UND Economist on North Dakota Economy: “If We’re Not at Rock Bottom We’re Close”

Economic activity in North Dakota has been in decline for a couple of years now, dragging tax revenues for state and local governments down with it. As a result lawmakers had to shrink state budgets during a bruising session earlier this year (let’s hope local governments do the same instead of hiking property taxes).

Populations in western North Dakota are shrinking too.

I think the question on a lot of people’s minds is, when will it stop?

“If we’re not at rock bottom we’re close,” UND economist David Flynn told me during a radio interview yesterday. He said the outlook for the state’s economy is “inconsistent, anemic growth with slight declines,” though he added that we’re “starting to get to a recovery situation.”

One problem North Dakota has faced – really a generational sort of issue – is that of a chronic labor shortage. The state’s consistently low unemployment rate is often touted as a sign of economic resiliency, but really it’s not a good thing.

For one thing, it stays low even when the state’s economy slows because people who lose their jobs here tend to leave the state. For a lot of people, if there isn’t work in North Dakota, there isn’t anything else to keep them here.

For another thing, the lack of an available labor pool makes it hard to grow the economy. Start up businesses or industries struggle to find people to employ. As a result, “we don’t have the opportunity to capitalize,” Flynn told me.

Here’s the audio of our interview:

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