Monday, July 4, 2011

Economic Growth in North Dakota

Figures like 3.2% unemployment rate and 7.1% economic growth during last year are not numbers that the United States sees very often these days. But up north, they are the exact signs of progress observed in the nation's third least populous state. A variety of fortuitous events have led to development in North Dakota, offering a microcosm of contrast with the rest of the nation.

Oil industry in the western half of the state has helped to generate much of the growth in the region. Production has more than doubled within the past decade, and Ness has multi-billion dollar projects to improve the infrastructure there. This growth can be largely attributed to a 2008 US Geological Survey assessment that reported "an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil" in the Bakken Formation, surpassing previous estimates by 25-fold. To put in perspective, the current consumption of oil in the United States is approximately 21 million barrels per day. The growth of the oil industry has helped to spur growth in other sectors of the economy. The demand for a variety of support workers - ranging from truckers to cooks - has all increased. Furthermore, agricultural boom has also led to economic growth. The largest producer in the country of fourteen crops, North Dakota has found enormous growth in exports.

Unique about North Dakota's growth is availability of capital, namely labor. As the nation's third least populous state, it is struggling to find the labor force it needs to fill. Housing shortage has also limited the number of people coming into the region to work. As a result, relatively high wages are rewarded to even low-skilled jobs, while the state seeks to import labor force into the region. The combination of tapping the resources and exporting the goods has allowed North Dakota to thrive. However, it must sustain an available labor force to continue its growth. For the rest of the nation, it may soon realize that despite having harsh winters and population smaller than that of many metropolises, North Dakota may be the economic haven at this time.

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