CHARLESTON, W.Va. (AP) — West Virginia had the third-fastest economic growth in the nation last year with the mining industry leading the charge.
A boom in natural gas drilling, not the struggling coal industry, led the expansion.
The U.S. Department of Commerce said West Virginia’s real gross domestic product grew 5.1 percent to $68 billion in 2014, up from $64.7 billion in 2013.
West Virginia’s growth was tied with Wyoming. Only two other states had faster growth: North Dakota at 6.3 percent and Texas at 5.2 percent. The report said mining was a significant contributor to the economies in those four states and was responsible for nearly all of West Virginia’s growth.
But economic bursts don’t always translate to more jobs and higher tax receipts for the state.
While the national unemployment rate hit a seven-year low at 5.4 percent in April, West Virginia’s rate of 7.0 percent was its highest in more than a year and second nationally to Nevada’s 7.1 percent.
State collections of a severance tax imposed on the coal, natural gas and oil industries are $58 million below projections for the first 11 months of the fiscal year, which ends June 30.
West Virginia University economic forecaster Brian Lego warned that the economic growth numbers released Wednesday can change later. West Virginia’s 2013 results were revised down from an initial estimate of a 5 percent expansion to 1.3 percent, he said.
And state Commerce Secretary Keith Burdette said not to expect similar growth numbers for 2015 due to the ongoing struggles in the coal industry that he called “so very dramatic.”
The industry has seen hundreds of layoffs announced this year. Through the end of May, state coal production is down 9.5 percent from the same period in 2014. It’s even worse in the southern part of the state, where production is down nearly 15 percent.
West Virginia has seen a huge uptick in drilling over the past decade in the Marcullus and Utica shales, primarily in the state’s Northern Panhandle.
From 2003 to 2013, the latest year available, the natural gas sector’s role in the state’s total economic activity grew from 11 percent to 17 percent, according to the U.S. Energy Information Administration.
And last year alone, West Virginia’s natural gas production rose 40 percent to 1.04 trillion cubic feet, according to figures reported to the state Department of Environmental Protection.
For now, the state’s job-creation focus is on other areas.
The state Department of Commerce sends representatives to as many as 20 trade shows worldwide every year. On Wednesday, Burdette attended a plastics show in New York City. Last month, Gov. Earl Ray Tomblin led a delegation to Japan to focus on the automotive industry.
“Part of our mission is to try to continue an effort to diversify our economy, to create other opportunities in manufacturing, logistics, plastics, aerospace,” Burdette said. “All those categories are targets for us. It’s a slow, slow process.”
The economic report comes on the heels of Tuesday’s move by Tomblin to order $38.9 million in spending cuts to help close an estimated $70 million revenue gap this fiscal year.