On September 29, Minneapolis Federal Reserve Bank President Neel Kashkari participated in several listening sessions with community leaders and a town hall luncheon on the School of Mines & Technology Campus. Listening session topics included new developments in the Rapid City Collective Impact initiative, highlights of the Rapid City Downtown Master Plan, an economic impact analysis of Main Street Square, and the outlook for wages and employment in Rapid City.
During the town hall luncheon, Kashkari and former Congresswoman Heather Wilson (now president of the South Dakota School of Mines & Technology) shared dramatic stories of their roles in the historic 2008 bailout, when Kashkari led the Troubled Asset Relief Program at the U.S. Department of the Treasury. Kashkari also provided an overview of the Minneapolis Fed's initiative to end Too Big To Fail (TBTF) banks.
When asked about the survival of community banks facing regulatory compliance issues, Kashkari emphasized the importance of ending TBTF banks first. “If we don’t change anything, more consolidation is coming. Unless somebody does something, that trend is going to continue. My hope is that if we as a country can do something about the biggest banks, and have confidence that we’ve done that, then there will be the opportunity to then relax some of the regulations that are smothering the community banks.”
The Minneapolis Fed has also established the Center for Indian Country Development. The center’s work focuses on outreach and collaboration with tribal communities on efforts including increasing access to credit, business development, housing and homeownership, and education.
If you missed the town hall luncheon, which was hosted by the Black Hills Knowledge Network, the Rapid City Economic Development Partnership and the Rapid City Chamber of Commerce, a recording of the event is available on the Minneapolis Fed's YouTube channel.
While the national economy is currently 4.8 percent, Sioux Falls has the lowest unemployment rate of any city in the nation at 1.9 percent. As reported by CNN Money, part of the low unemployment rate is attributed to the location of Wall Street banks in the city, especially Wells Fargo and Citibank.
Healthcare is another contributor to the low unemployment rate in Sioux Falls. Employment in that sector has almost doubled since 2000. Mayor Mike Huether adds that there are currently 3,000 job vacancies in Sioux Falls. However, with so much of the city already employed, it is difficult to fill those jobs.
To learn more about jobs in South Dakota, please visit please visit the South Dakota Dashboard resource page.
If you’d like more information about Sioux Falls, including data on housing, health insurance coverage and more, visit the South Dakota Dashboard’s Sioux Falls city profile page.
Economic growth in South Dakota’s two major metropolitan areas in 2015 paints a tale of two cities, according to figures released today by the U.S. Bureau of Economic Analysis. While growth slowed to 1.0 percent in the Rapid City metropolitan area, Sioux Falls enjoyed a modest 2.2 percent expansion. Even the stronger economy in Sioux Falls, however, finished below the national average. Real gross domestic product (GDP) in the nation's 381 metropolitan areas increased by an average of 2.5 percent in 2015.
In the Rapid City metropolitan area, GDP grew from $6.23 billion to $6.41 billion in current dollars., while in Sioux Falls total GDP increased from $17.92 billion in 2014 to $18.73 billion.
In Rapid City, economic growth was driven primarily by activity in Trade, Education/Health Care/Social Services, Construction and Natural Resources/Mining, while Services suffered a decline. Meanwhile in Sioux Falls, Finance/Insurance/Real Estate was the leading growth sector with Professional Business Services and Education/Health Care/Social Services also making substantial contributions to make up for declines in manufacturing.
Sioux Falls and Rapid City both generally outperformed surrounding areas in the Northern Great Plains. Casper, WY experienced 0.4 percent growth while Cheyenne, WY saw only a 0.3 percent increase. Fargo, ND experienced a significant decline from its 3.1 percent growth rate in 2014 to only 1.3 percent growth in 2015. Sioux City, IA and Bismarck, ND both saw significant growth at 2.8 and 5.7 percent respectively.
With its release of 2015 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 post-Great Recession recovery slowed in 2012 to 1.5 percent. In 2013, the economy contracted and GDP was negative 1.4 percent, rather than the previously reported 0.9 percent decrease. And when the economy recovered in 2014, the recovery was stronger, with economic growth at 3.5 percent, compared to the 1.3 percent previously reported.
