Threats and opportunities from the west: UAS, Oil Patch seen as ways northeast North Dakota can diversify economy
GRAND FORKS — The most important threat facing northeastern North Dakota may be the potential loss of its economic status in the face of rapid, “at times chaotic,” growth in the Oil Patch of western North Dakota, according to a study completed this week by University of North Dakota economist David Flynn.
“The threats are real and need to be addressed and possibly neutralized,” Flynn wrote in the study’s summary.
The study, conducted for the Red River Regional Council, will serve as a regional planning tool, according to Executive Director Dawn Keeley.
The Economic, Social and Demographics Analysis study illustrates some cautionary signs in the agriculture industry, which dominates the region, as well as opportunities to cash in on the fledgling unmanned aerial system industry and the Oil Patch.
Flynn will present the study to the council today in Grafton, and community strategic planning meetings will begin late this month in Pembina County.
“We want to be sure we fully understand our regional statistics so that we move through the strategic planning efforts in a way that can capitalize on the strengths of the region,” Keeley said in a news release.
The study shows a strong regional economy with a few key sectors, such as agriculture, leading the way.
The government sector plays a large role in regional employment at 21 percent. Manufacturing employment accounted for 4.8 percent of employment and 17.3 percent of the economic output.
The top five regional employment sectors are government, health and social services, retail trade, agriculture, and accommodations and food services.
The study includes demographic and economic data in each of the four counties as well as the region as a whole.
However, data indicate the four-county region actually contains five distinct economies, including Nelson, Pembina, Walsh and rural Grand Forks counties, as well as the city of Grand Forks, according to Flynn, director of the UND Bureau of Business and Economic Research.
“Trends and fundamentals in the City of Grand Forks are, in many cases, not replicated in rural Grand Forks County,” he said in a news release. “Rural Grand Forks County data are more similar to Nelson, Pembina, and Walsh Counties.”
The study points out the sharp decline in sugar beet grower income of $370 million in the 2013 crop, representing a 50 percent cut from 2012, according to Flynn.
“That will have rippling effects throughout the northern Red River Valley,” he said.
While the UAS industry is in its infancy, the study indicates the region’s proximity to Grand Forks, which is becoming the headquarters of the state’s UAS development, provides substantial growth potential.
The study said the Oil Patch development should provide economic opportunities for certain segments of the region.
Each of the four counties will participate in strategic planning to guide the work of the county job development authorities and the Red River Regional Council for the next five years, according to Keeling.
Strategy committees are being developed in each of the four counties and will include more than half of the members from the private sector.
Pembina County’s strategy committee will meet March 31 and April 1. Walsh County’s strategy committee will meet April 2 and 3.
“Communication of priorities and carefully planned partnerships are likely important to maintain the economic vitality of these four regions going forward,” Flynn wrote.