What is the likely effect of oil price declines on the Grand Forks regional economy? This is a question I get quite often right now, and it is difficult to answer. While I investigate I thought we could look at the employment situation in Grand Forks county over the last several years. There are a couple of interesting things to consider. First, let’s consider the percent change, year-over-year, in Grand Forks county employment.
I would classify this as an overall encouraging picture. The horizontal line at the origin clarifies what is happening in the county over the last several years, and that is a decline in employment. In fact 93% of the months since January of 2008 say a year-over-year decline. So not only are we not seeing growth, there was outright decline. Would oil be a cause of this? Maybe, but we need to investigate more before making such a claim. The outcome of this is a picture like the following,
This is not getting adequate attention in my opinion. Employment in Williams county is greater than employment in Grand Forks county. (Now you know why I went with county data rather than Grand Forks city data.) For the last couple of years this has been the case, and at least for the time being the gap is widening. In addition, when you look at the relatively flat nature of employment in Grand Forks county you understand that most of the change is coming from the Williams county (read oil) changes.
I understand this is a change in the traditional pecking order in the state, but it is one made clear by the data. Will this reverse with lower prices for oil? Maybe. Certainly for some businesses there will be adjustments, but it seems unlikely to result in huge changes in employment in Grand Forks since the current oil book seems to have had minimal impacts on overall employment in the county.
As I said at the beginning, there is more work and analysis necessary here. To me though, it seems pretty clear what happened in Grand Forks over the last few years. Now the question to answer is why?
22 January 2015 @ 3:38 pm