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South Dakota e-Labor Bulletin

March 2018

South Dakota Nonfarm Worker Trends in 2017

Please note: Unless otherwise noted, the following highlights are based on a comparison of annual average data for 2016 and 2017.

South Dakota’s total nonfarm employment increased by 2,000 workers (0.5 percent) from 2016 to 2017. The 2017 annual average number of workers was 434,400. Since 2010, average annual nonfarm employment has steadily trended upward. The total private industry had an average annual gain of 1,100 workers (0.3 percent) over the year.

The total nonfarm annual average of workers can be broken down into two groups: Goods Producing and Service Providing. Goods Producing industries (the Mining, Logging and Construction sector plus the Manufacturing sector) in South Dakota increased by 600 workers (0.9 percent) from 2016 to 2017. Service Providing industries (all other sectors) gained 1,500 workers (0.4 percent).

The Mining, Logging and Construction sector had a loss of 300 workers (1.3 percent) from 2016 to 2017. The Construction subsector makes up a large portion of this sector with Specialty Trade Contractors accounting for more than half of its workers. Historically, this subsector’s worker levels fluctuate during the year, with higher worker levels in the spring and lower worker levels in the winter. The Mining and Logging subsector had a slight increase of 100 workers over the year; however, this subsector makes up a small portion of the overall sector.

Manufacturing gained 900 workers (2.1 percent) from 2016 to 2017. The Manufacturing sector has remained consistent with its worker levels over the past five years. The manufacturing of non-durable goods is the driving force behind this sector’s growth. Non-durable goods are immediately consumed in one use or have a lifespan of less than three years. Examples of non-durable goods are cosmetics, cleaning supplies, food and fuel. South Dakota’s increase in manufacturing can be attributed to a favorable business climate and low cost of doing business.

The Wholesale Trade worker level decreased over the year by 300 workers (1.4 percent) to a 2017 annual average of 20,900 workers. The Wholesale Trade sector consists of establishments engaged in wholesaling merchandise and rendering services incidental to merchandise. The Wholesale Trade sector and Retail Trade sector have a direct relationship. Wholesalers buy goods from manufacturers, and then distribute those goods to retailers. Retail Trade showed a decrease over the year, which decreased demand for the goods Wholesale Trade distributes.

Retail Trade lost 900 workers (1.7 percent), decreasing to an annual average of 52,800 workers in 2017. Traditionally, the Retail Trade sector fluctuates during the year with highs in the months of August (start of school), November and December (holiday season). A driving force for the decrease in workers has been technology. Retailers have been adapting constantly to new technologies and market trends with some switching their focus from brick and mortar stores to more of an online presence. Some large retailers have replaced cashiers with self-checkouts. The more consumers purchase online and out of state, the less demand there will be for retail trade workers.

Transportation, Warehousing and Utilities decreased by 100 workers (0.8 percent) over the year. The Transportation, Warehousing and Utilities sector has remained consistent over the past 10 years. The slight decrease in workers can be attributed to gains in productivity due to technology.

The Information sector also lost 100 workers (1.7 percent) from 2016 to 2017. With a 2017 annual average of 5,700, the Information sector contains the smallest group of workers.

Financial Activities remained stable over the year with 29,300 workers in South Dakota. According to the Bureau of Labor Statistics (BLS), the Financial Activities sector has added 143,000 jobs nationally over the past 12 months. The Professional and Business Services sector also remained stable in South Dakota with a gain of 100 workers (0.3 percent) from 2016 to 2017. The Financial Activities and Professional and Business Services sector both have a strong presence in the Sioux Falls Metropolitan Statistical Area (MSA). Growth or decline in both sectors can be attributed to consumer expectations and economic outlook. Business activities along with the demand for financial activities increase when the economy is doing well.

Educational and Health Services had the biggest growth over the year, adding 1,700 workers (2.4 percent). Educational and Health Services went from a 2016 annual average of 70,300 workers to a 2017 annual average of 72,000. Health Care and Social Assistance accounts for majority of the workers in this sector. The worker levels in Health Care and Social Assistance have increased each year since 1990 when the annual average of workers was 32,200. The high worker demand in this industry is related to many factors, including continued population growth, an aging population and specialized procedures which require additional staff.

