CHARLESTON, W.Va. -- Job losses in West Virginia's energy sector will continue over the next five years, but gains in other industries will make up for them, according to a forecast by the West Virginia University College of Business and Economics.
The economic forecast, along with a national and global forecast, was presented Thursday at the university's annual Economic Outlook Conference at the Charleston Civic Center.
The state's overall employment level is expected to rise by an average of 1.2 percent each year between 2012 and 2017, pushing the unemployment rate down to 5.7 percent by 2017, according to the 2013 West Virginia Economic Outlook, released Thursday.
The state added 12,600 jobs between 2010 and 2011, an increase of 1.7 percent. The unemployment rate slid from 8.4 percent to 8 percent by the end of 2011 and continued to fall through the first quarter of 2012, according to the forecast.
The coal industry, however, saw a downturn.
"A mild winter sent coal stockpiles at power plants higher, and mines cut back production to compensate," the forecast states. "Natural gas took a larger share of power generation this year as power plants switched from coal to gas when gas prices fell."
Jeff Herholdt, director of the West Virginia Division of Energy, said the competition between natural gas and coal was, in part, because of the reopening of closed gas plants.
"It's not because new gas is coming online," Herholdt said. "It's because gas plants that were shuttered around 2000 are now being brought back into service."
Herholdt said the state's coal-based economy will have issues related to EPA regulations.
"We do have significant issues," Herholdt said. "We're a coal state, we want to continue being a coal state. Roughly 30 states have coal as at least 30 percent of their electrical base. We provide coal from Michigan to Florida."
Coal mining jobs fell significantly in the second and third quarters of 2012. The gross state product in the mining sector will fall through 2017, the forecast projects.
Job losses in the energy industry will continue through the beginning of next year and then level off, according to the forecast.
Gains in other industries, though, are expected to outweigh the losses in the mining industry.
The state's construction sector will recover from the latest recession because of the increasing demand for residential housing.
The health-care industry will see gains in employment because of increased demand for health services for the state's aging population.
Tom Jones, president and chief financial officer of West Virginia United Healthcare System, said the health-care industry faces several challenges, including the implementation of the Affordable Care Act, uncompensated care and underpayments from Medicaid and PEIA.
"I will tell you that much of this cost is shifted to commercial insurers, making it a tax on business," Jones said, "which makes you all less competitive."
Officials say the Summit Bechtel Family National Scout Reserve, a Boy Scout camp in Fayette and Raleigh counties, will bring short-term employment gains to the West Virginia's leisure and hospitality sector.
Steven McGowan of the Boy Scouts of America said The Summit would not compete with adventure businesses in the New River Gorge area.
"Our target is Boy Scouts and their families," McGowan said.
The facility will be open to the public to some extent, but adventure activities such as zip lining and canopy tours will not be open to the general public.