The subtitle of this post could be bludgeoning the reader with numbers, but oh well.
As I mentioned in last week’s post (available here) there was a scheduled update to the detailed data on state-level real GDP this week. With any update like this there are many different dimensions to consider. The first aspect to consider is the release of new data. New data provides us an updated look at the state of the economy and (hopefully) a better sense of the good, the bad, and yes, the ugly. In these releases there are also updates to the older data. More complete information is available as time passes so we get a better look at what happened in the recent past.
Let’s actually start with the second point. The revisions to data on agriculture and mining would be important for this piece. The BEA revised down state GDP in 2012 $394 million (-0.87%). There was also a downward revision of “Farm” GDP by $472 million (-14.34%) with the new release. The amount of GDP from “Oil and Gas Extraction” increased by $359 million (+23.24%). I provide the revisions as a percentage of the 2014 vintage data to provide some a better sense of scale. The revisions to the overall GDP number are not that large, while the categories within GDP are potentially much larger. There were revisions to earlier years as well.
Even with these downward revisions the increase in state GDP from 2003 to 2012 was over $19 billion, and the percentage increase increased to +73.87%. Of the $19 billion increase 5.8% was attributable to growth in “Farm” GDP, while 26.2% resulted from the “oil & gas extraction” and “support activities for mining” categories. In the latest revision the “Mining, except oil & gas” category actually fell by $57 million. These are not major changes but it seemed prudent to include them here to see how volatile these estimates might be.
So let’s look at 2003-13 now and see what these numbers tell us. State GDP increased over this time by $19.5 billion (+75.4%). The “Farm” GDP category for North Dakota actually fell by $70 million in this time frame. That is -0.36% of the overall change in GDP over this time. “Oil and gas extraction” and “support activities for mining” increased by nearly $5.5 billion, or more than 28% of the change in real GDP over this time.
The outcome is that oil and gas remain an important sector, and that agriculture actually had a bit of a setback. Now before we make too much of this, we are talking some peak years for agriculture over this time, and a really small decrease from the beginning to the end. Oil and gas might not look great by comparison with another year of data given the price volatility of recent months. This same data release included numbers for the major sectors in 2014, but that will be the subject of a separate post.