. Revenue streams from those industries have historically buoyed Wyoming’s economy – and partially funded the public schools – but recent instability has troubled policymakers and experts like Robinson.
“It’s just another message to the state that even though oil is doing well, natural gas and coal – the other two big components in Wyoming’s energy basket – are way down.”