For Sioux Falls, the new numbers indicate that the metro area’s economy was much weaker than previously estimated. Growth slowed considerably in 2013 and 2014 to 0.2 and 0.5 percent respectively, compared to 1.5 percent and 1.7 percent reported earlier by the BEA.
Like Sioux Falls, Cheyenne, WY showed less recovery in 2014 than previously recorded. Estimates for 2013-2014 showed a 2.2 percent increase which was revised to 0.4 percent increase this year. Additionally, estimates in Casper were revised to show a two-year economic slump from 2011 to 2013. Previously a decline was only shown from 2011 to 2012. Estimates in Billings, MT and Fargo, ND remained similar to 2014 figures.
This post has been revised. The original version incorrectly stated that the Rapid City Metropolitan Area’s GDP in 2012 was 3.5 percent; it was actually 1.5 percent.
South Dakotans experienced the lowest real personal income growth in the United States in 2014, according to a new retrospective study by the U.S. Bureau of Economic Analysis. Adjusted for regional prices, real personal income rose only 0.2 percent, compared to 2.9 percent for the country. On a per capita basis, real personal income in South Dakota (in 2009 dollars) declined from $47,456 in 2013 to $47,235 in 2014.
The statewide decline was driven by a sharp drop in farm incomes. In non-metropolitan South Dakota, real personal income dropped 0.8 percent in 2014. Declines in farm income also fueled weak growth in real personal income in Nebraska, Kansas, Iowa and Montana.
Meanwhile, in the state’s two major metropolitan regions, after declines in 2013, real personal income growth rebounded by 2.2 percent in Sioux Falls and 4.0 percent in Rapid City in 2014. On a per capita basis, the increases were smaller, but still positive—0.2 percent in Sioux Falls and 2.3 percent in Rapid City.
Among major cities in the Northern Great Plains, Sioux Falls’ real per capita personal income was the third highest at $48,169, compared to $56,274 in Casper, Wyoming and $49,146 in Bismarck, North Dakota. At $42,182, Rapid City trailed all other cities except Billings, Montana, which had a per capita real personal income of $40,148.
For other recent figures on personal income in South Dakota from the Bureau of Economic Analysis, see the South Dakota Dashboard’s June 22, 2016 post.
Personal income rose 0.3 percent in South Dakota in the first quarter of 2016, compared to a 1.0 percent increase for the US, according to new data released by the US Bureau of Economic Analysis. South Dakota ranked 47th among the fifty states, trailed only by Louisiana, Wyoming and North Dakota.
Substantial declines in income from farming and mining hammered the Plains region, which lagged the rest of the country in the first quarter. Nationally, farm earnings dropped 3.5 percent in the first quarter, after falling 9.2 percent in the fourth quarter of 2015. Meanwhile, mining earnings declined for the fifth consecutive quarter and were a major contributor to income losses in Wyoming and North Dakota. According to the BEA, “Since peaking in the fourth quarter of 2014, mining earnings have declined 15.8 percent nationally, 21.8 percent in Wyoming and 44.7 percent in North Dakota.”
South Dakota’s limited income growth was primarily driven by increases in transfer payments, which includes Social Security and other government benefits paid to individuals for which no current services are performed. Increases in these transfer payments accounted for 53 percent ($67 million) of the $126 million increase in personal income in the state.
Earnings by sector rose in Construction (up $68 million), Health Care and Social Assistance (up $66 million), as well as Finance and Insurance (up $42 million) and accounted for the most significant gains in South Dakota, while earnings from Farming fell by $255 million.
For more information on trends in personal income in South Dakota, visit the Bearfacts page at the US Bureau of Economic Analysis. Trends in Median Household Income are available on the South Dakota Dashboard.
South Dakota experienced its strongest economic growth since 2011 as the economy expanded by 1.8 percent in 2015, according to new data released by the U.S. Bureau of Economic Analysis (BEA). While the U.S. economy grew by 2.4 percent, the state’s inflation-adjusted economic growth rate was good enough to rank 22nd among the 50 states, and 24th on a per-capita basis. The state’s total GDP in inflation-adjusted dollars was $40.7 billion.
