Economists Note Youngstown’s Improved Economy Due to Shale
Economists throughout Ohio are discussing how the Youngstown area is benefitting from a stronger economy than the rest of the state, greatly due to Utica Shale development. Kenneth Mayland, President of ClearView Economics LLC in Pepper Pike, George Mokrzan, Senior Vice President and Director of Economics at Huntington Banc Shares Inc. in Columbus, and A.J. Sumell, professor of economics at Youngstown State University shared their thoughts on the Mahoning Valley’s growing economy with the Youngstown Business Journal.
Economic growth in northeastern Ohio and the Midwest is exceeding national rates, and unemployment is significantly lower than the national average thanks to oil and gas development. As EID has covered, Mokrzan and Mayland don’t think the U.S. reaching energy independence is a far-fetched notion, but only a matter of time. With the ability to unlock a vast supply of natural gas, U.S. industry can convert to the cheaper, cleaner fuel source. Mokrzan expressed that the nation needs to build infrastructure to process liquid natural gas and eventually export. Mayland explained that greater use of natural gas would translate into less reliance on other nations.
Greater use of natural gas would translate into less reliance on the nations from whom the United States imports petroleum and either don’t share our values “or don’t like us very much,” Mayland says. Wider use of natural gas would reduce the price of gasoline and encourage the drilling of more natural gas wells. He notes that with the price of natural gas at $2 or less, many energy companies have either abandoned well sites or suspended production. – Youngstown Business Journal (Midwest, Ohio Economy Stronger than Nation’s, 2/5/13)
Sarah Boyarko, Vice President for Economic Development, Retention, and Expansion at the Youngstown/Warren Regional Chamber also weighed in on her area’s economy. She stated that in Trumbull and Mahoning counties, companies invested $376 million in 2012, resulting in 1,339 jobs created, $15 million in payrolls, 4,741 jobs retained, $177 million in payrolls retained, and 738,188 square feet of building space constructed or remodeled. There were 64 serious inquiries about locating in the Mahoning Valley from out-of-area firms, 37 of those actually made visits. Of the inquiries, Boyarko said 45% were oil and gas related.
While 2012 showed incredible growth, 2011 was also a great year for the area: $207 million was invested, resulting in 833 jobs created, $35 million in payroll, 1,048 jobs retained, $42 million payroll retained, and 2.9 million square feet of new built or remodeled space.
Energy In Depth has done some research on the area’s economy as well. While we expect a ramp up of activity in 2015, counties in eastern Ohio have already seen incredible increases in revenue. From May 2011 to May 2012, Columbiana County saw a 16% increase. In the same period of time, Mahoning County saw an increase of 6.2%. Between April 2011 and 2012, Trumbull County saw a revenue increase of 10.9%. We’ve also noted great drops in area unemployment rates. The Youngstown/Warren Metro area’s unemployment rate dropped to its lowest point since October of 2008 in May of 2012 at 7.4%.
Our analysis of increases in sales tax revenue, featured in Columbus Business First, highlighted the additional benefits of continued development in a new light. Over the past year, counties with shale development have seen their sales tax increase by as much has 25%, another indicator of the incredible, positive impact the Utica Shale is bringing to the region. We took a look at the top permitted counties in the state and their sales tax revenues over the past year. Columbiana County is the third most permitted county in the state and saw an 11% sales tax revenue increase. Carroll and Harrison, the top two permitted counties in the state, saw 25% and 21% increases, respectively.
Shale development has brought an area once wrought with economic stagnation a great revitalization. With the resurgence of steel in what was known as the “rust belt”, it’s clear there is more good news to come for the Mahoning Valley and the rest of Ohio.