Plains Gross Domestic Product increased to $1.2tn in 2015
The Plains Gross Domestic Product (GDP) increased to $1.2tn in 2015, compared to $565bn in 1997 a rise of 106% over an eighteen year period, just below the 110% increase nationally. The government sector made up 11% of the Plains GDP in 2015, and the private sector 89%, 66% in services and 23% in goods, a very similar profile to the Great Lakes region, although the latter is almost twice as big.
The Plains region contributed 6.7% to the national economy.
Plains Gross Domestic Product increased by 4.1%p.a. from 1997 to 2015
From 1997 to 2015 the compound annual growth rate (CAGR) of the Plains Gross Domestic Product was 4.1%p.a. from 1997 to 2015. Services grew the fastest by 4.3%p.a. (USA 4.5%), followed by a 3.9%p.a. (USA 4.1%) increase in the government sector and 3.5%p.a. (USA 3.2%) in the goods sector. Performing just below average in all sectors, the Plains region ranked 5th of eight regions for GDP growth.
Greater insights into the momentum behind the Plains regional economy are revealed when the CAGR% are calculated for the three very distinctive periods in the 1997 to 2015 time period, namely:
1997 to 2007: The Pre-Recession Years
2008 to 2009: The Great Recession Years
2010 to 2015: The Post-Recession Years
The growth in Plains Gross Domestic Product relative to the other states contrasts considerably over all three periods. In the pre-recession period the Plains ranked 6th, before ranking 2nd during the Great Recession years and 3rd in the post-recession years, growing as it did by 4.8%p.a., 1.1%p.a., and 3.9%p.a. respectively.
The reason for this improvement from 2008 onwards is largely down to the private goods-producing sector. This sector only fell by 1.4%p.a. from 2008 to 2009 (USA down 5%p.a.) which was the smallest decline during the recession period for the goods sector in any region.
Plains goods-producing sector is growing faster than the service sector post-recession
Post-recession goods GDP has grown by 4.7%p.a. (USA 3.7%) which ranked third of eight regions, behind the Southwest (5.3%p.a.) and Mideast (5.6%p.a.). The goods sector grew faster than the service sector post-recession which is extremely encouraging for its industrial sector, and is one of only three regions where that happened, the others being the Great Lakes and the Southwest regions. The good sector therefore increased its share of the Plains Gross Domestic Product from 21.6% in 2009 to 22.6% in 2015.
The services sector also did well during the recession period, and grew by 1.4%p.a. (USA 0.4%) from 2007 to 2009. Only New England’s service sector grew faster in the recession years, by 1.8%. Post-recession the Plains service sector continued to grow at 3.9%p.a. (USA 4.2%) and was ranked 4th, whereas New England’s ranked 8th with a growth rate of 3.2%.p.a.
In conclusion there appears to be a momentum shift in the Plains economy post 2007 when compared to the other regions. From 1997 to 2007 the Plains economy ranked 5th of 8th but it ranked 2nd in the Great Recession years of 2008 and 2009 and ranks 3rd from 2010 to 2015, and it is the private sector in particular that is driving this improvement. Its goods and services sectors performed particularly well during the recession years and the goods sector is growing faster after the recession than it did before, and is also growing at a faster rate than the services sector, which is very encouraging. More detailed analysis by state and industry in later posts will reveal some more insights into the economic performance of this region.
To see the same posts for the other regions, here are the links
Gross Domestic Product data is sourced from the Bureau of Economic Analysis (BEA) and is up to date as of June 20th 2017.
