Statewide economic outlook ‘strong to steady’, excluding mining | news

“For most sectors, there is a strong to flat outlook for 2025,” said economist Anne Alexander, who led the second annual statewide economic outlook study conducted by the University of Wyoming’s Center for Business and Economic Analysis.

“The elephant in the room with Wyoming is always the coal sector, which has been in decline. That’s partly regulatory, but it’s also market-driven. That looms large,” Alexander said.

In 2025, the natural resources and mining industry is expected to make up 7.6% of Wyoming’s employment sectors, while in 2014, the industry made up 12.06%. For decades, Wyoming’s economy relied on boom-and-bust cycles, from coal-powered steam engines to natural resources that “ebbed and flowed,” projections show. In 1953, the first coal-fired power plant, called Genesis Alcali, was commissioned, and after decades of ups and downs, TerraPower announced that the Noton nuclear power plant would be built in Kemmerer in 2021.

“There is some optimism in some pockets around trona and rare earths, so while the sector is declining, there are some opportunities there,” Alexander said.

The ongoing downturn, which began more than a decade ago, is having a dual impact on Wyoming residents, said Josh Dorrell, CEO of the Wyoming Business Council. Since much of the state’s workforce works in natural resources, a downturn could impact unemployment rates, radically changing communities and job opportunities within them.

According to Alexander, the 40% decline in energy jobs represents a loss of about 10,000 jobs.

Additionally, Dorrell said Wyoming’s financial system is “heavily dependent” on natural resource extraction, not only for government operations, but also for school operations and the state’s educational system.

“A lot of the basic services in our communities are funded by those (industries), and it’s really hard in our communities when they collapse,” Dorrell said. “This is the challenge we face.”

Challenges in the financial sector are largely related to the national economy, which the report says “has shown incredible resilience in 2024.” Prices are still higher than they were before the recent inflationary crisis, but inflation rates have fallen to near healthy levels. However, the report notes that “complex and challenging emerging indicators” limit experts’ enthusiasm for US economic growth in 2025.

The agricultural sector is largely expected to face challenges from the devastating rangeland fires that sweep through northern Wyoming in 2024. Gov. Mark Gordon has emphasized several times this fall the importance of responding to a “historically devastating wildfire season” in his groundbreaking budget supplemental recommendation. Until the 2025 plenary session. In it, Gordon recommends $140 million for firefighting and restoration efforts.

“Putting out the fires was long, hot, hard work. The hardest work starts once the fires are out,” Gordon said in November. “Proper and adequate restoration must begin immediately, and in some areas, it will take years. The unusually large amount of private acres burned means a high degree of direct damage to our families and communities.

Experts expect the housing shortage across Wyoming to continue into 2025. To address this particular challenge, the Business Council is working with the Growth Lab at Harvard Kennedy School, which specializes in economic growth research and development policy, and looks specifically at housing issues in Wyoming.

“Housing is a very big impediment to growth in Wyoming… and it impacts our ability to have a workforce. Businesses here are having a hard time expanding, and it’s hard to recruit new businesses, largely because of the housing shortage,” Dorrell said. .

Housing supply and demand are not elastic in Wyoming, Dorrell said, because housing is overly regulated at the local level. It could be helpful to work with agencies like the Wyoming Community Development Authority and others to find unique solutions for the state’s diverse communities.

“This is another area, outside of economics and economic development, where we need to rally around solutions,” Dorrell said. “It’s going to take more than one solution to solve some of these issues, so working together (is key).”

The average hourly wage needed to rent a two-bedroom apartment in Wyoming is $20.90, Alexander said, adding that a family making a median income would likely struggle to afford a mortgage in Wyoming.

“Even just renting can be a challenge,” Alexander said. “So, you have these really great projects, but where are you going to put the people who are going to work on them? If we want to grow, if we want to diversify, we’re going to have to have a place for the workforce to live.”

Wyoming also continues to see a significant exodus of college-educated young people, with about 37% of UW alumni who graduated between 2007 and 2024 still living in Wyoming.

“We have the second largest (outmigration) in the United States,” Alexander said. “West Virginia is up, we’re next.”

The Wyoming Business Council held a panel discussion this fall with UW students titled “Shaping Wyoming’s Future: UW Student Panel” to discuss the challenge of retaining local talent in the state after graduation. Dorrell said his organization will continue to ask young Wyoming residents what brings them closer to home.

“It’s easy for those of us who have carved out a place in Wyoming to say, ‘Okay, we’ve done that,’ but our mission is to try to improve and understand our communities, our amenities, and the quality and complexity of our jobs,” Dorrell said.

Along with the challenges, the report includes what it calls “significant positive opportunities for Wyoming in 2025,” especially in technology, research and development, and business formation. Wyoming ranks second nationally in science and engineering degrees as a percentage of higher education degrees awarded, at 45.8%, compared to the U.S. average of 35.7%.

Investment capital expended per $1 million of gross government output in 2022 was $16,149.76, versus the U.S. average of $9,898.93; Venture capital dollars disbursed per venture capital deal was $11.49 million, ranking Wyoming fifth nationally, versus the U.S. average of $10.14 million per deal.

Based on statewide averages, Wyoming’s residential property tax rates remain among the lowest in the nation. Based on property taxes paid as a percentage of the value of owner-occupied housing, Wyoming ranked No. 37 in 2022, the most recent year for which data is available.

Overall, the report notes that growth will be “moderate” across the country in 2025. Wyoming holds “many opportunities and challenges.”

But even having a country-specific economic forecast is a step forward.

“Wyoming was the last state that did not have a local economic forecast, so we are excited to fill that void,” Alexander said.