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Thursday, September 6, 2012

ND tops list of states with fastest growing economy

By Paul Moore

The state of North Dakota is doing very well economically, thank you, and there are jobs up there for those willing to relocate.

North Dakota's economy has grown faster than many other states in recent years
North Dakota's had one of the best performing state economies between 2008-2013

While the Unites States’ economy is barely crawling ahead with a 1.5% GDP increase for 2011, North Dakota leads the growth rate in the country with 7.6% GDP growth, according to figures reported by 24/7 Wall Street. Some analysts point to North Dakota’s oil production as the source of this growth, but others believe there is a deeper root.  Let's look into some of the factors.

Facts of growth

Not only does North Dakota boast the country’s fastest growing economy with GDP figures, it also lays claim to the lowest unemployment levels: a mere 3%. In fact, for every month since July 2008, North Dakota has either had the lowest unemployment rate or been tied for that honor. In addition, North Dakota has not seen a 5% unemployment rate since 1987. A small problem has arisen in the state because many people are moving into the rapidly growing and highly lucrative oil and gas job arena, leaving many other North Dakota businesses struggling to find employees. These non-oil based businesses are thriving as a result of the good economy and growing population. This has turned out to be an opportunity for those who are not directly employed by the oil industry to benefit from the growth in the area, as sectors across the board are in need of employees.

North Dakota real estate has been in high demand due to its economic growth
A rising population has been an effect of North Dakota's economic growth

USA Today reports that population figures are also rising in North Dakota, with Fargo topping the 100,000 mark in the latest census, up 15,000 from previous reports. This trend is repeated in a number of other North Dakota towns, including Minot, Grand Forks, and Bismark. It reflects a continuing migration from the rural countryside into larger communities, but also demonstrates an influx of new North Dakota residents.

Contributors to the economy

Without a doubt oil has been, and will continue to be, the biggest boon to North Dakota’s economic strength. It is part of the Bakken oil field that stretches across Montana as well. But Montana’s numbers are not quite as rosy as North Dakota’s. Yes! Magazine reports a 7.7% unemployment rate in Montana, which also had one of the slowest growing economies in the country in 2010, with only 1.1% GDP growth.

However, if oil is not the single magic economic innoculant for North Dakota, what is? North Dakota has long depended on agriculture for its income, with 90% of the state’s land in use for both farms and ranches. Well-known for its wheat exports as well as other crops, North Dakota brings in a whopping $1 billion per year in agricultural subsidies from the U.S. government. Obviously, agriculture plays an important role in the state’s economic stability.

The North Dakota banking sector is unique among states
North Dakota is known for its agricultural, manufacturing and energy industries

An overlooked factor

While oil, agriculture, and manufacturing are certainly important contributors to the success of North Dakota’s bustling economy, some analysts point to a secret that makes North Dakota completely unique when compared to the other 49 states; its state owned bank. While most states turn to outside banks to deposit their tax revenues, North Dakota keeps theirs at home, allowing a portion of the Bank of North Dakota’s (BND) earnings to go back into state coffers, encouraging investment in the state, and supporting a bustling economy. It is the BND that has provided funding for many of the agricultural and oil-field endeavors, and is responsible for the state’s continual surplus. In fact, North Dakota has made significant reductions in both property tax and individual income taxes in recent years.

Good management and keeping the money at home seems to be paying off for North Dakota. Perhaps other states would do well to take a look. Of course, great natural resources help as well, making North Dakota a great state to live in.

About the author: Paul Moore writes for a North Dakota company in the Bakken Oil region.   North Hill Suites offer long-term housing stays and are the perfect solution for the housing needs of companies with an influx of workers to the oil fields.