Surging commodity prices and a weaker dollar have enhanced North Dakota's economic strength, leading to stronger growth and continued investment throughout the state.
"The chances of a state recession are incredibly low," said David Flynn, an economist at the University of North Dakota. "The most likely scenario would be for North Dakota to continue to grow."
State Fiscal Management Director Sheila Peterson said state revenues are 13 percent ahead of forecasts, which she partially attributes to "solid growth" in the tourism, energy and agriculture sectors. The state's bountiful crops play a big part of its exports; agricultural products pulled about $170 million into North Dakota in 2006. Last year, the state's fertile farmlands produced the most wheat and barley in the nation, according to the United States Department of Agriculture.
North Dakota is not solely dependent on agriculture. It also exports machinery and crude oil products. The energy industry — both oil and alternative sources — is expanding, according to state labor market analyst Kevin Iverson. The natural resources and mining sector added 4,000 jobs to their payrolls since last March.
"Oil is an absolutely booming industry in the state," Iverson said, noting that the western portion of the state has benefited as companies direct their attention to the Bakken rock formation as a potential oil reservoir.
The dollar's declining value to foreign currencies has is also spurring economic activity in North Dakota. While the state sells almost half its exports to Canada, savvy shoppers from north of the border are crossing in to Grand Forks and Minot to take advantage of what are essentially reduced prices for them and in the process, driving up retail trade.
A potential weak spot for North Dakota is the state's lower than average unemployment rate. Economists worry with fewer people looking for work, companies interested in doing business in North Dakota could potentially bypass the state because of the tight labor market and lack of available workers.
"We view it at worryingly low," Flynn said. "It could be very hard to attract new employers to the area if there is not a ready and available pool of workers."