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.