2019 SD Statewide Quarterly Economic Report

ANNUAL BUSINESS & ECONOMIC DATA ANALYSIS
SUMMARY
SOUTH DAKOTA
SECRETARY OF STATE
STEVE BARNETT In partnership with
…………………. 2019
PUBLISHED BY NORTHERN STATE UNIVERSITY SCHOOL OF BUSINESS
INDICATORS
Employment (SA) 2019 will go down as a historically solid economic year
The beginning of the year was marked by volatility in the markets largely due to the unknown
effects of ongoing trade negotiations, while the year-end was marked by historic moves in
most stock averages, decreases in unemployment, and increases in personal income.
Most notable in South Dakota, taxable sales, new entity filings, and personal income hit all
vs. prior year time highs in 2019. As you can see from the graph below, employment is catching up with the
new entity filings. It will be interesting to continue to watch the employment numbers, as the
New Entity Filings unemployment rate in SD did increase to 3.2% from 2.9% at the end of 2018.
Nationally, one of the question marks is the federal budget deficit. The federal budget deficit
hit an all-time high at 984 billion dollars on September 30, 2019, as reported by the US
Department of Treasury. While the federal budget deficit has historically been a hot button
topic for politicians, as of late, it hasn’t gained as much attention. Conventional wisdom is
vs. prior year that deficits (and therefore financing them with debt) are bad, and one need only review
historical data to find that periods of high deficits lead to poor economic conditions, as was
Personal Income
the case in 1945, 1982, 1999, and 2009. Looking forward into 2020, one of the potential
bigger issues the economy could face is inflation. Many economists predicted that 2019
would start showing wage-led inflation as the economy reached near full-employment.
Contrary to those predictions, the economy not only experienced the lowest unemployment
rates since the post-war eras, but wage rates only grew on average by just over 2%. As we
vs. prior year head into 2020, we will need to continue to watch inflation and the effects on wage rates.
Unemployment
vs. prior year

EMPLOYMENT
FORECAST
Steve Barnett
South Dakota Secretary of State
State Capitol Note: Red line displays actual seasonally adjusted employment numbers. Source: Seasonally adjusted South Dakota total
500 East Capitol Avenue nonfarm employees from the Bureau of Labor Statistics and the Labor Market Information Center, SD Department of
Pierre, SD 57501-5070 Labor.
1
South Dakota Secretary of State ANNUAL BUSINESS & ECONOMIC INDICATORS 2019
2
Entities in Good Standing, Trademark

& Fictitious Business Name (DBA) Filings
Limited Liability Companies make up 45%

of entities in Good Standing. An entity
must file paperwork each year to ensure
they remain in Good Standing. At the end
of 2019, 89,551 entities were in Good
Standing with the Secretary of State’s
office.
Trademark filings increased in 2019.

Safeguarding the symbols and words that
an entity utilizes in commerce, new
trademark filings numbered 169 in 2019,
which is an increase of 55 over the prior
year. Renewal Trademark filings for 2019
totaled 237, which was an increase of 3.9%
from the previous year’s number.
Fictitious Business Name (DBA) filings

decreased in 2019. Entities must file a
fictitious name statement when operating
under any name other than their true
name. The South Dakota Secretary of State
received 4,084 fictitious business name
filings in 2019, a decrease of 5.2% over the
prior year.
3
South Dakota Economic Indicators
For South Dakota, the economy remains strong. Taxable sales

continued the upward trend by increasing 4.4% over the prior
year. When taking a closer look at the taxable sales, retail
taxable sales grew 3.3% over the prior year. Additionally, the
number of new entity filings in 2019 hit the highest point it has
ever been at 9,801. Although the unemployment rate grew
slightly, this appears to be somewhat of a statistical anomaly in
that not only did initial and continuing unemployment claims
decrease, but total jobs also increased. This could either be the
result of additional people entering the workforce that
previously were not in the workforce statistics or by net inflows
of workers from other states. The overriding concern for the
state remains to be crop prices; however, tourism continues to
show growth, helping to balance those negative effects.
Annual Percent 5 Year

