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Diverse Economy Keeping State Healthy, Anderson says: State Commerce Commissioner says ND Remains in Good Shape Despite Budget Shortfall
Post Date: May 04 2016

By The Jamestown Sun
North Dakota’s economy is more diverse than what some think and that is why it is still strong despite a $2 billion hit to the state economy, according to Alan Anderson, commissioner of the North Dakota Department of Commerce.

That kind of drop would really hurt the $18 billion North Dakota economy in 2000, and it still hurt in 2015, but the difference now is the state has a $55 billion economy, Anderson said in his keynote address Wednesday at the annual meeting of the Jamestown/Stutsman Development Corp.

“It is going to be pain for the state budget but overall North Dakota is extremely healthy from an economic standpoint,” Anderson said, adding that legislators and agencies will continue to face pressure to cut costs.

A diversified economy means the state must continue providing research dollars to universities and industry partners while also ensuring dollars for other growth and entrepreneurism, he said.

The Spiritwood Energy Park Association’s industrial park at Spiritwood is an example of best practices, Anderson said. It provides water, electricity, natural gas, rail and truck transportation and the essentials for industry at one spot. The new Jamestown Regional Medical Center facility, the Menards and economic parks are other signs of good innovation, he said.

“My hat is off to all of you,” Anderson said. “You’re doing a great job on that.”

Another key to the strong economy is the North Dakota workforce, which has gone from a labor exporter in 2000 to leading the nation in low unemployment and worker immigration for six years, he said. Despite three years of low ag prices and a 40 percent drop in oil, there are 15,000 job openings in North Dakota, he said.

“It’s not due to one particular industry like some would have you believe,” he said. “It’s been that all of our industries have done well over that time frame.”

To get people to come to North Dakota employment and opportunities are needed, he said. North Dakota has grown in population by over 100,000 people in the last 15 years and the average age is 35, the fourth-youngest population in the country. That happened by creating a business-friendly environment, supporting research and connecting universities with industry, entrepreneurship and finding export markets outside of the state and country, he said.

Anderson listed some of the major companies in North Dakota that are growing and currently list around 15,240 job openings. That is nearly twice the number of the 2.9 percent unemployment rate in North Dakota, he said.

For example, Appareo Systems started with two people and now has an average growth rate of 45 percent with close to 200 employees, he said. The North Dakota company Botink just received a $3 million investment to provide software support to the drone industry.

Northrop just made a $10 million investment in Grand Forks, he said. General Atomics has 25 high-income job openings

Agriculture has had three years of low commodity prices but North Dakota overall is still on a good trajectory, he said. The downside is labor as technology allows for higher productivity with fewer people involved in the process, but the upswing is value-added ag with corporations like Cavendish Farms helping to minimize the impact of low commodity prices, he said.

Anderson said the cost to break even in oil is around $45 a barrel when it used to be $70. This is due to efficiency and technology, he said. Bakken shale is doing better than other shale fields around the country, he said. Drilling will remain idle with $40 per barrel prices, he said, and at $50 per barrel it will stimulate more wells coming online and at $60 there will be new drilling.

“The outlook is good there and as that price continues to go up they will pick up quicker than they would have in the past,” he said.

Connie Ova, CEO of JSDC, Jamestown Mayor Katie Andersen and Mark Klose, chairman of the Stutsman County Commission, presented H&H Holdings of Jamestown with the Growing Jamestown Award. Jim Grueneich, general manager, and Dean Hafner, owner, were present to accept.

H&H received a $43,000 Flex PACE Interest buy down to help purchase a building, according to the JSDC annual report. H&H continues to operate at its current rate and has created seven full- time jobs.

Diverse Economy Keeping State Healthy, Anderson says: State Commerce Commissioner says ND Remains in God Shape Despite Budget Shortfall - The Jamestown Sun 
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