Lost in all the news in West Virginia about budget shortfalls, spending cuts and tax increases, are several reports that collectively represent economic bright spots for the state.
The WVU Bureau of Business and Economic Research’s most recent Mountain State Business Index revealed slight growth in the state last month. The index has shown slow but steady economic improvement in the state since the middle of last year.
“We are confident that the recession has ended and that growth is underway in West Virginia overall based on the last six months of readings,” said Bureau director John Deskins.
Deskins points out that two areas of the state—North-Central and Eastern Panhandle–“will likely continue to buoy the state’s overall performance.”
The report also remains bullish about the long-term prospects for the natural gas industry. The outlook is “overwhelmingly positive with several major pipeline projects under construction or in various phases of planning.” The new pipelines and LNG export capabilities will increase the demand for West Virginia natural gas.
Even the beleaguered coal industry is showing signs of life. Prices for metallurgical coal used in making steel surged last year to $300 a ton. The price leveled off to $200, but that’s still twice as high as the price one year ago.
The Wall Street Journal reports coal companies that have been shut out of the capital markets are once again able to borrow money. Industry analysts say the rise in met coal prices and the expectation that President Trump will roll back regulations that stymied the industry are making coal a more attractive investment.
“The U.S.-based coal companies’ ability to tap the debt markets is a major turnaround from last year when investors shunned coal issuers,” the Journal reported.
Meanwhile, the state Chamber of Commerce reports that the steady job loss appears to have bottomed out. Chamber president Steve Roberts reports that figures from the U.S. Labor Department show the state had a net gain of 7,000 new jobs last year.
“It’s really beginning to look like real jobs recovery,” Roberts told me recently. “People are beginning to feel confident in West Virginia again.”
The collapse of the coal industry triggered an economic downturn that put the state’s finances in a precarious position. West Virginia has severe budget problems that require immediate cuts, tax increases or a combination of both.
Rigorous and sustained economic growth would solve a lot of our problems. We’re not there yet, but the latest economic news is at least encouraging.