The Economic Base of North Dakota: A Measure of the State’s Economy in 2012
Creators: name: Coon, Randal C.
name: Bangsund, Dean A.
name: Hodur, Nancy M.
name: Coon, Randal C.
name: Bangsund, Dean A.
name: Hodur, Nancy M.
Publisher: name: Unknown
Year: 2014
Subjects: subject: Financial Economics
subject: Production Economics
subject: North Dakota
subject: economic base
subject: export sales
subject: basic-sector industries
subject: sales to final demand
subject: impact assessment
subject: economic contribution

description: The growth and composition of the North Dakota economy can be measured using economic base analysis. Economic base is defined as the value of goods and services exported from an economic unit. Economic base also can be called a region’s export base because industries (or ‘basic’ sectors) earn income from outside the area. North Dakota’s economic base is comprised of those activities that produce a product or a service purchased by individuals, governments, and businesses located outside of the state. Economic base estimates represent dollars coming into the economy in exchange for exported goods and services. By contrast, economic impact and economic contribution assessments for industries examine the net and gross in-state business volumes, respectively. Comparisons of economic base estimates to economic contribution or economic impact assessments are not appropriate as those evaluations represent different economic measures. Also, measuring the state’s industries using Gross State Product does not provide comparable metrics to economic base, economic impact, or economic contribution assessments. The numbers presented in this report are part of an ongoing data set used to measure export sales in North Dakota. That data base is often used to illustrate changes in the state’s economy and differences in the relative sizes of industries in various regions of the state. North Dakota’s economy has traditionally been driven by natural resource-based activities, i.e., agriculture, coal, and petroleum. Growth in the state’s basic sector industries has accelerated since 2000 with agriculture and energy providing the impetus for this expansion. Efforts to diversify the state’s economy in the 1990s and early 2000s can be linked to the expansion of the state’s economic base, as growth in previous periods was steady, but moderate. More recently, the development of shale oil in the Williston Basin has created the largest change in the state’s economic base. North Dakota’s economic base has grown from $8.3 billion in 1990 to $42.3 billion in 2012 when measured in current (nominal dollars). In terms of constant dollars (removal of the effects of inflation), the state’s economic base went from $13.9 billion in 1990 to $42.3 billion in 2012. From 2011 to 2012, all economic base activities in the state grew in real terms except Federal payments. Agriculture grew by 13.7 percent from 2011 to 2012 (please note that agricultural processing and farm input manufacturing are not included with the agriculture industry due to data limitations). The petroleum sector grew by 100 percent from 2011 to 2012 (gas and crude oil processing is included as data is available to estimate those activities separately from oil and gas production). Manufacturing (which includes agricultural processing and farm input manufacturing) grew by 14.3 percent. Coal mining and conversion was nearly constant from 2011 to 2012, as growth was only 0.1 percent. Tourism grew in real terms by 3.3 percent from 2011 to 2012. Exported services, from 2011 to 2012, grew by 6.5 percent in real terms. Federal payments declined by 5.7 percent over the period. Overall, the state’s exports from