UNDATED – South Dakota’s economy showed no growth in the fourth quarter of 2024, a surprising development given the economic expansion in most other states.
That’s according to new data released Friday by the U.S. Bureau of Economic Analysis.
South Dakota’s real gross domestic product (GDP) remained unchanged, making it one of only two states without economic growth. Idaho had a flat economic performance.
Most states experienced economic expansion in the final months of 2024, with 48 states and the District of Columbia reporting GDP increases. The growth rates ranged from 5.1 percent in Arkansas to 0.6 percent in Vermont.
For 2024, South Dakota was one of only two states without annual economic growth.
South Dakota’s flat growth contrasts with some of its neighbors. Wyoming saw a 3.8 percent increase, while Montana’s economy grew by 2.7 percent in the fourth quarter. North Dakota posted a 2.1 percent gain.
Minnesota’s economy expanded by 2.9 percent, showing a stronger performance than the national average. To the south, Iowa saw modest growth of 1.7 percent, while Nebraska’s economy increased by 2.0 percent.
Construction played a significant role in regional growth, increasing in 48 states and the District of Columbia. It was Utah’s leading contributor to growth, with the fourth-highest GDP increase nationally.
Mining activity increased in 45 states and was a key economic driver in several others, including Alaska, which posted the third-largest GDP increase.
While GDP growth remained stagnant, personal income trends tell a different story.
Despite the lack of economic growth, personal income in South Dakota increased 4.4 percent in the fourth quarter, matching the middle tier of states nationwide. Personal income grew in all 50 states during this period.
Wyoming residents saw higher income growth at 4.7 percent, while Minnesota led nearby states with a 5.3 percent increase. North Dakota posted a 5.1 percent gain in personal income.
Nebraska and Iowa showed more modest personal income growth at 4.5 percent and 4.1 percent, respectively.
For 2024, personal income increased in all states, though the rates varied widely. North Carolina led the nation with a 6.9 percent increase, while North Dakota reported the smallest gain at just 0.1 percent.
The BEA and regional economists say South Dakota’s economic stagnation in late 2024 stemmed from a severe workforce shortage (33,000 open jobs vs. 10,000 unemployed), declining farm income, weakening consumer spending, and higher interest rates impacting the banking sector.
After unusually strong post-pandemic performance, the state appears to be reverting to pre-pandemic growth patterns. That’s according to Jared McEntaffer, CEO of the Dakota Institute, who noted in October 2024 that the economy is seeing “a return to more of the normal” after years of uncharacteristically strong growth.
The next economic report will be released on June 27, 2025, covering the first quarter of 2025.
