GDP data confirm what our lagging sales tax figures indicate—South Dakota’s economy is sinking:
New data from the Bureau of Economic Analysis shows that South Dakota’s economy shrank 0.3% from Quarter 1 to Quarter 2 this year. Iowa was the only other state going negative, with its GDP shrinking 0.7% in Q2.
It was bad to be farming, good to be mining:
Nationally, mining increased 28.6 percent and was the leading contributor to growth for the nation and in the three fastest-growing states of North Dakota, Wyoming and Texas in the second quarter. Mining contributed to growth in 49 states led by increases in oil and natural gas production.
By contrast, agriculture, forestry, fishing, and hunting decreased 10.6 percent and subtracted from growth in 25 states, including every state in the Plains region, which experienced high levels of crop production in 2016. This industry was the leading contributor to the decreases in real GDP in Iowa and South Dakota— the only two states to decrease in the second quarter [Bureau of Economic Analysis, “Gross Domestic Product (GDP by State: Second Quarter 2017,” BEA Blog, 2017.11.21].
BEA data show three straight quarters of GDP decline in South Dakota—that’s a recession in some books. Yet darn near all of us (97.0%) have jobs.
I notice Wisconsin’s rate of GDP increase is fairly healthy at 2.5%, yet there is considerable bitching going on in some areas of the state. There’s a bit of a problem just reporting on statewide numbers. Almost all of Wisconsin’s growth has been in the liberal Dane County (Madison) area, and there are declines elsewhere. I wonder if this holds true throughout the US: are the more progressive areas of each state having the most growth? That might say something about what sort of policies work best in spurring development.
97% of what population has jobs should be the question. When you toss in all of South Dakota’s working age citizens, you will see that 97% is not the case. Reservations are still more or less the same year in and year out, chronically unemployed.
A real governor and a real legislature could remedy our gdp in short order. Add Medicaid Expansion would do wonders to the economy and even improve the ag economy as well (farmers and ranchers would each have several thousand more to pump into the economy with lower insurance rates). Do more to expand renewable energy would put those thousands of jobs on the boards that Thune thinks will come from highway robbery masked in the cut cut cut tax bill.
We will never see real sustained growth with a republican governor and with a complete republican legislature. Change needs to happen.
True, Jerry, our 3% unemployment rate does not fully reflect the huge jobless numbers on the reservations. However, the undercount of tribal unemployed is not a new phenomenon and thus does not explain the apparent recession of 2016Q4–2017Q2.
Donald, I’d love to see the deep analysis of the numbers to search for a correlation between those healthy GDP increases and progressive attitudes. In pure armchair speculation, I’d suggest that conservative attitudes would get in the way of adapting to the new economy. Conservative attitudes in South Dakota would keep us economically undiversified and wed to agriculture/commodities, which our friend Mr. Tsitrian would note is a recipe for economic trouble.
Montana politicians are actively working to take themselves off that list – they just signed a several billion dollar deal with China for a meat packing plant and beef sales. This week they go to India to sign a multi billion dollar grain deal. When was the last time Rounds, Noem, Thune, or any of the state legislators went and promoted any SD products? Montana and Wyo also cut a deal with Verizon to keep rural service did SD bother?