Rural South Dakotans have greater access to wired broadband telecommunications services than many of their counterparts across the country, according to a new report released by the South Dakota Dashboard and the South Dakota Telecommunications Association. Better than 76 percent of customers who lived outside of the state’s major metropolitan areas were able to subscribe to broadband speeds of 25 MB download and 3 MB upload or higher as of December 31, 2017, compared to 61 percent nationwide.
The new report, entitled Connecting South Dakota’s Future, also shows that rural telecommunications providers in the state are installing fiber optic lines at an accelerating pace. Over 65 percent of South Dakota Telecommunications Association customers were served by fiber-to-the-premises. In contrast, a nationwide survey in 2016 found that just over 40 percent of rural telecommunications companies’ customers were being served by fiber-to-the-premises.
“This pace of broadband deployment bodes well for rural communities,” says South Dakota Dashboard Project Director and Regional Economist Dr. Jared McEntaffer, “because the internet is rapidly becoming a central marketplace for the exchange of goods and services.”
McEntaffer says capital investments by South Dakota rural telecommunications companies also play a significant role in economic development. Between 2013 and 2017, the state’s rural telecommunications companies invested nearly $392 million in fiber optic lines, switches, equipment, buildings, and other long-term assets and generated nearly $480 million in economic impact.
Just over half of all South Dakotans live in non-metropolitan areas served by the community-based companies that are members of the South Dakota Telecommunications Association. These companies include cooperative, small commercial, municipal, and tribal telecommunications entities who cover 60,159 square miles, or more than three quarters of the state’s geography. Serving remote communities can present serious challenges. While the report estimates that it costs an average of $25.54 per resident to install fiber optic lines in Sioux Falls, the average cost per resident rises to $3,571 in rural South Dakota.
SDTA Executive Director Rich Coit noted that federal loans and grants provided through the U.S. Department of Agriculture’s Rural Utilities Service (RUS) and the federal “Universal Service Fund” (USF) have played a significant part in addressing these cost differentials and in speeding rural broadband deployment in South Dakota. In 2016, telecommunications companies in South Dakota, including non-rural and rural local exchange carriers, received nearly $100 million in USF funds. In 2017, the RUS approved loans to rural telecommunications carriers in South Dakota that totaled $116.7 million, accounting for 17 percent of all dollars allocated nationally under the related RUS programs. “These dollars ensure that rural telecommunications companies are able to serve customers who live in remote or sparsely populated parts of our state,” says Rod Bowar, president of the South Dakota Telecommunications Association and manager and majority owner of the Kennebec Telephone Company.
Connecting South Dakota’s Future: A Report on the Deployment & Impact of Rural Broadband provides data on the state of rural broadband in South Dakota and compares the state to the nation as a whole. It focuses particularly on the services provided by the 18 companies who are members of the South Dakota Telecommunications Association and the broadband backbone provider the SDN Communications. For the full report, see attachment at the bottom of this webpage.
ABOUT THE SOUTH DAKOTA TELECOMMUNICATIONS ASSOCIATION:The South Dakota Telecommunications Association supports the efforts of its member companies to effectively deliver state-of-the-art communications services to the communities they serve. SDTA also provides educational and training opportunities on the newest and best technologies available to the industry. (www.sdtaonline.com).
The US Bureau of Economic Analysis released its Q1 Personal Income report on June 21, 2018. The report showed signs that the South Dakota economy may be turning around. Personal Income, which includes wage, business, and investment income, grew by 4.9% between Q4 2017 and Q1 2018. South Dakota ranked 20th in the nation as a result.
Net earnings (i.e. the portion of personal income derived from wage and salary earnings) also rose by 5.7% from Q4 2017 to Q1 2018 versus only 4.7% for the nation overall. Growth in net earnings is typically a sign of a healthy labor market where either more people are working, wages are rising, or some combination of both.
The report also hints that the Ag sector may be turning around after significant declines in 2017. Personal income in the Farm sector grew by 0.28% percentage points, or $29 million during Q1 2018. Farm sector personal income growth in the South Dakota was 4th in the nation, trailing behind only Vermont, Wyoming, and North Dakota, where farm incomes grew by 0.96%, 0.63%, and 0.42%respectively.
Other signs of an improving economy were seen in strong personal income growth in the Construction, Durable goods manufacturing, and Health care industries whose rates of personal income growth were 0.44%, 0.40% and 0.57% respectively.
The performance of the construction and durable goods manufacturing industries are often considered leading indicators of economic performance, but their performance can also be volatile and highly sensitive to macroeconomic conditions and market confidence. Trade frictions between the United States and its trading partners could slow these sectors in the near to medium turn. The Ag sector could face similar headwinds in the future as well. In light of these considerations, it may be necessary to temper expectations of such strong performance in Q2 2018.
