The recent economic news for West Virginia can be broken into four categories — excellent, good, caution advised and bad.
Let’s start with “excellent.”
Local and state officials joined with representatives of Nucor Steel to break ground last Friday on a $3.1 billion plant in Mason County. Nucor is a Fortune 500 company (#102) and North America’s largest steel and steel products company. An estimated 2,000 temporary construction jobs will be created at peak, and 800 full-time positions at the plant when it’s completed in about two years.
West Virginia once had one of the largest steel plants in the country. Weirton Steel employed over 12,000 people, but it went through a steady decline starting in the 1970s. Nucor is a next-generation company because it uses recycled scrap metal and has significantly lower greenhouse gas emissions than global steel-making averages.
The “good” continues to be the state’s finances. Tax collections for the most recent month — September — exceeded estimates by $204 million. The state is $234 million ahead of estimates for the first three months of the fiscal year.
State income tax collections exceeded estimates by $112 million in September, even though income tax rates were cut by 21% earlier this year. So, West Virginia taxpayers are able to keep more of their money and tax collections are still growing — that is a sign of economic strength.
The state’s surpluses and frugal budget management contributed to rating agency S&P Global giving West Virginia its AA-/Stable rating. S&P said the rating “reflects our view of the state’s strong government framework, highlighted by a requirement to adopt balanced budgets and maintain structural balance during the fiscal year.”
However, S&P’s report also accounts for the “caution advised” news. The agency warns of possible headwinds. “Ongoing population declines, a comparatively high dependent population, low education attainment levels, and employment losses related to mining concentration will likely continue to limit the pace of economic development,” the report said.
And that leads to the “bad” news: West Virginia’s persistent challenge of workforce development. A survey by WalletHub found that West Virginia ranks second in the country (Alaska is first) of states where employers are struggling the most in hiring.
Recently, Workforce West Virginia Deputy Executive Director Jeff Green told lawmakers the state has a high number of “detached workers.” These are workers who have exhausted their unemployment benefits, but they are not back in the labor force.
“They’re not deceased, not working, not working in another state, not incarcerated … they’re not doing anything,” Green said.
The positive news — not just Nucor, but the other economic development announcements in the last few years — is encouraging. It is a refreshing and hopeful reversal from recent years after all the plant and coal mine closings and the brain drain. But there are also serious challenges, and those must be considered as well to have a balanced picture of the West Virginia economy.
