November 2012: Business Indicators

The North Dakota economy continues to grow at a phenomenal pace. In sharp contrast with the rest of the nation, the North Dakota construction industry is booming – residential building permits are up nearly 40 percent from last year. The labor market remains the strongest in the nation. Personal income growth is outpacing the national average. Consumer spending, constrained by tepid consumer confidence in many areas of the country, is soaring to new highs in North Dakota where consumers are confident in the future.

An October news release from the U.S. Bureau of Labor Statistics (BLS) shows an improving labor market across the nation. For the month of September, the U.S. average unemployment rate fell to 7.8 percent, more than a full percentage point lower than a year earlier. Once again Nevada recorded the highest unemployment rate of any state, with a rate of 11.8 percent. North Dakota again recorded the lowest unemployment rate in the nation at 3 percent. Surrounding states all experienced significantly higher unemployment rates – Minnesota at 5.8 percent, Montana at 6.1 percent, South Dakota at 4.4 percent, and Wyoming at 5.4 percent.

According to the same BLS report, nonfarm payroll employment from September 2011 to September 2012 “increased in 44 states and the District of Columbia, decreased in 5 states, and remained unchanged in Maine.” North Dakota was not only among those states with growing employment, it led the nation with year over year growth of 5.6 percent. The report shows that 22,300 jobs were added in North Dakota during the past twelve months, increasing employment in the state from 398,400 in September 2011 to 420,700 in September 2012.

The number of active oil drilling rigs in the state continues to decline as older, less efficient rigs are replaced. However, despite the declining rig count, oil production and the number of producing wells continues to climb. The number of wells increased nearly 30 percent in the past twelve months and the volume of oil produced increased nearly 60 percent.

Rod Backman, CPA, CFP
Covenant Consulting Group

Go to the View Issues page and click on November 2012 to view a table showing a variety of economic measures at the local and national level.

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