Wisconsin GDP down 5% in first quarter

Economy

Wisconsin’s real gross domestic product dropped at a 5% annualized rate in the first quarter, the largest decline since the first quarter of 2009, according to data from the U.S. Bureau of Economic Analysis.

The 5% decline matches the latest estimate of the change in U.S. GDP during the first quarter, which tipped into a recession in February, according to the National Bureau of Economic Research.

It also puts Wisconsin in the middle of the pack compared to other states with the 25th best growth rate for the quarter. Nebraska had the best quarter, down 1.3%, followed by South Dakota, down 2.2%, Texas, down 2.5%, and North Dakota, down 2.6%.

Nevada and New York, both down 8.2%, and Hawaii, down 8.1%, had the worst quarters.

Wisconsin did perform slightly better than the Great Lakes region as a whole, which was down 5.7%.

Wisconsin’s manufacturing sector, which accounts for around 19% of state GDP, was the biggest drag on the state’s economy. Nondurable goods manufacturing contributed -0.54 percentage points while durable goods delivered -0.27 percentage points.

Nationally, Wisconsin saw the ninth worst quarter in the country for manufacturing measured by contribution to GDP. Indiana, with a 2.38 percentage point drag, was the worst. Six other states – Washington, Louisiana, Michigan, Kentucky, Arkansas and North Carolina – saw more than a full percentage point of decline from their manufacturing sectors.

Even before the coronavirus hit the wider U.S. economy, many manufacturers were seeing the impact of the pandemic on their supply chains in China and Europe. The Marquette-ISM Report on Manufacturing, which had been trending up in late 2019 and in January, started to decline in February.

Beyond manufacturing, Wisconsin was also hit by declines in accommodation and food service, health care and social assistance and finance and insurance. Those industries each contributed around three-quarters of a percentage point to the state’s decline.

The lone bright sports were construction, contributing 0.26 percentage points, and agriculture, forestry, fishing and hunting, contributing 0.21 points.

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Arthur Thomas
Arthur covers manufacturing for BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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