See more of the story

WASHINGTON – Minnesota's economy grew slower than the nation as a whole in 2016, as growth rates in the Upper Midwest lagged most other regions of the country.

Data released Thursday by the U.S. Bureau of Economic Analysis (BEA) showed that the state's gross domestic product (GDP) rose 1.3 percent in 2016, while the U.S. GDP was up 1.5 percent for the same period. Minnesota enjoyed a reasonably strong fourth quarter of growth in 2016, up 1.7 percent.

While the annual growth rate was below the country, the state did boast one of the country's best growth rates for professional, scientific and technical services. GDP is the market value of goods and services produced in a state.

Russell Price, a senior economist with Ameriprise Financial, said the state's performance was solid. "The state is still creating jobs and not inflation," he said.

The diversity of the state's economy, spread across many sectors, including medical technology, retail, food processing, agriculture, insurance and financial services, has provided "stability," Price said.

Minnesota showed some growth in its health care, government, agricultural, transportation and retail sectors in 2016. The largest declines came in real estate rental and leasing, mining, and insurance.

"States that are No. 1 tend to [be] riding a wave of some kind," said state economist Laura Kalambokidis. "We tend to be in the middle of the pack because of our diverse economic base. It gives us steady growth and makes the economy more resilient in downturns."

The state ranked 23rd out of 50 states in its percentage change in GDP from 2013-2016, the BEA reported. Gains in production fell from 2.1 percent in 2013 and 2.6 percent in 2014, well ahead of the national growth rates, to just 1.3 percent in 2015 and 2016.

Price surmised that Minnesota's steep drop to 1.3 percent growth in 2015 came in part because population growth in the state slowed and fell below the country's.

While Minnesota held a middling rank for GDP growth in 2016, North Dakota saw its GDP sag under the weight of decreased oil and gas production. North Dakota's GDP decreased 6.5 percent from 2015 to 2016, more than any other state, a testimony to the volatility of an economy strongly dependent on the mining of fossil fuels.

Growth in Iowa and Wisconsin was below Minnesota's, with Iowa at 0.9 percent and Wisconsin at 1.1 percent.

The highest growth rates were in western and southeastern states. Washington state had the fastest growth at 3.7 percent, while Oregon, Utah, Georgia, Florida and New Hampshire also had growth rates of 3 percent or higher.

Jim Spencer • 202-662-7432