WASHINGTON – Minnesota’s economy grew slower than the United States average in the past year, though the state saw better growth than most other states in its region.
Data released by the Bureau of Economic Analysis (BEA) on Thursday shows the United States experienced 1.5 percent real gross domestic product (GDP) growth in 2016. This is a dip from 2015’s rate of 2.6 percent growth, and also lower than 2014’s rate of 2.2 percent.
Minnesota’s growth held steady from 2015, but at the lower rate of 1.3 percent. The two consecutive years of 1.3 percent growth come after 2014’s 2.6 percent, and 2013’s 2.1 percent GDP growth rate.
The BEA places Minnesota in the “Plains” region alongside Iowa, Kansas, Missouri, Nebraska, North Dakota, and South Dakota. Of these, Minnesota only lost out to South Dakota’s growth rate of 1.7 percent, while crushing Kansas’ 0.2 percent growth, and North Dakota’s 6.5 percent contraction in GDP, ranking dead last. This is the second straight year North Dakota has seen a contraction of three percent or greater. Minnesota also beat neighboring Wisconsin’s GDP growth rate of 1.1 percent.
“States that are No. 1 tend to [be] riding a wave of some kind,” state economist Laura Kalambokidis told the Star Tribune. “We tend to be in the middle of the pack because of our diverse economic base. It gives us steady growth and makes the economy more resilient in downturns.”
Washington state saw the best performance, with 3.7 percent growth.
The majority of Minnesota’s GDP growth came from the Professional, Scientific, And Technical Services sector. This one sector accounted for 0.81 of the 1.3 percent total GDP growth for the state. Health Care And Social Assistance followed in second at 0.31, and the Government sector in third at 0.17 percent. Minnesota’s growth in the government sector was the 11th highest in the country in 2016.
The Real Estate, Rental And Leasing sector performed the worst in Minnesota, contributing a contraction of 0.22 percent against the final 1.3 percent growth total for the state.