SOUTH DAKOTA Current Period Prior Year Change CAGR*
Wealth
Personal Income (millions of dollars) 48,562 47,567 2.1% 3.8%
Total Sales, 12 mo. trailing (millions of dollars) 76,810 75,783 1.4% 2.2%
Taxable Sales, 12 mo. trailing (millions of dollars) 23,385 22,390 4.4% 2.9%
Business Outlays
Average Weekly Wage per Employee 838 885 -5.3% 1.2%
Retail Gasoline Price (dollars per gallon) 2.51 2.06 21.8% 3.1%
Econom ic Overview
Employment 449,500 445,600 0.9% 1.1%
Unemployment Rate 3.2% 2.9% 10.3% -0.6%
Initial Jobless Claims 241 431 -44.1% -8.1%
Continuing Jobless Claims 2,416 2,418 -0.1% -3.7%
Building Permits, Number of Units, 12 mo. trailing 4,180 4,853 -13.9% -2.2%
Valuation (thousands of dollars), 12 mo. trailing 786,700 808,221 -2.7% 2.2%
FHFA Purchase-Only Home Price Index 308 302 2.0% 4.5%
Total Business Bankruptcy Filings, 12 mo. trailing 63 56 12.5% 6.0%
Chapter 7, 12 mo. trailing 32 26 23.1% -1.8%
Chapter 11, 12 mo. trailing 5 4 25.0% -
Chapter 13, 12 mo. trailing 13 13 0.0% 7.6%
So urces: B ureau o f Eco no mic A nalysis, Quarterly P erso nal Inco me (SA )(Q3/19); So uth Dako ta Department o f Revenue (NSA ) (12/19); So uth
Dako ta Department o f Labo r and Regulatio n (SA ) (Q2/19); US Energy Info rmatio n A dministratio n, Weekly Retail Gaso line and Diesel P rices,
M idwest (12/30/19); B ureau o f Labo r Statistics, CES (SA ) (12/19); US Department o f Labo r, Emplo yment and Training A dministratio n (NSA )
(12/28/19); Census B ureau, New P rivately Owned Ho using Units A utho rized (NSA ) (12/19); FHFA P urchase-Only Ho me P rice Index (SA ) (Q3/19);
A dministrative Office o f the US Co urts (Q4/19). *Co mpo und A nnual Gro wth Rate.
4
National Economic Indicators
While there are some potential road bumps with the federal budget
deficit, growing federal debt, and potential inflation, the national
economy shows some slow and steady growth. Personal Income grew
by 3.6% over the prior year and the unemployment rate dropped by
10.3% over the prior year. The gap between the national and the SD
unemployment rate continues to narrow. There are new growing
concerns as we enter 2020 with the Corona Virus and how that is going
to affect the national economy. Also, we will need to continue to
watch how the presidential election will affect the growth of our
Source: US Department of Labor and SD Department of Labor economy.
Annual Percent 5 Year

NATIONAL Current Period Prior Year Change CAGR*
Wealth
Personal Income (billions of dollars) 18,723 18,078 3.6% 4.1%
Retail Sales, 12 mo. trailing (billions of dollars) 6,238.3 6,024.2 3.6% 3.7%
S&P 500 3,230.8 2,485.8 30.0% 9.4%
Business Outlays
Average Weekly Wage per Employee 1,095 1,145 -4.4% 1.1%
Consumer Price Index 258.5 252.7 2.3% 1.8%
Core Inflation (All Items Less Food & Energy) 230.5 226.3 1.9% 1.1%
Shelter 322.1 312.0 3.2% 3.3%
Retail Gasoline Price (dollars per gallon) 2.66 2.36 12.7% 2.2%
Econom ic Overview
Real Gross Domestic Output (billions of chained 2009 dollars) 19,220 18,784 2.3% 1.7%
Employment (in thousands) 152,383 150,275 1.4% 1.7%
Unemployment Rate 3.5% 3.9% -10.3% -9.0%
Initial Jobless Claims 223,000 231,000 -3.5% -4.8%
Continuing Jobless Claims 1,804,000 1,708,000 5.6% -5.7%
Building Permits, Number of Units, 12 mo. trailing 1,370,300 1,328,800 3.1% 5.4%
Valuation (millions of dollars), 12 mo. trailing 276,611 271,120 2.0% 7.3%
FHFA Home Price Index 228.1 219.7 3.8% 5.2%
Rotary Rig Count 805.0 1,083.0 -25.7% -15.0%
Total Business Bankruptcy Filings, 12 mo. trailing 22,780 22,232 2.5% -3.3%
Chapter 7, 12 mo. trailing 14,524 13,678 6.2% -4.4%
Chapter 11, 12 mo. trailing 5,814 6,078 -4.3% -0.9%
Chapter 13, 12 mo. trailing 1,711 1,874 -8.7% -5.6%
So urces: B ureau o f Eco no mic A nalysis, Quarterly P erso nal Inco me (SA )(Q3/19); US Census B ureau (NSA ) (12/19); Yaho o Finance (12/31/19);
B ureau o f Labo r Statistics, QCEW (NSA ) (Q2/19); B ureau o f Labo r Statistics, A ll Urban Co nsumers, US City A verage (SA ) (12/19); US Energy
Info rmatio n A dministratio n, Weekly Retail Gaso line and Diesel P rices (12/30/19); B ureau o f Eco no mic A nalysis (SA ) (Q4/19); B ureau o f Labo r
Statistics, CES (SA ) (12/19); US Department o f Labo r, Emplo yment and Training A dministratio n (SA ) (12/28/19); Census B ureau, New P rivately
Owned Ho using Units A utho rized (NSA ) (12/19); FHFA P urchase-Only Ho me P rice Index (SA ) (Q3/19); B aker-Hughes (12/27/19), A dministrative
Office o f the US Co urts (12/19). *Co mpo und A nnual Gro wth Rate.
The Annual Business & Economic Data Analysis Summary, produced by Northern State University
on behalf of the South Dakota Secretary of State reports on the correlations between various busi-
ness filing data and economic metrics.

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ANNUAL BUSINESS & ECONOMIC DATA ANALYSIS

PUBLISHED BY NORTHERN STATE UNIVERSITY SCHOOL OF BUSINESS

vs. prior year

Entities in Good Standing, Trademark

Limited Liability Companies make up 45%

Trademark filings increased in 2019.

Fictitious Business Name (DBA) filings

South Dakota Economic Indicators

For South Dakota, the economy remains strong. Taxable sales

Annual Percent 5 Year

National Economic Indicators

Annual Percent 5 Year

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