November 14, 2018 - West Virginia’s economic rebound is on its way, says one economic expert.

West Virginia posted its strongest growth numbers in nearly a decade in 2017, emerging from several years of economic slumber, according to John Deskins, director of the West Virginia University Bureau of Business and Economic Research.

The heart of West Virginia’s economic rebound is tied to the state’s energy sector with increased production of coal and natural gas and the massive build-out of new natural gas pipelines throughout the state, Deskins outlined in his report “West Virginia Economic Outlook 2019-2023” released in October.

Deskins will provide his economic forecast for the Eastern Panhandle region today at the “WVU Economic Outlook Conference” held at the Martinsburg Holiday Inn.

The conference also is set to include a panel discussion by members from the Berkeley County and Jefferson County development authorities, and a representative of the Eastern Panhandle Home Builders Association.

According to Deskins, West Virginia’s economic growth has also broadened to include more state regions in the past few years. The state’s overall job gains are, however, still concentrated in just a few geographic areas as the state continues to struggle with a set of weak economic fundamentals.

Deskins said West Virginia’s highest job growth is happening in the northern half of the state, and population gains will be heavily concentrated in North Central West Virginia and the Eastern Panhandle.

“While the state overall is expected to lose population in coming years, around a dozen counties are expected to add residents and several more are expected to remain generally stable,” Deskins said.

After losing more than 26,000 jobs between 2012-2016, West Virginia has added an estimated 7,000 jobs in the last two years, Deskins said.

West Virginia’s job growth since late 2016 has been heavily concentrated in eight counties, driven largely by growth in the state’s energy industries.

The state’s unemployment rate rose slightly in 2017 and currently is hovering in the low 5 percent range. The mild unemployment spike is driven by more individuals returning to the labor market to look for work, Deskins said.

However, not enough of West Virginia’s unemployed are looking for work. Only 53 percent of West Virginia’s adult population is either working or looking for work, giving the state the lowest rate of labor force participation among all 50 states.

West Virginia’s low labor force participation represents a significant hurdle for its long-run economic prosperity, Deskins said.

Per capita personal income in West Virginia increased at a healthy pace in 2017, outpacing nearly all other states. Overall, per capita personal income in West Virginia stands at 75 percent of the national average.

West Virginia’s real gross domestic product grew at a healthy pace in 2017, outpacing more than 40 other states. The state’s GNP growth was largely driven by energy-related developments. ?

West Virginia’s export activity has been volatile the past decade. However, the state’s exports have increased at a healthy rate since late-2016. Promoting that export potential is important to the state’s long term economic growth, Deskins said.

West Virginia’s growth has lagged behind the national average the last few years, with its per capita income level at roughly75 percent of the national figure.

Deskins said the energy sector is an important driver of economic activity in the state. Coal output has improved to around 93 million short tons in 2017, from around 80 million short tons in 2016.

The state’s coal production in 2018 is projected to fall slightly under its 2017 numbers. Yearly production is expected to remain above 80 million tons over the next five years.

West Virginia’s coal production has increased the past two years, driven by rising coal exports. Coal production is becoming increasingly dependent on export markets with future production growth likely to be fueled by overseas demand.

The state’s natural gas output has shown strong growth since late 2016, with future production is expected to grow at a healthy rate over the next five-years, Deskins said.

West Virginia employment will increase 0.4 percent per year on average through 2023, compared to a projected 0.7 percent for the nation as a whole, Deskins said.