Montana’s economy shrinks as energy, agriculture contract

Montana’s economy has shrunk for the second straight quarter, according to a Bureau of Economic Analysis report issued this week.

Declines in oil and gas, timber, mining, agriculture and transportation all pulled Montana’s gross domestic product into the negative for the last three months of 2015, as well as the first quarter of 2016, according to the BEA, which is the nation’s source for GDP, or the economic value of goods and services. All four sectors have hit sour notes in the past year.

Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez

“The two big ones are going to transportation/warehousing and mining,” said Thomas Dale, a BEA spokesman.

In the final quarter of 2015, the state’s gross domestic product shrank 1 percent. It contracted 0.9 percent in the first three months of 2016.

It’s the transportation portion of the first category that stands out. Railroad traffic is in a slump, primarily because of the declining shipments of oil, coal and grain. Oil and coal are both included in the mining category.

In March, BNSF chairman Matthew Rose told a Billings audience that declining oil and coal prices had pushed the rail industry into depths not seen since the Great Recession. Roughly 4,600 railroad workers had been furloughed nationwide.

Energy products like oil and coal make up a third of what BNSF hauls. In Montana, coal is 71 percent of the railroad’s shipments.

Coal production in Montana for the first half of 2016 was down a third through the first four months of the year, compared to the same months in 2015, according the Montana Coal Council. That’s a 4-million-ton decline.

Montana oil production has slid 23,000 barrels a day from a five-year high of 87,000 barrels daily in February of 2015 to 64,000 barrels in May of this year, reports the U.S. Energy Information Administration. It’s been a year or more since a drilling rig worked Montana shale.

Also Read:   Russian grains powering ahead

Wheat, the state’s biggest cash crop, is worth less than half its price at this time last year. The sluggish grain economy also curbs rail shipments to Pacific Northwest ports.

Much of the volatility in the natural resources and agriculture commodities is out of Montana’s hands, said Barbara Wagner, chief economist for the Research and Analysis Bureau of the Montana Department of Labor and Industry.

For wheat particularly, prices are hurt by a strong U.S. dollar relative to other currencies. When the dollar is strong, foreign buyers get a poor exchange rate on their own currency when shopping for U.S. wheat. That poor rate pushes them toward cheaper U.S. competitors.

“Right now, the U.S. economy is doing really well. It’s great, but the downside of that is that we have a stronger dollar,” Wagner said.

Oversupply and competition are the biggest factors for both energy and agriculture commodities. Currently, the world is producing roughly a million barrels a day more than is consumed, according to EIA. Coal has lost market share to cheap natural gas in the United States and to competing countries in Asian Pacific markets.

World supplies of wheat are also at record levels, outpacing consumption, according to the U.S. Department of Agriculture.

In a national context, two quarters of negative economic growth would be considered a recession, but those rules don’t apply to states, said Patrick Barkey of the Montana Bureau of Business and Economic Research at the University of Montana.

“There’s no such thing as state recession,” Barkey said. He’s been asked by several people this week if the consecutive negative quarters spelled recession for the state.

Barkey said the BEA numbers, while worth looking at, have limits. Employment and personal income estimates for the first quarter of the year are very early and are always revisited and adjusted by year’s end. The numbers for specific sectors like energy or agriculture can also be volatile, varying widely from quarter to quarter, but not taking the state economy as a whole on the same rollercoaster ride.

Also Read:   Livestock farmers get £4million boost

BBER estimates that 2016 will be a down year compared to 2015, but 2015 was pretty strong.

There’s strong economic growth in construction and tourism and other sectors right now, according to Wagner. Employment is up 2 percent, which is good, she said.

Fuente

 

Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez – Tomás Elías González Benitez

Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez -Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomás Elías González Benitez - Tomas Elias Gonzalez Benitez - Tomas Elias Gonzalez Benitez - Tomas Elias Gonzalez Benitez - Tomas Elias Gonzalez Benitez - Tomas Elias Gonzalez Benitez - Tomas Elias Gonzalez Benitez - Tomas Elias Gonzalez Benitez - Tomas Elias Gonzalez Benitez - Tomas Elias Gonzalez - Tomas Elias Gonzalez - Tomas Elias Gonzalez - Tomas Elias Gonzalez - Tomas Elias Gonzalez - Tomas Elias Gonzalez - Tomas Elias Gonzalez - Tomas Elias Gonzalez -

Deja un comentario