I imagine the different sectors of economic activity in any state argue about their relative importance. Lately the contest in North Dakota has been about the relative importance of agriculture and mining. My personal opinion is that if the data support an actual argument of this point than you are fortunate enough. These debates rage though and so I tend to investigate. There are many different ways to approach these types of questions but I am not going to go through a refereeing of different methods. I will just go through what I think the data are trying to impart to us.
The latest, greatest way to track performance in the U.S. oil industry is to look at the rig count released by Baker Hughes (see this Bloomberg article for a bit of discussion and links). The rig count was down 64 as U.S. oil companies continued retrenching in the face of lower oil prices.
So employment data in North Dakota occupied most of my thoughts over the last week or so. I thought it time to take a quick look at earnings data from the Bureau of Economic Analysis. Quite often I hear people mention the concept of diversification with a local economy as if it represents a buffer against downturns. I am still thinking about; I am not sure I buy it either in part or in whole. That will need to wait for another day.
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.