Monday, April 27, 2015

Duchesne County Economic Update

Tyson Smith, Regional Economist

The Uintah Basin continued to add employment throughout the fourth quarter of 2014. Average annual employment in the region grew nearly 4 percent from 2013. Despite the sustained growth trend throughout last year, it appears that the economic conditions in the Uintah Basin are taking a turn for the worse.

The Utah Department of Workforce Services relies on several data sources to help describe the state of the economy. The most accurate data available is the nonfarm payroll employment information that is collected through the Quarterly Census of Employment and Wages. However, the resources required to gather data accurately come at the expense of timeliness, which results in a four to six month lag between the time these data are collected and when they are available to the public.

When economic trends change dramatically it is important to understand the recent history of the region, while also using up-to-date information to inform the current economic climate. The most recent data that highlight the shrinking labor market in the Uintah Basin are the unemployment rate and the initial weekly unemployment claims, both of which have jumped significantly to start 2015.
  • Duchesne County’s payroll job growth in fourth quarter 2014 accelerated by 3.4 percent from 2013, the tenth fastest year-over job growth in the state and half a percentage point faster than the Utah average. In total, the county added a quarterly average of 318 jobs from the same period last year. Mining firms — including oil and gas activities — increased by 225 employees, though this industry has shed a significant number of jobs to start 2015. 
  • The county’s seasonally adjusted unemployment rate jumped six-tenth of a percentage point to 5.9 percent in March, 2.6 percent above the state average. In December, the Duchesne County unemployment rate was 4.2 percent. The dramatic increase of 1.7 percentage points is the largest three months increase since January of 2009.
  • Initial unemployment insurance claims also increased significantly in first quarter 2015. The weekly average of initial claims in first quarter of this year was approximately 46 claims per week, compared to 12 claims per week during the same period in 2014. The 287.7 percent spike coincides with a dramatic reduction in crude oil prices at the end of 2014 and the beginning of 2015. The oil and gas extraction industry appears to be contracting employment as a result of low prices reducing profitability. 
  • Wages also continued to grow in the fourth quarter 2014. Year-over average monthly wages increased 3.9 percent, down from 9.6 percent in third quarter and slightly slower than the state average. The gains in wages during fourth quarter pushed the average wages in the county to $4,204, nearly $500 per month above the Utah average. Wages may skew even higher in 2015 as less tenured and less senior employees in high paying industries get laid off.   
  • Taxable sales in Duchesne increased by 3.8 percent from the fourth quarters of 2013 to 2014, settling at $229.3 million. Taxable sales in mining, quarrying, and oil and gas increased by just over $4.6 million (43 percent) from fourth quarter 2013, the largest percent increase in any industry with at least $1 million in taxable sales.