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).
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%.
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:
South Dakota’s Gross Domestic Product (GDP) grew by just 0.5% in the third quarter of 2017, according to a recent release from the Bureau of Economic Analysis. This was the slowest rate of state GDP growth in the nation.
The Agriculture, Forestry, Fishing and Hunting industry was the primary reason for slow growth in the third quarter; owing to dry conditions and low crop prices in 2017. In South Dakota, the Agriculture, Forestry, Fishing and Hunting industry contracted by 2.7% in the third quarter, as compared to 2.4% nationally. A view of the Agriculture industry’s impact on the regional third quarter GDP is below:
|State||% Decline in Agriculture||% Change from Q2||National Ranking|
The primary growth driver in the third quarter was the Finance and Insurance industry, which grew by 1.7%. Nationally, the Finance industry increased by 14.7% and was the top contributor to growth in seven of the ten fastest growing states. Several other industries also contributed to third quarter growth: Durable Goods Manufacturing (0.5%), Retail Trade (0.4%), and Health Care and Social Assistance (0.4%).
Gross domestic product (GDP) fell by 0.3 percent in South Dakota during the second quarter of 2017, according to the Bureau of Economic Analysis. South Dakota was one of two states to experience a decline in GDP during this time period, largely due to a slump in the Agriculture industry.
Most of the Northern Plains Region was hard hit by the national downturn in Agriculture. Across the United States, the Agriculture industry contracted by 10.6 percent; 1.7 percent in South Dakota. Iowa was particularly hard hit by the downturn in Agriculture, leading to a 0.7 percent reduction in state GDP, the largest decline in the nation. The table below highlights GDP in the region in the second quarter:
An uptick in Mining offset many of the declines in Agriculture across the region, however. Nationally, the Mining industry increased by 28.6 percent. While Agriculture declined by 2.6 percent in North Dakota, Mining increased by nearly 7.0 percent. Owing to this strong performance of the Mining industry, North Dakota and Wyoming ranked first and second for GDP growth among the fifty states.
|Iowa||Minnesota||Montana||Nebraska||North Dakota||South Dakota||Wyoming|
In South Dakota, the Construction, and Finance and Insurance industries also decreased by 0.5 and 0.6 percent, respectively. However, Real Estate and Rental Leasing, Healthcare and Accommodation and Food Services all increased slightly, by 0.4 percent.
Personal income grew by just 0.4 percent in South Dakota during the second quarter of 2017, according to a recent release from the Bureau of Economic Analysis. South Dakota lagged behind the national average of 0.7 percent, placing the Rushmore State at No. 44 in the nation.
As in the first quarter of 2017, a contraction in the farming industry contributed to slow personal income growth in the second quarter. Personal income in the farming industry declined by 0.25 percent in the second quarter of 2017—an improvement from the decline of 0.5 percent in Q1 2017. While the construction industry contributed to growth in the first quarter, the industry declined by 0.07 percent in the second quarter. Limited personal income gains in the second quarter were driven by finance and insurance at 0.12 percent growth and healthcare and social assistance at 0.9 percent growth.
Regionally, South Dakota outperformed Minnesota, Iowa, and Nebraska. North Dakota experienced the greatest growth in personal income in the region at 0.7 percent, while Iowa and Nebraska tied for last with a mere 0.1 percent rate of growth. Second quarter personal income growth for the region can be viewed in the table below:
Both Rapid City and Sioux Falls made modest gains in economic growth in 2016, according to recently released figures from the Bureau of Economic Analysis. Rapid City’s economy grew by 1.2 percent, while the Sioux Falls economy grew by 2.2 percent gain. The average growth in real Gross Domestic Product (GDP) across all US metropolitan areas was 1.7 percent.
As measured in current dollars, real GDP in the Rapid City metro area grew from $6.3 billion in 2015 to $6.5 billion in 2016. In Sioux Falls real GDP increased from $17.9 billion to $18.7 billion over the same period.In Rapid City, economic growth was driven primarily by activity in Education/Health Care/Social Services, Construction and Government. However, there was a significant decline in Finance/Insurance of 0.19 percent, placing the Rapid City metro area at odds with the national trend of growth in finance of 1.2 percent. Meanwhile in Sioux Falls, the Trade and Construction sectors grew by 0.42 and 0.37 percent respectively. Durable and Non-durable Goods were the only sectors to experience declines in 2016 at -0.1 and -0.3 percent, respectively.
Economic growth across the wider plains region varied greatly in 2016. The Casper, WY MSA experienced the second largest decline in real GDP in the United States at -11.6 percent, largely due to a decline in the Natural Resources/Mining sector. In North Dakota, the economy of Bismarck declined by 4.1 percent while Fargo’s GDP increased by 2.3 percent. Sioux City, IA grew by 2.5 percent.
