CHEYENNE – Wyoming’s economy is rebounding from the COVID-19 pandemic better than previously anticipated, but much of the economic recovery has been slowed by a significant decline in the mining industry, according to Wyoming Economic Analysis Division Chief Economist Wenlin Liu.
The mining industry’s taxable sales dropped a total of 63.1% statewide, according to the fourth quarter Wyoming Economic Summary Report for 2020, which is one of the largest year-over-year drops in Wyoming’s history.
In total, Laramie County’s taxable sales only dropped 3.1%, while, comparatively, places like Sublette County, with more oil and gas production, saw a 49.9% decline. The main reason for those differences, Liu said, boils down to how much mining goes on in each county.
“Laramie County had a 3% decline in taxable sales; however, the mining sector declined almost 44%,” Liu said, also noting the 8.6% decline in the hospitality industry. “These two sectors are the main contributors to the decline.”
In Laramie County, support activities for mining brought in almost $300,000 less in December 2020 than December 2019. Those losses were cushioned by increases seen in areas like online shopping – which increased by just over $300,000 in December 2020, compared to the last year – therefore lessening the blow for municipalities.
Even with the oil declines, however, the economic summary outlined how the U.S. economy is performing better than previously expected – as vaccinations have increased, stimulus checks were sent out and restrictions have been lifted in a number of places.
The report said Moody’s Analytics projects global real GDP to rebound by more than 5% in 2021 after a record 4% contraction in 2020. Liu said airlines and the hospitality industry have been recovering their customers, slowly but surely, as people become more comfortable traveling.
But as other states get back on their feet with industries like hospitality recovering each month, Wyoming’s recovery will depend more heavily on oil and gas.
“Other industries will recover and are recovering, but we have such a big proportion of that mineral industry here. So, because that industry’s recovery is so slow, our overall economic improvement will be slower than many other states,” Liu said.
On the other hand, as the oil and gas industries dragged behind, the housing market in Wyoming became red hot. Single-family home prices increased 8.4%, compared to the fourth quarter a year earlier, and, nationally, prices have jumped more than 10%.
Additionally, in Wyoming, single-family building permits for new privately owned residential construction in the fourth quarter of 2020 were 21.5% higher than the previous year’s level. The work-from-home movement had some impact on those figures, Liu said.
“Some people moved to a suburb from a crowded downtown metro. Some even moved to rural states from San Francisco or New York, away from the super expensive housing market to work at home. We will see how many people can do that permanently after COVID-19,” Liu said.
The market is expected to cool off in 2021, as residents see higher mortgage prices and less housing availability, according to the report.
Other notable changes
Wyoming’s total personal income increased only 0.4% annually in the fourth quarter of 2020, which Liu said was affected by the significant declines in earnings in the mining industry. He said those losses were mitigated by federal relief funding. Comparatively, U.S. personal income increased 4 percent during the same period.
Both Yellowstone and Grand Teton national parks had the highest recorded number of visitors for the fourth quarter in history, which was mostly attributed to visitors’ preference for outdoor sightseeing during the COVID-19 pandemic.
The amount of mineral severance taxes generated in the fourth quarter was substantially higher than the previous quarter, but still about 21% lower than the amount a year ago.