During all of 2015, 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 billion to $3.2 billion, and retail trade, which rose from $2.9 billion to $3.1 billion. Other sectors showing positive growth in 2015 included construction (from $1.6 to $1.7 billion), health care and social assistance (from $3.6 to $3.7 billion), professional and technical services (from $1.1 to $1.2 billion), real estate and rental and leasing (from $4.1 to $4.2 billion), and wholesale trade (from $2.9 to $3.0 billion). Declining sectors included manufacturing (from $3.9 in 2014 to $3.8 billion in 2015) and transportation and warehousing (from $1.0 in 2014 to $0.9 billion in 2015).
South Dakota’s growth in 2015 was the fourth best among surrounding states, topped by Montana (3.5 percent), Minnesota (2.4 percent) and Nebraska (2.1 percent). Meanwhile, a significant decline in mining activity contributed to a contraction of gross domestic product in North Dakota (-2.1 percent).
Fourth Quarter 2015
In the fourth quarter alone, South Dakota’s gross domestic product grew by 2.3 percent, buoyed by the agriculture, forestry, fishing and hunting sector; as well as construction, wholesale trade, professional services, management, health care, and information.
South Dakota’s economy grew in the fourth quarter despite significant setbacks in key sectors and neighboring states. A national decline in the finance and insurance sector in 2015, for example, resulted in a drop in this sector in the fourth quarter in South Dakota. Other declining sectors included real estate, accommodation and food service, mining, utilities, non-durable goods manufacturing, transportation and warehousing, and government.
The economy in West River South Dakota is being affected by depressed grain and energy prices. Hear about how major layoffs in the coal fields of eastern Wyoming, declining oil production in North Dakota and and plummeting farm incomes in eastern South Dakota will ripple through the Black Hills region from economist Jacob Mortenson.
Mortenson, a consulting economist with the Black Hills Knowledge Network and South Dakota Dashboard, will speak at noon, Monday, June 27, at the South Dakota School of Mines & Technology's King Hall in Rapid City. Tickets are $25. You can register online.
Mortenson, a native of Fort Pierre, has worked for a non-partisan agency in the U.S. Congress forecasting federal income tax revenue. His research, primarily on tax policy, has appeared in academic journals, as part of the Federal Reserve Board's working paper series, and has been featured by the Wall Street Journal. He lives in Sioux Falls.
Mortenson’s presentation is made possible with funding from Regional Health, Security First Bank, Black Hills Community Bank, West River Electric, Golden West Telecommunications, Wells Fargo Bank, the City of Rapid City, Rapid City Economic Development Partnership and the Bush Foundation.
South Dakota's Black Hills might be a world-famous tourism destination, but when it comes to visitor spending it's Minnehaha County in southeast South Dakota that ranked No. 1 in 2015, according to a study published by the South Dakota Department of Tourism.
Minnehaha County accounted for about a fourth of all tourism spending in 2015. Pennington County, home to Mount Rushmore, was No. 2, and accounted for about a fifth of all tourism spending that year.
Minnehaha County is home to the state's largest city, Sioux Falls, which dominates the state economically and drives growth in surrounding counties. The city's financial sector fuels a vibrant business environment, the state's highest wages and low unemployment.
On the other side of the state is Pennington County, home to the second-largest city of Rapid City and longtime anchor to the state's tourism industry. Tourism is often referred to as the second-largest industry behind agriculture. As a region, the 15 counties that make up the Black Hills & Badlands region remained the leader in tourism followed closely by the 14-county Southeast region.
The study defines tourism spending as money spent on lodging, food/beverage, retail, recreation and transportation based on a survey of visitors cross-checked against several other statistical sources that measure taxes, travel and employment data.
Here's a look at 2015 tourism spending by region:
The Southeast region grew faster than the Black Hills & Badlands region from 2014 to 2015, 4.8 percent compared to 2.1 percent. The Black Hills & Badlands region accounted for more than half of all 2015 lodging sales.