With its release of 2016 data, the BEA also revised its calculation of economic growth in prior years based on new information. For Rapid City, the revised numbers indicate that the economy was weaker than originally reported. In 2015, the economy contracted and GDP was declined by 1.3 percent, rather than the earlier projection of the 1.0 percent increase.
For Sioux Falls, the new numbers indicate that the metro area’s economy was much stronger than previously estimated. In 2015, the Sioux Falls economy grew by 4.0 percent, up from last year’s projection of just 2.2 percent.
Agriculture is one of the largest and most important industries in South Dakota, contributing $25.6 billion toward the economy and employing 115,000 people, according to Ag Week. Recognizing the importance of agriculture in South Dakota, Governor Daugaard has held an annual agriculture summit each year of his administration.
During the 2017 Governor’s Agricultural Summit, a variety of topics were discussed including animal health, innovation, and the agricultural economy. South Dakota State Veterinarian Dustin Oedekoven discussed the importance of reducing dependence on antibiotics in livestock while Jim Roth from Iowa State University discussed the potential $200 billion negative impact foot and mouth disease could have on agriculture in the United States, if the disease were to become widespread.
Economist Matt Roberts provided summit attendees with an overview of the agricultural economy, noting that while the price of grain has fallen recently, the market may be leveling out. Additionally, predicaments with crops in the past year have allowed some farmers to price their corn at $4 per bushel and soybeans at over $10 per bushel.
For more agricultural data resources, visit the South Dakota Dashboard’s Further Data Resources.
Real gross domestic product (GDP) in South Dakota declined by 3.8 percent in the first quarter of 2017, according to recently released data by the Bureau of Economic Analysis. With this drop, the Rushmore State finished 49th in the nation for GDP growth, lagging all other states except Nebraska. Texas landed in the No. 1 spot with 3.9 percent GDP growth.
The table below shows that many states in the Great Plains region experienced similar, if less severe, economic contractions during the first quarter of 2017. The primary driver of widespread decline in output was a crunch in the agricultural sector. National output in the Agriculture, Forestry, Fishing, and Hunting sector declined by 39.8 during the first quarter. South Dakota experienced the largest decline in this sector in the nation—a drop of 6.0 percent.
Setbacks in Retail Trade and Finance also contributed to South Dakota’s lagging GDP in the first quarter, with each sector falling by -0.4 and -0.1 percent, respectively. Areas of growth in the state included Construction at 0.6 percent, Government at 0.5 percent, Real Estate at 0.4 percent, and Durable Goods at 0.5 percent.
North Dakota experienced the fastest GDP growth in the region at 1.6 percent. Wyoming placed second with 0.9 percent economic growth. The positive growth in both states was driven by strong gains in their Mining and Resource Extraction industries which compensated for declines in Agriculture. View the table below for first quarter economic growth and decline in the region:
|State||Percent Change in GDP||National Ranking|
Individuals earning a minimum wage in South Dakota must work 51 hours per week in order to afford a one-bedroom apartment in South Dakota, according to a recent report by the National Low Income Housing Coalition. In order to afford a two-bedroom rental home, South Dakotans would need to make $14.12 per hour, or work 65 hours per week at the minimum wage.
Douglas County is the most expensive county to live in, with an hourly wage of $16.58 per hour required to afford two-bedroom rental housing as defined by 2017 Fiscal Year Fair Market Rent. Pennington, Custer, Lincoln, Turner, Minnehaha and McCook Counties all required earners to make over $15 per hour to afford a two-bedroom apartment.
Regionally, South Dakota required the lowest wage to afford a two-bedroom housing unit at $14.12 per hour, ranking the state 49th nationally. Iowa, Nebraska and Montana also required relatively low wages to afford two-bedroom housing hovering around $14/hour. North Dakota, Wyoming and Minnesota required higher wages to afford housing. The weekly hours required to afford two-bedroom housing at minimum wage as well as the wage required to afford housing at forty hours per week can be viewed below:
|State||Wage Required to Afford Two-Bedroom Housing||Weekly Hours Required to Afford Two-Bedroom Housing at Minimum Wage||National Ranking|
While housing in the Sioux Falls metropolitan area has previously been more affordable than housing in the Rapid City metropolitan area, fewer disparities between the two counties were seen this year. In 2016, the fair market rent for a two-bedroom apartment in Rapid City was $825 per month while it was $734 in Sioux Falls. In 2017, fair market rent in Rapid City for a two-bedroom apartment was $823 per month while Sioux Falls rose to $811 per month. A comparison of housing costs in Sioux Falls and Rapid City can be viewed below:
To learn more about housing affordability in South Dakota and across the nation, view the full Out of Reach 2017 report by the National Low Income Housing Coalition.