The Bureau of Economic Analysis released updated numbers for state level GDP in the last week. The update is through 2019Q1 but it is still an update. There are so many different things to consider and angles to understand that we need to start somewhere. So let’s talk about private versus public share of the economy.
Private Sector v. Public Sector
One of the more constant themes when I appear on the radio discusses the scale of the private sector versus the public sector. So when we look at the relative size of the sectors we see that there is not much change, but that government is getting smaller as a share of the economy in general.
Agriculture v. Mining
Another of the major questions asked frequently has to do with the primacy of sectors in the economy. This question is usually set up as, “Which is more important? Agriculture or Mining?” My generic answer is that it is better to have both rather than only one. However, when it comes to the share of overall GDP there really is only one answer right now. Over the last 14 years or so agriculture held steady to slightly declining while the mining sector, which includes oil increased in importance, if we can say that the share of GDP is a measure of importance.
As a last examination for this post I look at the year-over-year percentage change in the mining sector GDP. This also makes it clear that mining is a growth driver for the state right now.
With year over year percentage changes at times in excess of 50%, and a prolonged period at these high levels it is easy to see why this sector became a new keystone industry in the state and an important driver of activity in all kinds of other sectors.