The Wisconsin economy shrank slightly in the third quarter as the state contended with the delta variant of COVID-19 and mounting supply chain challenges, according to data from the U.S. Bureau of Economic Analysis.
Wisconsin’s annualized real GDP dropped 0.2% from the second quarter, a decline that was driven more by sectors hit by mounting supply chain issues and less by consumers taking COVID pre-cautions.
It was also ranked 38th in the country.
Nearby states saw mixed performance. Michigan saw a 0.3% decline in its GDP, ranking just behind Wisconsin. Iowa and Indiana were slightly better, up 0.5% and 0.2% respectively, good enough to rank 34th and 36th. Illinois and Minnesota, meanwhile, performed better and grew 1.9% and 1.8%, ranking 22nd and 23rd respectively.
Wisconsin’s manufacturing sector, for example, contributed 0.33 percentage points to the decline, including 0.14 points in durable goods and 0.19 points in nondurable goods. The GDP from the state’s manufacturing sector is also already ahead of its pre-COVID level from the fourth quarter of 2019.
Since the fourth quarter of 2019, Wisconsin’s manufacturing sector has seen a compound annual growth rate of 1.5%, which ranks 28th in the country.
Retail and wholesale trade in Wisconsin contributed 0.95 and 0.54 points to the decline respectively. Wholesale trade is ahead of its pre-COVID level with a 1.1% annual growth rate since the end of 2019, but retail trade has not fully recovered and has a -2.8% growth rate since the end of 2019.
Wisconsin’s agriculture and construction sectors also contributed 1.13 and 0.59 points to the decline respectively.
Offsetting the declines were gains relative to the second quarter in transportation and warehousing, finance and insurance, professional, scientific and technical services, arts, entertainment and recreation, and accommodation and food service.
Transportation and warehousing in Wisconsin added 0.44 points in the quarter and as a sector has an annual growth rate of 0.9% since late 2019. Finance and insurance in the state contributed 0.61 points to the quarter, but is still down slightly from the end of 2019. Professional, scientific and technical services added 0.47 points to the quarter and has a 1.9% growth rate since 2019.
Two of the sectors in the state that were hit hardest during the pandemic, arts entertainment and recreation and accommodation and food service added 0.22 and 0.38 points to the quarter respectively.
However, the latest data shows just how far those sectors have to go to fully recover. Accommodation and food service in Wisconsin has a -1.8% growth rate since late 2019 and arts, entertainment and recreation has a -12.6% growth rate.
Measured in 2012 dollars, arts, entertainment and recreation in the state had an annualized real GDP of $2.47 billion in the fourth quarter of 2019, a figure that dipped to $1.17 billion in the second quarter of 2019 and has only recovered to $1.95 billion.
