South Dakota Posts Greater GDP Growth than Nation for First Time Since 2011
For the first time in four years, South Dakota’s rate of GDP growth was higher than the national average. In 2016, the state’s economy grew by 1.7% compared to 1.5% for the nation.
South Dakota’s economy shrank between 2011 and 2012, contracting by 0.9%, as depicted in the chart above. Between 2012 and 2015, GDP growth was positive, but the Rushmore State grew more slowly than the nation as a whole.
The weakness in the state’s economy in recent years follows a period of expansion around the time of Great Recession. In 2007, the economy in South Dakota grew by 3.9%, compared to 1.5% growth for the nation. In the heart of the Great Recession from 2008 and 2009, the US experienced a 2.7% decline in GDP, while South Dakota recorded 1.0% growth. In 2011, as the economy recovered and corn prices rose, South Dakota’s GDP grew by impressive 5.0%. (The state's recent high for GDP growth came in 2002 at 10.8%.)
Among the 50 states, South Dakota's 1.7% GDP growth in 2016 ranked 18th, compared to No. 1 Washington, at 3.7%. North Dakota placed last in the nation for GDP growth as its economy shrank by by 6.5%, continuing a recent trend of decline. North Dakota had previously been No. 1 in the nation with 6.0% growth in 2014, due to the Bakken oil boom. The growth in South Dakota’s gross domestic product was led by expansion in the agriculture, forestry, fishing and hunting sector, which increased on an inflation-adjusted basis from $3.1 billion to $3.3 billion, and health care and social assistance, which rose from $3.8 billion to $3.9 billion.
When looking at per-capita GDP, the picture is beginning to look better. In 2014, per-capita GDP was $46,776 and increased to $47,706 in 2015. By 2016, per-capita GDP in the Rushmore State was $48,076, the highest since 2011.
When looking at GDP per working-age adult, South Dakota fares better and exceeded the national amount for four straight years, 2009-2012. In 2016, South Dakota's per working-age adult GDP was $77,644 compared to the national amount of $78,304. Before the recession, the gap was much wider, as much as $10,000 in 2001 and over $11,000 in 2000. That gap diminished in the years leading up to 2008 and only tipped slightly away from South Dakota's favor in 2013.