May 9, 2018

Dwindling Ag Industry Continues Trend of Slow Growth in South Dakota Economy

The economy in South Dakota grew by 0.3% from 2016-2017, according to recent data released by the Bureau of Economic Analysis. Nationally, the Rushmore State ranked 45th in the nation for growth in real Gross Domestic Product (GDP).

2016 2017 GDP

A decline in Agriculture contributed to slow growth across the region. South Dakota experienced the slowest economic growth rate and was the second hardest hit by the decline in Agriculture. Wyoming performed the best in the region with a 2.0% increase from 2016-2017, followed by Minnesota with an economic growth rate of 1.9%.

ag by state

Substantial drought conditions across the states examined contributed to the decline in the Agriculture industry. The top three states impacted by the dwindling Agriculture industry—North Dakota, South Dakota, and Nebraska—also had the highest rates of drought in 2017. Last year, 62.8% of South Dakota was abnormally dry, 41.5% experienced moderate drought, and 18.3% fell into the severe drought category. In North Dakota, 59.9% of the state was abnormally dry, 37.9% experienced moderate drought, and 17.1% suffered from moderate drought. Nebraska fared slightly better with 37.4% of the state in abnormally dry conditions and 7.7% in moderate drought.

Not all sectors saw the same contractions as the Agriculture industry, however. Several industries contributed positively to economic growth in South Dakota during 2017. Health Care and Social Assistance contributed the most to economic growth at 0.4% from 2016-2017, while Durable Goods contributed 0.3%. The leading contributors to economic growth in South Dakota can be viewed below:

contributors to gdp growth

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