Figure 2.15: West Virginia Employment Growth Forecast by Sector
support services saw a quarter-to-quarter
gain for the first time in nearly three years
during early 2017 and have risen nearly
16 percent in that time frame.
In addition to direct impacts on their
own industries, the coal and natural gas
industries play a sizable role in influencing
construction activity in several portions
of West Virginia. Between early 2012 and
late 2016, the state’s construction sector
saw payrolls decline by nearly 20 percent,
even with the ramping up of construction
at Procter & Gamble’s new $500 million
manufacturing facility in Berkeley County,
several major commercial developments in
the I-79/I-68 corridor and the construction
of midstream and wastewater recycling
facilities for the natural gas industry.
However, construction employment has
increased by nearly 4,500 workers since
the beginning of 2017, and many of these
gains can be linked to various stages of
progress being made on four major natural
gas pipeline projects that span substantial
portions of the state.
Growth in the Service Sector
Goods-producing industries are expected
to record the fastest rates of growth over
the next five years, but several private
service-providing sectors will account
for measurable gains during the outlook
period. The professional and business
services sector is expected to add jobs
on net at a pace of more than 1 percent
per year. Thanks to steadily growing
demand for health care from the state’s
large and growing contingent of elderly
residents, education and health services
will see employment grow at an average
annual pace of nearly 0.5 percent. The
leisure and hospitality sector is expected
to post job gains of between 0.2-0.3
percent per year through 2023. The
state’s wealth of natural amenities will
buoy West Virginia’s status as a regional
tourism destination, and efforts to in-
crease the state’s tourism options and
national visibility could boost the sector’s
importance going forward, especially in
areas of the state that have experienced
secular declines in coal production, such
as the New River Gorge area.
Employment Expectations
Overall, the forecast calls for the state’s
economy to remain on path to economic
recovery and grow at an average rate of
0.4 percent annually during the five-year
36
WEST VIRGINIA EXECUTIVE
West Virginia Employment Growth Forecast by Sector
Construction
Professional & Business Services
Manufacturing
Natural Resources & Mining
Education & Health Services
2007-2017
2018-2023
Total
Government
Leisure & Hospitality
Other Services
Trade, Transportation & Utilities
Financial Activities
In formation
-3.0%
-2.5%
-2.0%
-1.5%
Source: Bureau of Labor Statistics; WVU BBER Econometric Model
-1.0%
-0.5%
0.0%
Average annual growth, %
0.5%
1.0%
1.5%
2.0%
SOURCE: U.S. Bureau of Labor Statistics and WVU BBER Econometric Model
outlook period slated to end in 2023. This
rate of growth represents an improvement
over the significant number of job losses
recorded between 2012-2016 but will
constitute a below-average rate of growth
compared to the nation as a whole—
0.7 percent annually—over the next five
years. Also, absent any unexpected positive
contributions, the state is not expected
to reach its previous peak level of employ-
ment achieved in 2012 during the five-
year outlook period.
While West Virginia’s construction
sector is expected to register the fastest
rate of job growth during the outlook
period, increasing payrolls at an average
annual pace of 1.1 percent through 2023,
most of this growth will likely occur over
the next few years with small increases
over the latter part of the forecast horizon.
A pullback in construction sector payrolls
and output is expected through early 2019
as a result of the stoppages to the Atlantic
Coast and Mountain Valley pipeline proj-
ects. The Federal Energy Regulatory
Commission’s August 2018 approval of
the Mountain Valley Pipeline’s revised
plan allowed construction to restart, but
delays are expected to persist for the Atlantic
Coast Pipeline. The forecast assumes both
projects will likely return to full construc-
tion activity during the second half of 2019.
One source of upside potential for con-
struction sector growth in West Virginia’s
energy industry during the forecast hori-
zon—and beyond—is the $84 billion
memorandum of understanding signed
between the state and China Energy, which
covers a 20-year investment horizon. At
present, limited information is available
regarding the projects that will be funded
through the agreement, but discussions
have included a range of possibilities for
additional midstream assets as well as
the creation of new downstream assets
for natural gas, such as power plants
and crackers.
Within the energy industry, West Vir-
ginia’s mining sector is expected to post
payroll and real output growth of 0.6 and
1.1 percent per year, respectively, during
the outlook period. However, just as they
have trended in different directions over
the past decade or so, West Virginia’s coal
and natural gas industries will continue
to have diverging performances over
the course of the forecast horizon. West
Virginia’s oil and natural gas industry
is expected to add jobs at a robust rate
of 8 percent per year during the outlook
period. Natural gas production volumes
are expected to increase at a slower pace
of 6.6 percent annually. This difference
reflects, at least in part, that the stage of
the industry’s recovery in 2018 is such
that operators are still able to ramp up
production from existing plays before
making aggressive expansions in explora-
tion and development.
As for unemployment, West Virginia’s
unemployment rate is forecast to aver-
age 5.3 percent for calendar year 2018
as a whole after averaging 5.2 percent in
2017. Assuming no dramatic revisions
in the underlying labor force data, the
state’s jobless rate will likely drift lower
into the upper 4 percent range by late
2019. Sustained job growth across more