#ShaleBenefits: Revenue Up, Unemployment Down
Ohio’s economy is improving – and our state’s oil and natural gas industry is leading the way. As the national unemployment rates continue to struggle, Ohio is experiencing significant job growth. One example, in just one year the state has gone from 48th to 4th among all states in terms of job creation.
A sign of things to come, much of this growth has come from the development of the Utica Shale, and the manufacturing industry that supports it.
We’ve already discussed the return of steel to Ohio – a return brought on to meet the demands of a burgeoning industry in oil and gas – and we continue to see the positive impacts it’s having across the state.
Last week, JobsOhio President Mark Kvamme sat down with the Lima News and highlighted this impact and what effect it is having on our economic rebound, especially in areas on the eastern side of the state where this development is taking place.
We’re seeing improvement across all our key industry groups and continued capital investment. A big chunk of it is happening on the east because of the Utica Shale. We’re also top four in the nation in job creation. Things are going in the right direction. – Mark Kvamme (State’s economy improving, JobsOhio president says, 8/14/12)
It should come as no surprise. Recently, Energy in Depth Ohio highlighted the decline of unemployment rates in areas of development, a trend that is sure to continue as this development continues to expand.
And, as Ohio’s unemployment rate improves at a greater pace than the national average, we are also seeing shale development’s role generating tax revenue – particularly in areas that have struggled in previous years.
As reported in the Youngstown Vindicator, shale development is having an immediate impact generating much needed revenue across the Mahoning Valley.
From the story:
Both Mahoning and Trumbull counties generally posted modest year-over-year gains in March, April and May, the latest months for which data is available,
But in Columbiana County, where a flurry of shale activity is occurring, sales-tax revenues increased by more than 10 percent in each of the months, as reported by the state. (Shale booms, sales zoom, especially in Columbiana County, 8/15/12)
This ‘flurry’ – and the increase in jobs, investment, and revenue it is bringing the region – is not lost on the business community, a point made by Terry McCoy, chairman of the business development committee at the Columbiana Area Chamber of Commerce.
There’s a lot of activity with shale and oil here. Because of it, these farmers are taking their signing bonuses and investing in big-ticket items like cars, tractors and barn buildings. We haven’t seen any royalties yet, but I believe it will continue this way — this is just the beginning. – Terry McCoy (Shale booms, sales zoom, especially in Columbiana County, 8/15/12)
Mr. McCoy hits on the key takeaway here – this is just the beginning. With Ohio currently in the leasing and exploration phase, a ramp up in activity is not expected to take place until 2015. So again, the best is yet to come, but let’s take a quick look at the numbers we have here today in the Mahoning Valley:
2011 revenue (May): $1,000,793
2012 revenue (May): $1,162,689
2011-2012 increase: 16%
2011 revenue (May): $2,199,693
2012 revenue (May): $2,338,016
2011-2012 increase: 6.2%
2011 revenue (May): $1,683,341
2012 revenue (May): $1,790,219
2011-2012 increase: 6.3%
*As reported by the Vindicator, Trumbull County saw an increase of 10.9% from April 2011 to April 2012.
These increases in revenue are nothing to shake a stick at. For years, Ohio has suffered through a sluggish, stagnant economy, especially in areas like the Mahoning Valley that have experienced an exodus of manufacturing and manufacturing jobs from the region.
So, as the industry continues to expand and create new jobs in manufacturing, and the supply chain, it is also bringing money directly back into the community. This revenue is used to provide services and maintain infrastructure at the state, county and local levels. It helps fund our libraries, our roads, and our public services.
Shale development is, and will continue to play a large role in Ohio’s return to prosperity. We are already seeing it here and now, and, yet again, this is just the beginning.