The three fastest-growing states are reaping rewards from the recently revitalized mining sector.
Mining was the driving force behind growth in Texas, West Virginia and New Mexico, which grew 3.9%, 3% and 2.8%, respectively — the fastest rates of any states — in the first quarter. Just a year earlier, Texas was growing at a 2.7% pace, while West Virginia and New Mexico were contracting at 1.9% and 0.7%, respectively, according to the Commerce Department.
The mining industry has benefited from a recovery in commodity prices after an oversupply of commodities like oil, zinc and copper sent prices plunging a couple of years ago. The industry, which grew 21.6% nationally in the first quarter, contributed to growth in 48 states.
Overall growth in real gross domestic product slowed in the first quarter, with sectors including finance, retail and agriculture leading the deceleration.
Meanwhile, mining has proven to be a bright spot in the economy. Industrial production in the second quarter was boosted by robust gains in mining production, a reflection of the continued recovery of drilling activity.
The revitalization in the sector has benefited companies as well as state economies. Caterpillar Inc., a maker of bulldozers and mining trucks, on Tuesday highlighted a rebound in the mining industry in its upbeat second-quarter earnings.
One signal of concern for states like Texas, West Virginia and New Mexico: While mining investment has made leaps and bounds so far this year, “the more recent weakness of crude oil prices suggests that mining activity could drop back in the second half of the year,” said Andrew Hunter of Capital Economics in a note earlier this month.
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- On July 29, 2017