August 2012: Business Indicators

The national economy continues to languish between recovery and recession. Employment is stable, but lacks the robust growth needed to move the economy forward into recovery. Unemployment is down from a year ago, but remains above 8 percent. Consumer confidence is lacking. Retail sales are up modestly over a year ago, but down in recent months.

However, in North Dakota, the economy continues to lead the nation in several categories. The unemployment rate, at only 2.9 percent, remains the lowest in the nation. Employment growth has nearly doubled the national average over the past year. The U.S. Bureau of Economic Analysis (BEA), in a June 2012 report, ranked North Dakota first in the nation in state gross domestic product (GDP) growth. GDP is defined by the BEA as an inflation-adjusted measure of each state’s production, wherever sold. The national average of all states’ GDP growth was a meager 1.5 percent. In North Dakota, GDP grew by an incredible 7.4 percent. A separate BEA report ranked North Dakota first in personal income growth from fourth quarter 2011 to first quarter 2012. The national average growth rate was only .8 percent; North Dakota’s rate of growth in personal income was nearly three times the national average at 2.3 percent.

Although economic growth is widespread throughout the state, the development of the Bakken oil field has led to intense economic activity that is heavily concentrated in the western half of the state. For example, the statistical area that includes the city of Williston has realized year over year employment growth exceeding 41 percent. Retail sales in Williston are up over 76 percent from first quarter 2011 to first quarter 2012. The unemployment rate in the region is below 1 percent in the most recent months.

At the opposite end of the state, growth continues at a more sustainable pace than in the west. Employment in Fargo grew by 4.9 percent year-over-year. Not comparable to the 41 percent growth in Williston, but still more than three times the national average. The unemployment rate in Fargo is a mere 3.5 percent. Taxable sales and purchases are up nearly 14 percent from first quarter 2011 to first quarter 2012.

Rod Backman, CPA, CFP
Covenant Consulting Group

 

Go to the View Issues page and click on August 2012 to view a table showing a variety of economic measures at the state, local, and national level.

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