The Black Hills & Badlands region also includes the state's No. 3 county for tourism spending, Lawrence County, where tourists spent $475 million in 2015. Lawrence County is home to the historic Wild West and modern-day gambling town of Deadwood along with winter skiing and snow sports plus the town of Spearfish along Interstate 90.
Here are the top 10 counties for 2015:
The study concluded that the tourism industry directly supported 36,377 jobs statewide in 2015 and generated $734 million in wages.
More than half of tourists to South Dakota come from nine states, with Minnesota far in the lead, according to a study published by the South Dakota Department of Tourism.
Minnesotans accounted for 11 percent of visitors to the Rushmore State in 2015, followed by Texas (6.7 percent), South Dakota itself (6.3 percent), Missouri (6.1 percent), North Dakota (5.4 percent), Colorado (5.1 percent), Nebraska (4 percent), Iowa (3.9 percent) and California (3.7 percent).
Nearly half -- 49 percent -- were people who had not been to South Dakota in at least five year, qualifying them as "new visitors." Thirty percent were visiting friends and family, while 70 percent were on "marketable" trips, meaning a leisure vacation during which visitors were far more likely to stay in hotels. Those "marketable" trips are concentrated during the summer months, while the visits to friends a family a spread throughout the year.
The internet is the dominant trip-planning tool for South Dakota tourists, with 81 percent using online tools to plan their trip. However, just 4 percent use social media to plan trips. A third rely on advice from friends and family, while 30 percent rely on preview sites such as TripAdvisor and 26 percent use the state's tourism website, TravelSouthDakota.com. Five percent get information from chambers of commerce and 7 percent have called the state's toll-free number to request information.
Twelve percent of South Dakota's visitors arrived by airplane while the rest drove a vehicle -- ranging from a motorcycle to an RV -- or rode in a motorcoach.
Nearly three-quarters -- 72 percent -- visited the Black Hills and Badlands region, followed by 28 percent to the Southeast region, 19 percent to the Glacial Lakes and Prairies region and 11 percent to the Missouri River region.
Most visitors report high satisfaction with their excursions to South Dakota, with 89 percent ranking them "excellent" (51 percent) or "very good" (38 percent). Another 10 percent ranked their visits as "good" and 1 percent "fair."
In 2015, 13.7 million tourists visited South Dakota, and they spent $3.8 billion. Almost half of that went to pay for food/beverages and transportation (think gas money), according to a study of tourism's economic impact released by the South Dakota Department of Tourism.
The categories of food/beverages and local transportation each accounted for 22 percent of total tourist spending in 2015, equaling 44 percent when combined, according to the report. Those categories were followed closely by retail spending (21 percent), then by recreation and entertainment (14.8 percent). Air travel accounted for 1.6 percent of spending.
While visitor spending was flat in 2015 -- up 2 percent without adjusting for inflation -- the report notes that reflects increased spending to make up for gas prices lower by about $1 per gallon than in 2014. Take transportation spending out of the equation, and tourist spending went up 5.5 percent without adjusting for inflation.
Spending on transportation dropped 8.5 percent while spending on lodging was up 9.3 percent, up 6.6 percent on food and beverages, up 3.7 percent on recreation and entertainment, up 2.4 percent on retail sales and up 0.4 percent on air travel.
The month of July was noteworthy, as a record number of hotel rooms were sold (630,000), a record number of people stopped at the South Dakota Information Centers (700,000) and more than 1 million visited national parks in the state.
Visitors from other states accounted for the lion's share of spending in 2015, $2.8 billion of the $3.8 billion total. South Dakotans themselves accounted for $869 million while international visitors accounted for $115 million.
The report finds that the tourism industry directly generated $1.2 billion worth of gross domestic product and had a $2.4 billion economic impact on the state.
The tourism industry directly accounted for 32,337 jobs and, indirectly, a total of 52,166. The number of directly supported jobs has grown for six consecutive years and was up 1.3 percent year-over-year in 2015.