Maybe they should call North Dakota “the big easy.” In weathering the recession, North Dakota, observes David Flynn, director of the Bureau of Business and Economic Research at the University of North Dakota, “is rightfully the envy, I think, of most of the other states in the union.”
Consider: North Dakota has the lowest unemployment rate in the country (3.6 percent). It is, according to Newsweek, one of the only two states in the country whose economy is actually expanding beyond pre-recession levels. In his State of the State Address last January, Governor Jack Dalrymple cited the U.S. Chamber of Commerce’s ranking of North Dakota as the nation’s leader in economic growth over the last decade. Merchandise exports, he said, have nearly doubled to $2 billion in the last five years, while the state has added nearly 40,000 new jobs over the past 10. In 2010, he further proclaimed, North Dakota was ranked No. 1 in competitiveness by Massachusetts think tank the Beacon Hill Institute. In 2003 the state was ranked 28th in the nation.
North Dakota’s economic success has been a perfect storm (“in a good way,” Flynn said) of factors. Among them are the revenues from recently discovered oil in the western part of the state. “The estimate of recoverable barrels keeps growing,” Flynn said. “Technology has improved to get the oil out far cheaper than they could in the past. In an excellent energy market, we also have coal, as well as significant investment in wind energy and bio-diesel.”
Agriculture, too, is blossoming. “We’ve had good crop years and excellent commodity prices across the board,” Flynn said. “The farmers have been enjoying very good returns on their investments, very good earnings. That has spilled over into other areas, such as spending on equipment. Equipment dealers reported being out of supplies a year in advance.”
Add to these factors a reduced tax burden on consumers (in the form of lowered property taxes). The weakened dollar has also seen an influx of Canadian shoppers who can get more for their money in North Dakota. “They’re interested in buying (here) because their taxes are obviously much higher than ours,” Flynn said. “The shopping centers on weekends are regularly filled with Manitoba license plates. And they buy everything from school supplies to big box items.”
North Dakota is not without its economic challenges. The oil boom has drawn an influx of workers, but the mining and drilling equipment has put a burden on the infrastructure. “Roads are cracking under the weight,” Flynn observed.
But nothing succeeds like success, and in a state with the third smallest population, North Dakota is booming. According to 2010 Census Bureau figures, the state’s total population grew 4.7 percent. Its biggest cities, such as Fargo, have seen the biggest increases. “The increase in population is a great thing,” Flynn said. “One of the things North Dakota represents is an opportunity for younger people. We have a state that is graying rapidly, so job opportunities should be coming up as people retire. A lot of younger people who once said there weren’t adequate opportunities and left the area are now coming back. Communities are giving development loans for people to come and open restaurants and other kinds of businesses. This is another strategic asset for the future that communities are hopefully trying to exploit. (Other big cities such as) Chicago and Atlanta will never be short of young people. But comparatively speaking, you might have a better chance to get ahead here.”
North Dakota, Gov. Dalrymple summed up in his State of the State address, is in “a position of strength. We are setting our own course and reaping the rewards of our hard work, our careful fiscal management, our pro-business climate, and our diversified economy.
He makes it sound easy.