The Leisure and Hospitality sector increased by 100 workers (0.2 percent) to a 2017 annual average of 46,800 workers. Over the last 10 years, this sector has remained consistent with higher worker levels in July and August and lower numbers in January. Tourism is a driving force in this sector with the Accommodation and Food Service subsector accounting for majority of the workforce. Looking at past years, this sector had an average annual gain of 800 workers (1.8 percent) from 2014 to 2015 and a gain of 500 workers (1.1 percent) from 2015 to 2016. The smaller gain from 2016 to 2017 may be attributed to this sector’s larger gains during the previous years due to big events such as the 75th anniversary of the Sturgis Motorcycle Rally in 2015 and the 75th anniversary of the Mount Rushmore National Memorial in 2016. Each of these events drew large numbers of visitors to the state and increased the demand for workers in this sector. While there isn’t an exact way to track the number of tourists each event drew, indicators such as visitor spending can provide insight. According to the South Dakota Department of Tourism, visitor spending in Meade County in 2015 was $53.25 million, the largest amount in the past five years.

Other Services gained 200 workers (1.2 percent) from 2016 to 2017 to reach a 2017 annual average of 16,800 workers. Other Services include a wide variety of activities including repair and maintenance, personal and laundry services, religious, grant making, private households and other similar organizations. Historically, Other Services fluctuates throughout the year with worker levels being highest throughout the summer months.

Total Government had a growth of 800 workers (1.0 percent) over the year. Federal Government rose by 100 workers (0.9 percent) and State Government gained 200 workers (1.1 percent). Local Government had the largest gain in this sector, adding 700 workers (1.4 percent).

Rapid City Metropolitan Statistical Area (RCMSA) Nonfarm Worker Trends

The Rapid City MSA’s total nonfarm worker level rose 1,000 (1.5 percent) from 2016 to 2017. Most of the sectors either gained workers or remained unchanged over the year.

Gains occurred in Educational and Health Services (600 workers or 5.3 percent), Government (300 workers or 2.7 percent), Leisure and Hospitality (200 workers or 2.0 percent), and Professional and Business Services (100 workers or 1.9 percent).

Mining, Logging and Construction (5,000 workers), Manufacturing (2,800 workers), Wholesale Trade (2,400 workers), Transportation, Warehousing and Utilities (1,800 workers), Financial Activities (4,000 workers) and Other Services (3,400 workers) remained unchanged over the year.

There were small losses in Retail Trade (100 workers or 1.0 percent) and Information (100 workers or 11.1 percent).

Sioux Falls Metropolitan Statistical Area (SFMSA) Nonfarm Worker Trends

The Sioux Falls MSA’s total nonfarm worker level increased by 2,100 (1.4 percent) from 2016 to 2017.

Gains occurred in Educational and Health Services (900 workers or 2.9 percent), Government (500 workers or 3.6 percent), Manufacturing (400 workers or 3.0 percent), Leisure and Hospitality (300 workers or 2.0 percent), Mining, Logging and Construction (300 workers or 3.7 percent), and Professional and Business Services (200 workers or 1.4 percent).

Three sectors were unchanged over the year: Other Services (5,900), Transportation, Warehousing and Utilities (5,500 workers), and Information (2,600).

Losses occurred in Retail Trade (500 workers or 2.6 percent), Wholesale Trade (100 workers or 1.2 percent) and Financial Activities (100 workers or 0.6 percent).

Balance of State Nonfarm Worker Trends

The Balance of State is comprised of all counties not defined as part of an MSA; therefore, it includes all counties except Pennington, Meade, Custer, Lincoln, Minnehaha, McCook and Turner. The Balance of State data allows one to see how industries are doing in the more rural areas of South Dakota.

Total nonfarm employment in this area decreased by 1,100 workers (0.5 percent). Gains were listed in Manufacturing (500 workers or 1.9 percent), Educational and Health Services (200 workers or 0.7 percent), Other Services (200 workers or 2.7 percent) and Financial Activities (100 workers or 1.1 percent). Information (2,300 workers) and Government (53,600 workers) remained unchanged from 2016 to 2017.