BISMARCK – A new economic outlook report predicts a slowdown in recovery for North Dakota as the state climbs out of a pandemic pit.
The report, produced by economics professor Jeremy Jackson at North Dakota State University, predicts a decline in gross national product, labor force participation and total wages over the next few months. However, Jackson’s model, based on historical data, also predicts “promising” increases in government tax revenues.
North Dakota’s gross national product grew 1.9% in the first financial quarter of 2021 after rising 1.3% in the final quarter of 2020, but Jackson’s forecast shows the state’s economic performance will be below the low point of COVID over the next six years -19 pandemic drops months.
Jeremy Jackson is a professor in the Department of Agribusiness and Applied Economics at North Dakota State University. (NDSU photo)
A decline in labor force participation would exacerbate the already severe labor shortage that is causing companies to scramble to recruit new employees. Job Service North Dakota reported 18,078 jobs on its Web site on Wednesday, August 4th, containing thousands of jobs in healthcare, transportation, sales, and food prep.
Jackson told Forum News Service last week that the market has a mechanism to naturally resolve the problem in the long run, either by increasing wages or reducing labor demand, but labor shortages have long plagued North Dakota employers before the pandemic.
The report notes that North Dakota’s economy is heavily oil-tied, so total wages and tax revenues for the state for the next year will depend on the volatile price of the commodity.
The outlook for Fargo and Grand Forks is more positive than for the state as a whole.
The labor pool in Fargo and Grand Forks is expected to grow in the last two quarters of the year, although property prices will rise significantly. Bismarck’s outlook is more neutral, with the labor pool and property prices expected to remain in balance.